Free Credit Report

What’s my Credit Rating? Why is it important?

If you’re like most of us, you probably don’t even think about your credit rating until it’s time to apply for a credit card, mortgage or car loan. A little known fact is that people with a ‘good’ or ‘excellent’ credit rating can pay a significantly lower interest rate when they borrow money. This wonderful news can mean a savings to you of hundreds or even thousands of dollars over the life of a loan. Why do banks and credit unions give you preferred treatment when you have a good credit rating? Because you have proven to them that you are trustworthy in handling money, pay your bills on time and are responsible for paying back your loans.

What is a credit report and how can I get one?

A credit report is a list of how much credit (money in the bank, equity in your house) you have available, how much debt (unpaid credit card balance, car loan, unpaid mortgage balance) you have and a record of how well you pay your bills in a timely manner. Thanks to the newly enacted Fair and Accurate Credit Transactions (FACT) Act, you can receive one FREE credit report a year from any of the 3 major credit bureaus. You may contact Equifax at www.equifax.com or 800-685-111. You may contact Experian at www.experian.com or 888-397-3742. Or you may contact Trans Union at www.transunion.com or 800-916-8800.

What’s my FICO score?

The first step to improving your credit rating is to know what your FICO (Fair, Isaac; named for the company that created it) score is. Your FICO number tells your lender how likely you are to pay back your loan on time. Your FICO score can range from 300 to 850; the higher the score the better. Your FICO score is not listed on your free credit report but can be purchased from any of the 3 major credit bureaus listed above, for less than $10. Is knowing your FICO score worth $10? Absolutely. Or if you have recently applied for a loan, your lender may be able to tell you what your score is.

What practical difference does my FICO score really make?

Let’s suppose that you have found your dream house and go to apply for a mortgage. If you have an ‘ok’ FICO score of 620 you may qualify for an interest rate of 7.5%. Now if you have an ‘excellent’ FICO score of 775, you may qualify for a lower interest rate of 5.9%. Big deal you say? What if I told you that you could save over $3500 a year (a year!) for a 30 year fixed rate mortgage on a loan for $220,000. That’s a big deal! The average FICO score is 723. You want to aim to have yours be even higher than that and begin to save money on every loan you have.

OK, I’ve got my credit report, now what?

Go over your credit report with a fine tooth comb looking for errors and inaccuracies. You may be surprised to find credit cards listed on your report that you no longer use, inaccurately reported late payments, or credit cards listed that you’ve never even applied for. In my next lesson, we’ll discuss what to do if your FICO score is less than it could be and how to repair errors and inaccuracies to your credit report.

Beth Gabriel is a successful Webmaster and publisher of PrePaid-Legal-Help-4U.com. She provides more Identity Theft information and reviews on Credit Reports that you can read on her website from the comfort of your home at 2:00 am!

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Did you apply for a personal loan only to be turned down by a bank or lending institution? Like most people there is always a need to borrow money to buy a car or to renovate a home or even to get a student loan. There are many reasons why people need a loan and lenders turn people down from a loan application based on ones credit rating and credit score. Fortunately there is a way to resolve this situation by obtaining a credit report and checking to see if there are any inaccuracies or items that should not be in the credit report. By cleaning ones credit report it begins the process towards obtaining credit and even better interest rates on loans.

With the costs of living on the rise and the limit that one has on earnings it is easy to understand why borrowing becomes necessary for a lot of people. However, care must be taken to ensure that when money is borrowed it can be paid back to the lender.

There are times when money is borrowed and the borrower has difficulty in meeting the loan requirements and payment schedule as was outlined at the time of obtaining the loan. If there is a good reason for non-payment of loan and if this reason is brought to the attention of a lender in a timely fashion, it is very likely that the lender will be accommodating and suggest a revised payment arrangement.

The problem arises when there is default in loan payments and when the loan is not repaid as agreed upon by borrower and lender. This then gets into the credit reports and becomes part of ones credit history and it becomes a problem for future borrowings.

However, it must be noted that often times there are errors and inaccuracies in ones credit report. These credit report errors can and do affect ones credit rating and places a person as a bad or poor credit candidate. It is therefore very important that the inaccuracies be dealt with and a clean credit report be in place after all the discrepancies in the credit report have been removed.

People with a bad credit report that have a need to clean up their credit have the law on their side which allows them to request a reinvestigation of information in a credit file and dispute it as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. As per the Fair Credit Reporting Act people are entitled to a free copy of their credit report if denied credit, insurance or employment within the last 60 days. If an application for credit, insurance, or employment is denied because of information supplied by a credit bureau, the company you applied to must provide you with that credit bureau’s name, address, and telephone number.

You can dispute mistakes or outdated items in your credit report for free. Ask the credit reporting agency for a dispute form or submit your dispute in writing, along with any supporting documentation. Do not send them original documents.

Clearly identify each item in your report that you dispute, explain why you dispute the information, and request a reinvestigation. If the new investigation reveals an error, you may ask that a corrected version of the report be sent to anyone who received your report within the past six months. Job applicants can have corrected reports sent to anyone who received a report for employment purposes during the past two years.

