Your Credit Report, is it really yours? Obtaining a free copy, and SCORING |
| 1. Your FICO score is a product of "Fair Isaac" and is sold to the 3 credit reporting agencies using the data provided by the particular agency making the request. Since the 3 credit bureaus seldom match this provides the differences in the credit score which uses the same paradigm in each case but only applied to a different set of data. Rather than paying an outside agency for the credit score, the three credit bureaus have formulated their own credit score based on a different paradigm. The new credit score is called "VantageScore" additional information can be found on the following BankRate.com article. As more information becomes available I will report the information here. In discussing this new credit score with a loan officer the VantageScore is currently NOT (Sept. 09) being used to determine a person credit worthiness to obtain a home loan. 2. When and if the Vantage Score is used, Wikipedia list the 6 parameters along with the weight each one gives to the combined score. |
| The ONLY website providing a FREE credit report (NO STRINGS ATTACHED) is: AnnualCreditReport.com Select your state and click "request report" period. You will be able to access one report (log on again for more). Under the federal law's provision, official, free access to your credit report is available through a single website, AnnualCreditReport.com; by phone, via (877) 322-8228; by mail (Annual Credit Report Service, P.O.Box 105281, Atlanta, GA 30348-5281); or by filling by mail using the official "Annual Credit Report Request Form" You can obtain one free report every 12 months. Since there are 3 credit reporting bureaus, you could request one ever 4 months or request all three the 1st of the year and include them with the paper work you will be obtaining for preparation of your Federal Income Taxes. |
| If you use FreeCreditReport.com, FreeCreditReportSource.com, NationalCreditReport.com, FreeCreditReportsInstantly.com, Free3BureauCreditReport.com, CreditReport.com, FreebieCreditReport.com, or a myriad of other similarly named websites, your probably will end up paying for reports, scores, or services which you may not have originally desired. Even on "AnnualCreditReport.com" you will be given additional opportunities to depart from your money making this anything but a free process. |
Along with your personal identification information -- Social Security number, birth date, name, recent addresses and employers, etc. - your credit report is a sort of fiscal fitness report on your credit habits. It names your credit accounts, identifies them by type and tracks balances, credit limits, payments, available credit, open-or-closed status and other information that reveals how well or how poorly you pay each account. The report also documents credit requests and notices of liens, judgments and other "derogatory" remarks, along with remarks from the consumer, and other information. It does not belong to you and information is provided to the reporting agency by the members who belong to the individual credit bureau. |
| Under federal law, you’re entitled to a free report if a company takes adverse action against you such as denying your application for credit, insurance, or employment and you ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft. Otherwise, a consumer reporting company may charge you up to $9.50 for another copy of your report within a 12-month period. |
From the FCRA (Federal Credit Reporting Act) if you find an error, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take full advantage of your rights under this law, contact the consumer reporting company and the information provider. 1. Tell the consumer reporting company, in writing, what information you think is inaccurate.Consumer reporting companies must investigate the items in question – usually within 30 days – unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the consumer reporting company, it must investigate, review the relevant information, and report the results back to the consumer reporting company. If the information provider finds the disputed information is inaccurate, it must notify all three nationwide consumer reporting companies so they can correct the information in your file. When the investigation is complete, the consumer reporting company must give you the written results and a free copy of your report if the dispute results in a change. (This free report does not count as your annual free report under the FACT Act.) If an item is changed or deleted, the consumer reporting company cannot put the disputed information back in your file unless the information provider verifies that it is accurate and complete. The consumer reporting company also must send you written notice that includes the name, address, and phone number of the information provide 2. Tell the creditor or other information provider in writing that you dispute an item. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if you are correct – that is, if the information is found to be inaccurate – the information provider may not report it again. |
