Is Your Credit Score Different Depending On Which Company You’re Using? You’re Not Alone.
By Mike Wayman
Have you ever had a look at your credit report before applying for a loan only to find that when your credit is checked that the score is different? This is not unusual and yet it can be a major surprise for people when it happens. How is it possible to get two different credit reports for the same person?
The three major credit bureaus, Equifax, Experian, and TransUnion, all are private companies traded on the New York Stock Exchange. They are not government agencies, they are businesses in the business of making money, just like any other business. What does this mean for a consumer? It means that these credit bureaus are given permission by you to access your credit information any time you apply for a loan..it also means that when they make their report they can report anything, regardless of whether or not the information is up to date.
So why is the information not up to date with all the parties using credit bureaus? Creditors don’t always submit to all the credit bureaus. Updates to your account are sent to all the bureaus, but often not at the same time, so one may be more up to date than another. Balances can vary as a result of this time variable. Also, credit amounts can vary and even be incorrect from the different bureaus. Be aware and update yourself to insure your credit is up to date.
What You May Not Know About Your Credit
By Mike Wayman
Many people do not understand how their credit score works or how it affects their ability to borrow money, finance large purchases, even obtain auto insurance.
For instance, having no credit at all is not better than having bad credit. It is recommended that even if an individual has no need for a credit card or charge account that they obtain one and use it occasionally. This establishes a pattern of purchasing and repaying on credit without late payments or over-charges. This practice actually improves your credit score, even if you had the cash in your pocket to cover the purchase you made with a charge card. Likewise, it is best to keep an account open, even if you choose to use it infrequently. If a charge account incurs a high annual fee, you must decide if it is worth the cost of maintaining the account.
It is also a myth that only people who have your express permission can view your credit report. Actually, anyone who knows your social security number can access your credit report, including potential employers. Frequent inquiries into your credit report, such as when shopping for lenders for a home or auto loan, also do not hurt your credit score as some mistakenly believe, nor does employing the services of a credit-counseling agency to help manage and pay off existing debt. Knowing these things can help you to manage your credit wisely and succeed in maintaining financial stability.
What You Need To Get A Home Loan In This Economy
Obtaining a home loan in the current economy can be a challenge. Lenders are in a financial squeeze and they are watching for the best prospects when handing out dollars. There are a few things you can do to help yourself to obtain a home loan.
First, examine your budget and realistically decide what sort of loan you can afford to repay. Do not overestimate your income or count on income that is sometimes there, sometimes not. Determine what you can afford and leave a little padding surprise expenses. Then, get a copy of your credit report so you know where your credit score stands. If there are problems, repair whatever you can and bear in mind that anything that cannot be repaired may be able to be explained to a lender. Some lenders are quite forgiving when late payments are due to outstanding medical bills that are in the process of being resolved, or even of bankruptcies that occurred several years in the past if your current financial track record is more stable.
As you proceed, research exactly what type of loan you need, what actual amount you should apply for, and the various types of lenders with whom you could pursue the loan. Explore all of your options before throwing all of your eggs in one basket and then go forward only when you are comfortable with the process. Ask questions when you need to, and make sure you understand the proceedings every step of the way.
Check Your Partners Report Before You Say “I Do”
By Mike Wayman
Marriage. It is full of happiness and bliss – what’s mine is yours, what’s yours is mine. From the moment you say, “I do” you exit the world of two separate beings and enter the world of unity and one. Everything is combined. Maybe you saw that movie recently, “What Happens in Vegas,” where a fluke wedding and $50 million in gambling winnings created problems in divorce court. Needless to say, when you are married everything from the $50 million you win gambling to the $50,000 you are in debt is joined.
For this reason, many people today are exchanging credit reports with their partners before saying, “I do.” It may not seem very romantic, however it makes sense financially. When you are single, your credit report is private. The second you get married your report is linked to your spouse’s.
When you are married you will need to rely on both you and your spouse’s credit to apply for loans for a home and cars. Usually the credit company will consider the two histories together and use them to determine whether or not you are approved. Therefore, if your future spouse has a credit problem, you might want to know about it now, before it is too late.
How To Correct An Error On Your Credit Report
By Mike Wayman
Your credit score is a vital number in today’s economy.Along with that, your credit report is just as important. When you need financing for a mortgage or a car loan, it is important that you not only have a decent report, but that you also have one that is accurate.
Today you have easy access to your credit report. You can analyze the report to ensure that the information is indeed correct. It is quite common for people to have errors on their reports today. However, you do not want to have incorrect information on the report when you were applying for a loan with the bank.
What happens if you find something that is wrong when you go over the report? Do not worry. The information on the report is not set in stone. There are ways to fix the errors and guarantee that the report is accurate.
The process for dealing with disputes is simple and can be done online, by phone, or through mail. You need to give them your personal information including your social security number. Also, you have to list the company and account that you are disputing. And, lastly, you list a reason for the dispute. After you do this, the credit agency should follow up with you in about a month.
4 Credit Myths Everyone Should Know
By Mike WaymanGiven the economic uncertainties that we live in today, it is not uncommon that you might consider applying for a loan or needing to make a purchase off of credit. What is the best way to go about getting the right financing for your needs? It probably depends on your situation. And while you have probably heard on the news the reports about banks tightening their standards, you still have options to get the money you need. However, you need to be aware of common myths and mistakes people usually make when it comes to dealing with credit. Here are 4 good myths to keep in mind.