When the reinvestigation is complete, the credit bureau must give you the written results and a free copy of your credit report if the dispute results in a change. If an item is changed or removed, the credit bureau cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness, and the credit bureau gives you a written notice that includes the name, address, and phone number of the provider.

You should tell the creditor or other information provider in writing that you dispute an item. Many providers specify an address for disputes. If the provider then reports the item to any credit bureau, it must include a notice of your dispute. In addition, if you are correct-that is, if the information is inaccurate-the information provider may not use it again.

If the reinvestigation does not resolve your dispute, have the credit bureau include your version of the dispute in your file and in future reports. Remember, there is no charge for a reinvestigation of your credit report.

Reporting Negative Credit Information

Accurate negative information generally can be reported for seven years, but there are exceptions:

Bankruptcy information can be reported for 10 years;

Information reported because of an application for a job with a salary of more than $75,000 has no time limitation;

Information reported because of an application for more than $150,000 worth of credit or life insurance has no time limitation;

Information concerning a lawsuit or a judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer; and

Default information concerning U.S. Government insured or guaranteed student loans can be reported for seven years after certain guarantor actions.

It pays to view your credit report, check your credit score and to rectify any inaccuracies, which in turn will give you better borrowing power. Visit the following website now for more Info.
http://www.zen-design.org/credit-reports.htm

Julian Pereira has researched the problems associated with poor credit and offers suggestion on obtainging a free credit report and improving credit score. You can obtain more info at http://www.zen-design.org/credit-reports.htm

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My FICO score is less than perfect - what can I do?

In my first lesson, “Free Credit Report - Why You Need One!”, we discussed why your FICO (Fair, Isaac; named for the company that created it) score is so important to your credit rating. This number indicates to your lender how trustworthy you are to re-pay your loan and directly translates into how much interest you will be charged on your next loan. FICO scores can vary from 300 to 850. It’s very credit savvy for you to pay the $10 fee to any of the 3 major credit bureaus and receive your FICO score.

After you have received your free credit report ( Free Credit Report - Why You Need One ), go over it very carefully and check for any inaccuracies.

Verify your full name, address and Social Security Number

Review your list of reported credit cards. Look for any credit cards listed that you have never applied for and any cards that you no longer use

Verify your car loan outstanding balance

Verify your mortgage loan outstanding balance

View your payment history to see if any of your creditors have inaccurately reported any late or missing payments

If you find any errors, this is the time to take action! Phone, email or write to the 3 credit bureaus mentioned in my first lesson (link listed above). After you have reported the problem, the credit bureau will open an investigation and contact your credit card company, bank or other lender. This agency will then check its records to verify the accuracy of your claim. In 30 days you will be told the outcome of your claim. This item will then either be corrected on your credit report or will stay the same if your claim is not upheld. If your claim is not upheld, you can still write a letter to the credit bureau telling your side of the story and ask to have this added to your credit report. After 2 weeks, go back and review your credit report to make sure that the changes have actually been made.

If a new credit card shows up on your credit report that you have never applied for, you may be the victim of identity theft. Contact the fraud department at one of the three credit bureaus immediately! Request a fraud alert to be placed on your credit cards. Doing this makes sure that you will be notified if anyone tries to apply for a new credit card in your name, change your address or make other changes to your current credit cards.

OK, what else can I do to improve my FICO score and clean up my credit report?

First, realize that improving your score and credit rating isn’t going to happen overnight. Bankruptcies will stay on your credit record for 10 years. Other judgments, such as liens, will stay on your record for 7 years. There’s no getting around either of those problems. But there is something important that you can do while you’re waiting for a bankruptcy or lien or be removed from your record. The number one, most important thing you can do is pay your bills on time. You may be thinking, “That’s it? No magic?” It may be hard to believe, but paying your bills on time can significantly raise your FICO score in only 3 or 4 years to qualify for a much improved interest rate on any loan you apply for. You can’t go back and make up for missed payments in the past, but you can make sure that it doesn’t happen again! More good news - your recent ‘good’ credit history carries more weight than your distant ‘blemished’ past.

Paying down your debt balance always helps to improve your score but be smart about how you pay off your credit debt. Prepaying on your installment car loan probably won’t help you much, but making headway on paying off your expensive credit card debt will help significantly. It’s a red flag to credit bureaus if your credit card debt load is approaching your maximum limit. One trick to stay far, far away from your credit card maximum limit, is to ask your credit card company to raise your limit. This trick only works if you don’t use this extra lee way to make additional purchases!

Two final simple, yet amazing tips to help improve your score.

1. If you have credit cards that you no longer use - cancel them!

2. Avoid applying for any additional credit cards. Every time you apply for a new credit card, your lender will make an ‘inquiry’ into your credit history. Too many inquiries will negatively impact your credit report. The fewer, the older credit cards you have, the better!

Beth Gabriel is a successful Webmaster and publisher of PrePaid-Legal-Help-4U.com. She provides more Identity Theft information and tips on improving your Credit Reports that you can read on her website from the comfort of your home at 2:00 am!

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