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Understanding How the Fair Credit Reporting Act Helps You

easysolu2n — Mon, 23 Jan 2012 01:54:10 +0000

The Fair Credit Reporting Act (FCRA) has been created to protect the rights of consumers. Are you aware of the stipulations of the FCRA? Understanding your privileges and limits can help you avoid bad credit or improve your personal credit. In this article, let’s take a closer look at some of these stipulations.

Free Annual Credit Report

Under the FCRA, all consumers are entitled to receive one free credit report from each credit reporting agency annually. The three major credit bureaus (Experian, Equifax, TransUnion) has set up an official website where consumers can request for their free annual credit report. You can get all your three reports at once or order one copy at a time throughout the year.

To get your free report, visit www.annualcreditreport.com or print out the Annual Credit Report Request Service form from the FTC’s website (ftc.gov/credit) and send it via post mail to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can also request through telephone by calling this toll-free number, 1-877-322-8228.

You will be asked to provide personal information such as your name, address, Social Security number, and date of birth. Hence, it is very important to make sure that you are on the official website when requesting for your free online credit report. Instead of clicking on a link, it is recommended that you manually type the URL (http://www.annualcreditreport.com) in the address bar of your browser.

Take note that annualcreditreport.com is the only website authorized by the government to distribute free consumer credit reports. You might come across other websites that offer free credit reports but these sites might be owned by unscrupulous lenders or identity thieves who are trying to victimize people.

Free Credit Reports

There are also other circumstances that entitle consumers to a free credit report. For example, if you think you have been a victim of identity theft, or if you have been denied by a creditor on account of your credit history, you can request for a free report. You can also ask for your free credit report if you are unemployed and plans to look for a job within the next 60 days.

The Right to Dispute

According to the FCRA, consumers have the right to dispute errors and unauthorized charges in their credit reports. You can also request the bureau to remove outdated information from your file particularly when they are derogatory. Examples of negative remarks that should not remain in your file for more than seven years are bankruptcy, tax liens and court judgments.

If you discovered errors in your credit report, you can send a credit dispute letter to the bureau that issued your report. In your letter, you should clearly identity the items in your file that needs to be corrected. If applicable, enclose copies of documents that support your claim.

The Right to Free or Affordable Credit Repair Service

Under the law, a legitimate credit repair agency must provide a customer with a copy of the “Consumer Credit File Rights under State and Federal Law” before signing a contract. This document stipulates your consumer rights and obligations to make sure that you will not be scammed or ripped-off by fraudulent credit repair agencies.

About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website EZCreditRepairSolutions.com. She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans. Copyright © 2010

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Get Your Free Credit Report in 2012

easysolu2n — Mon, 16 Jan 2012 06:03:18 +0000

All consumers in the US are entitled to receive one free credit report each year from each of the three credit reporting bureaus – Equifax, Experian, and TransUnion. You can request a report from one bureau at a time or get all your three credit reports at once. This is clearly stipulated in the Fair Credit Reporting Act (FCRA) and the three major bureaus must comply.

This 2012, you can start the year right by checking your free credit report. Why is it important to check your personal credit report? Checking your file will give you the opportunity to ensure that all the details are accurate and up-to-date. It is also a great precautionary measure against the threat of identity theft, as you can be immediately alerted in case someone might be using your personal information to open new accounts or commit fraud.

If you plan to apply for a loan such as a car loan or a housing loan next, checking your credit report is a crucial step. Errors in your report can badly pull down your credit score so if you notice anything that needs to be corrected, you can immediately notify the credit bureau. Fixing an error in your report can instantly boost your score. Consequently, a higher credit report score will enable you to access better loan deals and get approved more easily.

Where you can you request for your free report? The three major bureaus set up an official website for free consumer credit reports – www.annualcreditreport.com. Keep in mind that if you will order directly from a credit bureau, there is fee of $9 to $12 for each report.

To order your free online credit report, you can visit the website or call the toll-free number at 1-877-322-8228. You can also print out the Annual Credit Report Request Service form from the FTC’s website (ftc.gov/credit) and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

What information do you need to provide when your order for your free credit report? You must provide your name, address, Social Security number, and date of birth. When you request online from annualcreditreport.com, you will be able to instantly access your report. On the other hand, if you requested via telephone or post mail, you can expect to receive the copy of your free credit report within 15 days.