What factors affect your credit score?Previous Credit Performance (Payment History) about 35% Have you paid your credit accounts on time? Late payments, bankruptcies and other negative items can hurt your score. Current Level of Indebtedness (Amount Owed) about 30% Total amount you owe on all your accounts, the number of accounts with balances, and how much of your available credit you are using. The more you owe compared to your credit limit, the lower the score. Amount of Time Credit Has Been In Use (Length of Credit) about 15% Generally speaking, the longer the credit history the better your score. Responsible credit management will also be used to increase the score. Pursuit of New Credit about 10% Each time someone runs a credit check on you, it creates an inquiry and these eventually work as a lowering factor on your credit rating Types of Credit Experience about 10% A healthy mix of different types of credit, installment loans, retail accounts, credit cards, and mortgage. Your Credit Scores provides a brief but complete overview of credit scoring, including factors that influence credit scores, where you can obtain your scores and tips on improving them. Understanding Your FICO Score is a pdf booklet (20 pages) which provides a thorough description of credit scoring, including ways credit scoring can help you, the relationship between your credit report and your credit score, what a FICO® score considers, and interpreting your score. |
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While researching information for this page, an article written by David Czach was discovered and is being included in it's entirety. DISCLAIMER: since I have not used any of David's techniques I do not recommend nor support his views and am providing this information for your investigation and further consideration. David's article was found on Ezine Articles (finance/credit) where other articles can be located. 10 Ways To Boost Your Credit Score This is the absolute fastest way to correct errors on your credit report and raise your credit score. However, it can only be done through a mortgage company or a bank. If you apply for a home loan and find errors on your credit report, request the loan officer to conduct a Rapid Rescore. But don't mistake it for the credit clinic tactic of multiple dispute letters. The Rapid Rescore strategy requires proper paperwork. You need proof that the item is incorrect. It must come from the creditor directly. For example, a letter stating the account is not your account, a letter stating the account was paid satisfactorily, a release of lien, a satisfaction of judgment, a bankruptcy discharge, a letter for deletion of collection account or any relevant evidence. This is the same documentation a bank or mortgage company would require for the credit accounts anyways. The difference is, now you can improve your credit score and receive a lower interest rate. The results are not guaranteed and will run you about $50 per account. 2. Deleting Negative Credit This is the infamous area where you've heard of all the scams. Credit repair clinics charge "an arm and a leg" and promise a clean credit report. Sometimes even a new credit profile! People spending hundreds, or even thousands, of dollars for something they can do themselves. Removing errors is simple. Deleting negative credit that is accurate requires advanced methods. But that is not the scope of this report. So I'll focus on the deleting the negative errors. Credit report errors easily disappear by using a simple dispute letter. If you have the paperwork proving the error as mentioned above in Rapid Rescore, send copies of that along with the dispute letter. This will make the credit bureau's job easier and you will get faster results. If you don't have the documentation to prove the error(s), send the dispute letter anyway. According to federal law, the credit bureau's have a "reasonable time" to validate your claim. They will contact the creditor for verification of your dispute. Then the account will be reported accurately - or deleted. It has been generally accepted the "reasonable time" to complete this task is 30 days. If you're not the do-it-yourself kind of person. Or don't have the time. You could hire someone who is very economical. 3. PiggyBack Someone's Credit This is a fast and great little credit score booster. But it requires a very trusting relationship. Simply put, someone else adds you to their credit account. For example, when applying for a credit card, you may have seen the section to add a card holder. If your trusting person adds you, their payment history is now reported on your credit report too. If they have perfect credit, now you have a perfect account. To make this more effective, use an aged account. Imagine if your trusted person has a 10 year old credit card account with a perfect payment history and a balance of only 50% of the credit limit. Wouldn't you love to have this on your credit report? The easy part is your trusted person just calls the credit card company and requests a form to add a card holder. Once completed and activated, their entire account history and future is now firmly planted on your account. Imagine if you secured 3-5 of these accounts - especially installment accounts. Your credit score could sky-rocket! The challenging part? Finding the trusted person. Since you already have a low credit score and bad credit, how eager will someone be to make you a card holder? Even your parents don't want you to damage their credit. But, no one says you need to possess the card! In other words, your trusted person could add you as a card holder and never give you the card or PIN or any information. Since the bills and all account information is still mailed to the trusted person's address, you won't know anything about the account. This scenario could land you many trusted persons. And you still benefit with a higher credit score. 