1. Credit Score = Credit Report. There is a difference between your credit score and your credit report. The credit score is a number, while the report lists a detailed history of your finances. This “report” includes payment history, balances you might owe, anything past due, etc.
2. Don’t check your credit report if you’ve paid your bills. Today many people have become victim to identity theft. If you do not check, you will never know if you are one of them.
3. Checking your credit report damages your credit. This will not damage your credit. Check it today!
4. Boost your credit by paying off bills fast. Your credit score reflects payment over time. Your score will not change overnight.
The Importance of Good Credit in the New Economy
June 16, 2009
By Mike Wayman
Our economy has pushed millions of American consumers over the financial edge. Many have lost their homes, and, likewise, their credit has suffered tremendously. This can lead to a spiral of economic problems as many consumers use credit to bail themselves out of short term cash flow problems.
Imagine the following: one of the breadwinners in the household or the only breadwinner loses their job due to corporate downsizing. Credit card payments and other credit related payments fall behind first, as is common, due to the fact that most people prioritize making their mortgage payments before anything else.
Luckily, the job loss was only temporary. This breadwinner was able to acquire a new job quickly, albeit, at a lesser rate of pay. Money is tight for the family but the family credit score has been completely damaged. Now, due to multiple past due account balances, the score of both individuals in the household is hovering just above 500.
The problem in the new economy is that underwriting guidelines for all forms of credit are now much more selective. Should the family described above encounter any financial difficulties in the near future, it will be nearly impossible to borrow money to help in the short term for a number of reasons. First, many credit card companies will reduce the remaining balances on existing credit cards down to what is owed if the borrower fails to pay on time. These clauses are in most credit card contracts. Second, acquiring new credit will be nearly impossible, that is, unless you are willing to pay rates that are sky high. These are burdens that most would like to avoid but nevertheless, these burdens are commonplace.
Credit repair can help some people but not everyone. Credit repair does not really help borrowers that habitually fail to pay their debts on time, whether they have money or not. However, if your hardship is temporary in nature, credit repair can be an effective way to restore your credit to the point that you won’t be saddled with a terrible score.
A Credit Repair Strategy that Works
June 15, 2009
By Mike Wayman
One of the credit repair strategies that works for consumers is to manage your debt ratios on consumer credit cards effectively. For example let’s say that consumer A has three credit cards with Chase, MBNA and Discover. Each have various balances and limits. For the purposes of illustration let’s assume consumer A has the following profile:
Chase card: balance $4374.00 limit: $6000.00
MBNA card: balance $2463.00 limit: $3000.00
Discover card: balance $3225.00 limit: $4500.00
Calculating the existing debt ratio on each card is simple: just divide the existing balance by the credit limit. The existing debt ratios on each of these cards is:
Chase card: balance $2374.00/limit: $6000.00 = 39.6%
MBNA card: balance $1463.00/limit: $3000.00 = 48.8%
Discover card: balance $2225.00/limit: $4500.00 = 49.4%
Maintaining a high ratio negatively affects your credit score. Typically, it is advised that your debt ratio on any given credit card stays lower than 25%. If you can afford to pay them down, do so. If not you still have a number of options at your disposal.
One option is to call your credit card issuer and ask them to increase your credit limits to make your ratios on your cards reach a limit that will improve your credit scores.
Another option at your disposal is to look for a new credit card that will give you a high enough limit to reduce your ratios so your score can benefit.
The recession has limited the practicality of this strategy as many credit issuers are scaling back on increasing credit limits. You can always inquire with your credit card issuer if they are offering credit limit increases before you ask for an increase in your limit.
With the credit markets drying up, seeking out trustworthy credit repair companies is a very good option that you still have at your disposal.
Who Should You Order Your Credit Report From?
June 15, 2009
By Mike Wayman
With so many credit report companies offering credit report services these days it can be difficult to tell who to get your credit reports from. National television commercials offer free credit reports to consumers but there has to be a catch, right?
The catch is quite simple. Many of these “free” credit report providers aren’t the well intentioned do-gooders they say they are. In fact, what they’re really after is what’s known as an “up-sell” in the sales industry. Sure, they might give you something that looks like a full fledged credit report, but what they’re really after is the ability to sell you their products and services.
The most annoying aspect of these free credit report websites is that they will continue to email you for years if you let them in their efforts to sell you their credit repair services. I like to think of these free credit report sites as gigantic bait and switch schemes. They reel you in with the bait (a free credit report) but they immediately switch to sales as soon as they give you the report.
You also need to be careful about who you give your social security number to these days. As a former police officer I’m highly suspicious of anyone that asks me to give out my social security number, especially when the product they provide is completely free of charge. Isn’t your social security number more valuable than a free credit report?
My advice is to get your credit reports directly from the credit bureau’s themselves. Just Google Experian, Transunion, and Equifax. You’ll be able to get a valid copy of your credit report directly from the source.
If you are looking for a free credit report to begin the credit repair process, I would first seek out a trustworthy credit repair company and ask what the credit repair representative advises. Some companies will want you to order your reports directly from the bureaus while other credit repair firms will want to pull credit on your behalf. If you are seeking a credit report for your own use, the bureaus will give you a free copy every year if you ask for it.
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