However, consumers must watch out against fraudulent websites that offer free credit reports as these might be operated by illegal companies or identity thieves. The personal information you provide on these websites to order your free report might be used against you to commit crime. In some cases, unscrupulous lending companies may also offer free credit reports from their website but once you sign up, you might discover that the service is not entirely free at all. You might be forced to sign up for another service that comes with a fee.

Aside from the annual credit report, you may also be eligible to request for a free report if you suspect to be a victim of ID theft, if you have been denied credit by a creditor or insurer because of your personal credit, or if you are unemployed and plans to seek a job within the next 60 days.

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How to Rebuild Your Personal Credit for Free

easysolu2n — Mon, 09 Jan 2012 05:46:42 +0000

Is it possible to rebuild your own credit? If you have a poor credit score or bad credit history, what can you do to repair it? The good news is that there are steps you can by yourself to improve bad credit. However, it’s important to remember that repairing bad credit takes time. Complete credit rehabilitation cannot be done overnight.

How long will it take for you to get out of bad credit? The length of time it will take to repair bad credit depends on the situation. Needless to say, if you currently have a credit score way below average, you might need a little more time to work for improvement. It can take anywhere from six months to a year or a few years to achieve an excellent status, depending on the steps you take to improve your credit.

The earlier you start rebuilding bad credit, the sooner you can regain good credit as well. So, don’t feel disheartened if your current credit is not perfect. Check out these tips on how you can repair your personal credit for free.

Evaluate your credit report. All consumers are entitled to receive one free credit report each year from the three major credit bureaus (Experian, Equifax, TransUnion). You can request for your free report at www.annualcreditreport.com. It’s a good idea to get your annual free report at the start of 2012, especially if you need to repair your personal credit.

Clean up errors. By checking your credit report, you will be able to see whether all the information and charges in your report are correct. Take note that errors can badly pull down your credit score. You can instantly improve your score by a few significant points by correcting these errors.

Send a credit dispute letter to the bureau that issued your report via registered post mail. In your letter, point out the exact items in your report that needs to be correct. You should also enclose photocopies of documents that support your claim and a photocopy of the report with the errors clearly marked.

This process can take up to 30 days. From the date of receipt of your letter, the bureau will conduct an investigation and if your dispute is valid, the necessary corrections will be applied and the bureau will send you an updated copy of your report.

Speak with your creditors. Some people think that they always need the help of a debt consolidation company to negotiate their debts. However, you can personally speak with your creditor to negotiate a new repayment term that will work for you.

Before approaching a creditor, carefully assess your situation and create a repayment plan. Explain to your creditor the reason why you are struggling with repayment and request if your current repayment terms can be modified. You can even ask a creditor to lower your interest rate or waive the penalty fees to make it easier for you to catch up with repayment. Most creditors are willing to modify their terms if they can see your willingness to stand by your obligations.

Seek free counseling. You can acquire professional advice from a non-profit credit counseling organization accredited by the government. Check out the NFCC’s (National Foundation for Credit Counseling) website for a list of agencies that offer free credit counseling service.

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Consumer Credit Repair Tips for 2012

easysolu2n — Tue, 03 Jan 2012 01:56:40 +0000

Come 2012, many people will still need to repair their personal credit and dig themselves out of debt. If you find yourself in the same situation, don’t feel disheartened. You make an effort to repair bad credit and most of the steps that you can do are not complicated at all. Consider these tips:

1. Check your report. The first step is to check your personal credit report. Order copies of your annual credit report from the three major credit bureaus so you can evaluate the status of all your accounts. All consumers are entitled to receive one free report each year from www.annualcreditreport.com.

Are all the charges in your credit report correct? If you find errors or incorrect charges, you should send a credit dispute letter to the bureau that issued your report. Cleaning up errors from your credit report can take up to 30 days since the bureau will conduct its own investigation. If your dispute is valid, the errors will be corrected and the bureau will send an updated copy of your report for free. This step alone can boost your current low credit score by a few points.