4. Playing Round Robin This strategy is one of the oldest credit building techniques around. It used to be accomplished with secured savings accounts. But now, it's much easier with secured credit cards. In fact, I've used this method myself. Here's how it works: Take ,000 (or what you can afford) and get a secured credit card. Once received, get a cash advance of 70% of your credit limit. Get a second secured credit card. Once received, get a cash advance of 70% of your credit limit. Get a third secured credit card. Once received, get a cash advance of 70% of your credit limit. Open a new checking account with the final cash advance. Use this account only for making payments on your three new credit cards. If you make your payments on time every month, your credit score will increase because you now have three new perfect payment credit cards. (Initially, your credit score might drop a few points due to the rapid, multiple accounts being opened. However, be patient because within 4 months of no new accounts or any delinquencies of any account, you will see your credit score increase. Mine increased 60 points in 60 days!!) 5. Pay on Time This one is quite obvious. But after 12.5 years in the mortgage business, I discovered it still needs repeating. Your creditors were gracious enough to loan you money. Now pay your damn bills! If you don't, your credit score decreases. EVEN IF ONLY 30 DAYS LATE! That's right folks. For some reason people think, "I'm only a few weeks late. What's the big deal?" Well, for the loan company, if you pay late but consistent, they make a lot more money with late fees and more interest (if a simple interest loan). For you, your credit score is damaged. If you think long-term and credit score, I'm certain you would not have a cavalier attitude. 6. Pay Down Debts This seems like an obvious method, doesn't it? But it is not as transparent as you might think. Remember, we're playing with high-level statistics and probabilities which evaluates and forecasts trends in your behavior. Here's what you do... Never pay off your revolving debt in it's entirety! Isn't that a surprise? Think about it. Your credit score is a reflection of your ability to manage your credit. Paying off your debt is not managing your debt. If you have a zero balance, how can you manage it? You don't. It no longer exists. And you cannot manage what does not exist, right? Therefore, in terms of credit score, you have demonstrated your ability to swiftly pay off accounts to avoid managing them. Thus, slightly decreasing your credit score. One exception, of course, is if you're over extended to begin with. Pay off what's necessary to make your credit profile look great. Then manage the remaining credit. 7. Don't Close Accounts Even if you pay off revolving debts, do not close the account. The longer an account is open with no negative reports, the better it reflects in your overall credit score. This is due to the weighted-average in the credit score formula. Many credit experts suggest a balance of 30% of your credit limit. That's ideal. But you can go as high as 70% and still maintain a healthy credit score. 8. No New Credit You must be vigilant in your credit behavior if you want the best credit score. Therefore, do not get any new credit unless it is absolutely necessary. Each time you apply for credit, an inquiry is added to your report. This usually drops your credit score slightly. When you have fresh credit, there is no track record how you will manage (or pay) this account. Therefore, it's a higher risk which results in a minor drop in your credit score. Remember, your credit score is about risk assessment. Here's what you do: obtain credit for your housing, transportation, college or continued education and 3-5 credit cards. That's really all you need for personal credit. If you want more credit, request a credit limit increase on your current cards rather than apply for new ones. 9. Maintain A Mix of Credit Types If you show you can handle different types of credit at the same time, you are rewarded with a great credit score. In other words, get installment loans like vehicle, personal loan or mortgage. Get revolving credit like credit cards: Visa, Master card, Sears, Sunoco Gas, Costco. By mixing it up, you demonstrate you can manage your credit because you will have short term and long term credit with a fixed payment. As well as a "variable" monthly payment on your credit cards. Keep these accounts open with a balance of 70% or less and paid on time and you will witness your credit score climb to great heights. 10. Don't File Bankruptcy or Foreclosure Here's the most obvious advice: Don't file for bankruptcy or foreclosure. These stay on your credit report for 10 years and always decrease your credit score. The older the bankruptcy or foreclosure account becomes, coupled with re-built credit history, the less of an impact they play on your credit score. Contrary to popular beliefs, you can legally delete a bankruptcy and foreclosure. It's not easy. But it's possible. See the advanced methods for that solution. To quickly rebuild your credit history after a bankruptcy or foreclosure, use the Round Robin strategy above and get secured credit cards. Now you can even get a car loan or mortgage right after bankruptcy. © 2004 David Czach. David's article may be reprinted without compensation provided there are no changes whatsoever to the article, the copyright notice and the complete Editor's Note. Any reprinting or duplication without these conditions is copyright infringement. |