Archive for October, 2007

Fixing Credit Report Errors

Tuesday, October 9th, 2007

After taking the first step of obtaining a free credit score report, the next most common step to improving your credit score is to correct any errors that might be present. Strangely enough, errors do occur, and it is well worth taking the time to dispel such inconsistencies. You must carefully scrutinize the report in order to correct things like account numbers, names, wrong information, as well as items that are out of date. The last error type is the most common mistake and when corrected can have an important impact on your score.

There are guidelines that regulate how long certain kind of information can be recorded in your credit score. For example, most undesirable information that is over seven years old may be removed. This includes lawsuits, judgments, paid tax liens, accounts dispatched for collection, records of criminal activity (other than convictions), late payments, and even child support and many other pieces of possibly adverse information. This is great news for those that have blemishes on their credit report from years ago. These things will not show up forever. Even insolvencies that are older than ten years can be dismissed from your score. Getting rid of this outdated undesirable information can have an immediate impact on your score, especially depending on the severity of the problem.

It may seem silly, but it is just as important to check things like your Social Security number, name, address, phone number, and information concerning your occupation. These mistakes might be outdated or simply entered incorrectly. These errors actually do occur. In the same way, errors also occur concerning your involvement with certain accounts. It is possible that suits or credit accounts that do not belong to you show up on your credit report. This is also true of accounts that have been paid in full. Sometimes these accounts may not have been updated and still show an outstanding balance.

By filling out a request for reinvestigation form or writing a letter, you can correct these errors that are detrimental to your overall credit score. You should, as carefully as possible, reference every inaccurate or outdated piece of data that appears on your report as well as describe why that information is incorrect. The reporting agency will then investigate those items and contact you within 30 days to notify you of any changes. This process may also be expedited if you are trying to qualify for a mortgage or car loan. This is known as a rapid rescore.

Once you have rid your free credit score report of any incorrect information, you can then begin to add positive information. This might be through a new loan, a secured credit card or simply making responsible payments on the accounts you already have. By double-checking your credit report for errors you might save yourself a great deal of time in the task of recreating your credit merit.

Author: Mike Clover

Secured Credit Cards

Tuesday, October 9th, 2007

The paradox of improving or creating a credit score with the use of lines of credit may seem impossible. How are you going to prove your credit responsibility if no one will issue you a line of credit for doing just that? For people who find themselves in this situation, secured credit cards can be the answer. By using a secured credit card, an individual can demonstrate their ability to pay bills on time and use a card card responsibly.

Secured credit cards are issued when an applicant who has bad credit can offer some type of deposit or collateral for that amount of credit. This might be a deposit of a pre-arranged sum of money into a savings account, certificate of deposit, or money market. This way, the lender is covered if the applicant is not able to make payments, reducing the risk dramatically. This benefits the card holder by allowing them to create a credit history. Instead of spending cash, they can make purchases on the credit card and make responsible monthly payments to contribute to their overall credit score.

When using a secured line of credit, it is important for the cardholder to pay off the card in full every month. Just like any other card, interest will be charged on the outstanding balance of a secured credit card. The idea is to improve your credit score, not to acquire more debt. If an individual defaults on secured credit, the lender can then withdraw the defaulted amount from the security account to pay the debt. Though the debt will be paid, it may result in more damage to your credit rating. Be sure to discuss this with a potential secured credit lender to determine their policy on reporting to credit agencies.

When considering various lenders for a secured credit card, take the time to read the fine print and ask questions. Make sure you understand the interest rate that will be charged. You can expect for the rate on a secured card to be somewhat higher, but it should still be reasonable. Take every factor into account when making your decision. What are the grace periods, penalties for late payments, and any other fees that might be associated with the account.

Once you have obtained a secure credit card, diligently make payments on time and for the right amounts. After six months to a year of responsible credit use, many lenders will increase your limit, possibly even doubling it, which is great for your credit score. Continue to pay off the balance each month and your credit report will reflect the fact that you have more available credit that you are handling responsible.

Secured credit cards are a great way for people to get back on the right track. If you are serious about improving your credit or establishing a history, explore the possibility of a secured credit card. It is a great step toward teaching you to manage money more responsibly and showing lenders that you can.

Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.