2. Pay your creditors on time. Start the year right by paying all your monthly dues on time. If you seriously want to improve bad credit, you cannot afford to miss a single due date. What if you are confronted with an exceptionally large amount of debt?

If paying off all your debts at once is not possible, you must prioritize your debts and focus on paying off balances on one account at a time. Which of your account has the highest rate of interest? By paying off this account first, you can prevent your debts from quickly accumulating.

3. Negotiate your debts. You should also try to negotiate or speak with each of your creditors. Explain to a creditor your present financial situation. Some people might feel embarrassed to admit that they are experiencing financial crisis.

However, if creditors can see that you are willing to stand by your obligations despite the circumstances, they will be most likely to show consideration. Many creditors have made changes to their terms and conditions to help a borrower get out of debt.

4. Create a suitable repayment plan. It’s important to have a repayment strategy that is suitable to your situation. Sum up your total debts and compare it with your monthly income. On 2012, your primary task is debt repayment so you need to work out a budget that will help you achieve that goal more easily.

If you’re stuck in bad debt, the situation may demand that you make major changes with your spending habits and lifestyle, so be prepared. Keep in mind that despite the hardships that you may encounter, you will be able to enjoy a stress-free life once you free yourself from bad debt.

5. Seek professional counseling. It will also help if you can get advice from the experts. You can check out the NFCC (national Foundation for Credit Counseling) and the US Department of Justice’s (http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm) website for a list of approved credit counseling agencies and non-profit credit counseling organizations in your region.

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Understanding Bankruptcy and How to Avoid It

easysolu2n — Tue, 27 Dec 2011 01:04:31 +0000

When confronted with a serious debt problem and financial crisis, a person or a business owner may consider filing for bankruptcy. This option gives a debtor the chance to be discharged from all debts through Chapter 7 Bankruptcy.

However, not everyone who files for bankruptcy can qualify for a Chapter 7 Bankruptcy. If the bankruptcy court finds that the debtor is capable of repayment, he/she will be subjected to a five-year repayment plan where a percentage of the monthly salary will be automatically paid to creditors. This is known as Chapter 13 Bankruptcy.

Chapter 7 and Chapter 13 are just the two basic types of bankruptcies but there are other forms as well. It’s important to understand that not all debts can be discharged through bankruptcy. Examples of these debts include alimony, most student loans, and tax liens. It is the bankruptcy court that decides which type of bankruptcy is best appropriate for the applicant’s financial situation.

Under the new bankruptcy law, an applicant must go through the “median income means” test in order to determine if he/she is eligible for a Chapter 7 bankruptcy. If your monthly income shows that you are capable for debt repayment, after all necessary expenses have been deducted, you will be subjected to a Chapter 13 Bankruptcy.

How to Avoid Bankruptcy

Filing for bankruptcy can sometimes be the only practical solution to debt problem. However, in many instances, you can take other solutions to recover from debt and bad credit. Keep in mind that a record of bankruptcy will remain in your personal credit reports for seven years. Once your debts have been discharged through bankruptcy, all past credit history you built will be erased.

The consequences of having a bankruptcy record in your credit history can be serious. It can be more difficult to get approved for new credit since creditors may regard you as a high risk customer. This is why borrowers need to carefully consider the matter, before deciding whether filing for bankruptcy is suitable.

Of course, the best way to avoid bankruptcy is to avoid bad debt. As the popular adage goes, an ounce of prevention is better than a pound of cure. If you own a credit card or credit cards, you should be aware of the risks if you fail to manage your spending. It is crucial to pay off your debts on time to avoid build-up.

If you can keep your debts as minimal as possible, you can greatly minimize the risk of bad debt and bankruptcy. Be aware of your duties and responsibilities as a borrower. Once you acquired credit, you should comply by the terms and conditions of your lender.

Indeed, effective money management is the key to avoid bankruptcy. Live within your means and recognize the value of hard-earned money. Before acquiring a loan or a credit card, weigh the pros and cons before you make a decision. And if you really need to obtain a loan or a new credit card, shop around first to find the best deal.

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How to Manage Credit Card Debt

easysolu2n — Mon, 19 Dec 2011 01:45:29 +0000

Do you own a credit card? If yes, this article present tips on how to manage credit card debt more effectively. Considering these suggestions can help you get the most out of your credit card and avoid the risk of bad credit.

Pay off your balance. There really is no good reason to carry a balance in your account. Carrying a balance from month to month will not help you get a better credit score. On the contrary, the risk of debt build-up is increased each time you leave your charges unpaid. The best way to use a credit card is to pay the monthly balance in full so you can completely avoid interest rate charges.

Pay more than the monthly minimum. Credit cardholders can pay only the monthly minimum required by their issuer. However, charges can quickly accumulate if you choose to leave them unpaid. If you cannot pay your full balance, you should pay off as much as you can from your charges.

Do not max out your credit limit. Be careful not to use your credit limit to the full. This can be avoided by checking your balance first before going out to shop with your credit card and by planning your purchases in advance.

Even if your credit card offers a low rate, you should still keep your charges minimal. Why is this important? 30% of your credit score is based on credit utilization. If you have a high credit-to-debt ratio, your credit score can badly drop. According to financial experts, cardholders should avoid using more than 30% of their available limit.

Simplify your life.If you have been used to extravagant spending, confident that you can always count on your credit cards, perhaps it’s about time to take an objective look on your financial situation. Are you able to pay your credit card balances in full and on time? Or are you struggling to keep up with repayment? If you’re having a hard time catching up with your debts, perhaps you need to make some adjustments or charges.

Review the fine print. If you are still in searching for a credit card, take the time to read the fine print. The only way you can compare credit cards accurately is to understand the complete Terms and Conditions. Even if you’ve had your credit card for years, you should still review the Terms and Conditions from time to time.

There might have been some changes on the terms or the interest rate might have increased, and the only way you can be alerted is if you read notices sent by your issuer. According the new Credit CARD Law, credit card companies should give their customers a 45-day advanced noticed before implementing changes.

Don’t get more cards than you can handle. It can be tempting sometimes to sign up for a new credit card even if you already have one. However, it’s best to stick with just one or two credit cards since managing multiple accounts can prove to be difficult. Don’t apply for a new credit card unless you really need to.

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How Credit Repair Helps You

easysolu2n — Mon, 12 Dec 2011 01:42:16 +0000

When your personal credit is not in perfect shape, it can be a bit disappointing. However, instead of being disheartened, you should be motivated even more to take positive action. Why should you be interested in repairing your personal credit history and credit score?

Good credit can be a great advantage when it comes to matters of finances. If you have good credit, more doors of opportunities will be opened to you. On the other hand, if you have bad credit, your options to finding a good deal can be limited.

It is no secret that bankers and creditors prefer customers with impressive credit over customers who are credit challenged. If you have a low score, a creditor may consider you as a high risk borrower, and might even refuse to grant approval. Many lending companies and financial organizations have strict credit standards and if you’re looking for a great deal, you should only work with the best lenders in the market.

Aside from getting your credit application quickly approved, having good credit strengthens your negotiating power. A potential lender is more likely to give a lower interest rate or give you a flexible repayment term if you are regarded as a credit worthy borrower.

Do you have bad credit? If so, then it’s about time to do something about it. You’ll be glad to know that there are positive steps you can do to get yourself out of bad credit. Consider these practical credit repair suggestions:

Check your personal report. You can obtain a free copy of your annual credit report, issued by the three major credit bureaus from www.annualcreditreport.com. Consumers are entitled to a free report annually so if you have not yet receive your free report this year, then you should definitely take advantage of this privilege.

Credit report errors can be fixed. You should know that errors in your credit report can be corrected if you will send a credit dispute letter to the bureau that issued your report. Furthermore, outdated information such a record of bankruptcy or foreclosure older than seven years should be erased from your report. By getting these errors fixed, you can make a big improvement with your current credit rating.

Pay all your bills on time. Be sure to submit all your payments on time as even one late payment can pull down your score even more. Do you have past due debts? If yes, do your best to pay them off quickly. If you’re having trouble paying off your debts at once, consider the next credit repair step.

Negotiate your debts. You should not hesitate speaking with your creditor about your debts. Instead ignoring the bills and letting your debt pile up due to the monthly interest rate charges and late fees, you should work out a new repayment arrangement with your creditor. Most creditors would be glad to modify their terms especially if the borrower is experiencing financial crisis due to circumstances beyond his/her control.

Seek professional credit repair help. Finally, you may also consider getting advice from a trusted credit counseling agency nearest to you. Check out the NFCC (National Foundation for Credit Counseling) for a list of credit repair agencies that offer services for free or at a small charge.

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How to Check Your Credit Report

easysolu2n — Mon, 05 Dec 2011 01:44:16 +0000

If you have not already done so, you will need to get your hands on a credit score. This is the magic number that lenders and others judge you by. Once you know the number, you take a big step toward managing your credit. As you go looking for credit scores, you’ll be inundated with offers. Go to any search engine and type in the words “credit score.” Every one of the listed results will have your phrase prominently displayed and bolded.

Any time you get a loan, ask your lender for your credit score. Since they just pulled your credit reports, they will have an up-to-date credit score for you. If you don’t like what you see, dig deeper. Order your credit reports and see what may be affecting your scores.

You need to be careful out there because you’re working with some very sensitive information. If you give your sensitive personal information to the wrong party, you risk becoming a victim of identity theft. Stick with the big names, or ask your lender which credit score they use when evaluating a borrower.

Your FICO credit score

The granddaddy of all credit scores is the FICO score. The Fair Isaac Corporation pioneered credit scoring, and is deeply entrenched as a market leader. For most mortgage loans, lenders will look at your FICO credit score. This is because selling mortgages in the secondary market has traditionally been easier if the borrower had a good credit score. The use of the FICO score for automated underwriting is beginning to shift, but the FICO credit score is still by far the dominant scoring model.

Because of its dominance, you might consider buying your credit report score directly from the Fair Isaac Corporation. That way, you will be sure to get a FICO credit score, not an imitation. You can purchase your FICO credit scores directly from Fair Isaac at their consumer web site, www.myfico.com. If you only need one credit score (because you know which credit-reporting company your lender will use) then you can buy a single score from a single bureau. If you want a FICO credit score from all three of the credit-reporting companies, you can buy those as part of a complete package.

While the FICO credit score is a strong market leader, the VantageScore may catch up. VantageScore is the scoring model created by the three major credit-reporting companies: TransUnion, Equifax, and Experian. To purchase your VantageScore, you can visit one of the credit-reporting companies’ Web sites, or you can do so at www.vantagescore.com.

Buying Other Scores

You can buy other scores, but you may not want to. There are a million different vendors out there selling credit scores of questionable value. There is so much confusion about credit and credit scores that these companies get away with selling consumers a score that a lender will never use. The major credit-reporting companies are guilty of this. However, they also sell FICO credit scores, so you have to be careful when buying from them. You might get a proprietary score, or you might get the genuine article. Read the fine print to make sure you get what you want. Other scores typically score you a little higher than your FICO credit score would be, giving you a false sense of security.

Monitoring Services

You can also buy credit scores in conjunction with credit-monitoring services. Typically, these services might hold themselves out to be identity-theft protection services. As an added bonus, they say that they will throw in a credit score. Unfortunately, these credit scores are rarely FICO credit scores. They might move up and down similar to the way the FICO credit score will move, but they’re not exactly the same.

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Understanding How Credit Scoring Works

easysolu2n — Mon, 28 Nov 2011 01:48:56 +0000

Do you know how the credit scoring system works? Many consumers may be familiar with a credit report and credit score, but some may not fully understand the whole process behind the credit scoring system. In this article, let’s talk about basic facts about credit reporting. Understanding how credit scoring works will help you avoid bad debt and keep your personal credit in good standing.

What is a credit score?

The credit score is numerical value used by credit reporting agencies to define an individual’s credit worthiness. Banks, lending companies, and creditors check credit report scores to determine whether a person can be granted approval. Some lenders may require a high credit score while others can be less exacting when it comes to gauging credit scores.

There are three major credit reporting agencies that monitor account activities of consumers. These are Equifax, Experian and TransUnion. Each credit bureau does its own independent reporting and uses its own credit scoring model.

Equifax uses the FICO scoring system, created by the Fair Isaac Corporation. The other two bureaus Experian and Trans Union created their own model which is based on the FICO scoring system. The FICO score ranges from a low of 300 to a high score of 850.

Calculations are made based on five basic factors: payment history (35%), credit utilization (30%), length of credit history (15%), types of credit (10%), and credit inquiries (10%). Based on these criteria, it is easy to see why timely payment of your bills can dramatically affect your personal credit rating. At 35%, even a few misses on your due dates can badly pull down your credit score.

Another significant factor is how you utilize your credit limit. Credit utilization makes up 30% of your total FICO score so if you have a high debt-to-credit ration, your score can really drop. This is why financial experts recommend not using more than 40% of your credit card’s limit, even if a credit card offers zero APR or a low interest rate. If you get into the habit of maxing out your limit, your credit score can suffer.

The other three factors are just as important. Length of credit history makes up 15% which is why students are encouraged to apply for their own student credit card as soon as they are ready to handle debt and repayment.

What about the types of credit you use? This makes up 10% of your FICO score. For instance, owning multiple credit card accounts will not boost your score. You can show your capability to handle debt and credit effectively by managing different types of debts such as a personal loans, mortgage, auto loans, aside from a credit card.

Finally, credit inquiries or hard inquiries made by creditors in response to your credit application can affect your credit score. This is why consumers are strongly advised not to submit multiple applications to various lenders at once just to see who will grant approval more quickly. Instead, you should take time evaluating your options and once you have found the right creditor, then that’s the only time you can submit an application.

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What You Can Do to Boost Your Credit Score

easysolu2n — Mon, 21 Nov 2011 01:27:37 +0000

Are you concerned about your personal credit score? Would you like to boost your credit? If yes, consider the following credit repair tips:

Check your report. The first important step is to get a copy of your personal credit report from each of three major bureaus (Equifax, Experian, TransUnion). If you have not yet received your free report for this year, you can request for it by visiting www.annualcreditreport.com. All consumers are entitled to one free annual credit report so be sure to take advantage of this privilege.

Fix errors. There might be differences with each report so make sure that all your three reports contain accurate information. By fixing errors in your credit reports, you can make a significant improvement in your current rating. What kinds of errors can be fixed? Unauthorized charges, charges that have been paid, outdated information such as a record of bankruptcy or foreclosure older than seven years, and inaccuracies with your personal details (spelling of your name, a missing digit in your SSN, etc).

If you find any error in your report, you should immediately send a credit dispute letter to the bureau that issued your report. Upon receiving your letter, the bureau will conduct an investigation which can last up to 30 days. If your dispute is valid, the necessary corrections will be made on your credit file. The bureau will also notify the two other credit reporting agencies about the updates and send you an updated copy of your report for free.

Pay off your debts. If you have unpaid debts in your name, the only way you can repair bad credit is for you to pay your creditors. Remember that you are personally responsible for the repayment of your debts and no credit counselor or credit repair agency can magically erase the charges in your report.

Negotiate with your creditors. What if you can’t pay off all your debts at once? If this is not possible, you should speak with each creditor and try to work out a new repayment plan that is suited to your current financial situation. Don’t be afraid to admit that you are experiencing crisis. Trying to hide the truth will not be helpful. Instead, you need to be honest and request your creditor to make adjustments in your repayment terms.

Some people might be hesitant to try this step. But many creditors would gladly modify their terms to help a borrower who is experiencing financial problems rather than wait for them to file for bankruptcy. If you’re having second thoughts or if you’re not sure how to negotiate properly, you can ask advice from a trusted credit counseling agency.

Don’t be scammed. People who are in deep financial trouble can be an easy prey to scammers and fraudulent agencies that offer “instant debt relief”. If an agency promises to get you out of debt in an instant without any effort on your part, you are most likely dealing with a fraud. You can check out the NFCC or National Foundation for Credit Counseling’s website for a list of accredited agencies that offer low-cost or free counseling.

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