Archive for January, 2008

Common Credit Mistakes – That affect your Credit Score

Thursday, January 31st, 2008

Your credit score could be affected by little mistakes made on your part. These mistakes are made all the time, and most don’t realize the impact on your credit report and credit score. We have seen these common problems quite often, even though you are providing help for a family member or friend.

Co-signing for loans:

One of the most common credit mistake is co-signing on a loan for friends and family members that don’t pay there bills. Yes you thought you were helping someone out, but in return hurt your personal credit. Over the years we have seen more and more people helping out other people with loans, and there credit report is littered with late payments. The result is sorry we cannot help you with the loan you are applying for because your credit score is too low. Late payments will drop your credit score 100 points. So if you had a 700 FICO score, now you have a 600 FICO score. So don’t co-sign for someone else. They need to learn how to establish credit on there own.

Closing Credit Card Accounts:

Fair Isaac Corporation does not recommend closing out credit cards, especially if the card is in good standing. Once you close out a card that is a good revolving line of credit, you just dropped your scores. This credit was reporting in good standing with a credit limit, the credit limit is a part of your credit score. So if you close it, you score will drop due to good credit being removed.

No Credit Cards will hurt your Score:

If you thought it was ok to avoid having credit cards you are wrong. Fair Isaac recommends having credit cards, but use them responsibly.

High Credit Card Balances:

High credit card balances will lower your credit score as well. According to Fair Isaac your balance should not be more than 30% of credit limit. The lower your balance is the higher your credit score will be. This is the quickest way to increase your credit scores.

Don’t give up:

Maybe you have made some mistakes, and now you are on the road to recovery. Remember your credit is just a snapshot of your credit during a particular time. You can always improve your credit by paying down your balances, and being on-time with your payments to creditors.

ID Theft Basics – How to Protect yourself

Thursday, January 31st, 2008

Current studies show that ID theft is at epidemic proportions. The Federal Trade Commission surveys estimated that there are close to 9.9 million victims and growing by 2 to 3 million a year.

For individuals that are not victims of identity theft, the best thing you can do is check your credit report regularly, focusing on two categories.

• Inquiries from unfamiliar companies. Here we are talking about someone applying for something in your name in a state that you don’t live in. Remember inquiries are the result of you applying for credit.
• Unfamiliar Accounts (tradelines). Are there debts or new credit listed on your credit report that you are not familiar with?

There are 3 major credit bureaus that provide services to monitor your credit report. These services give e-mails to you promptly if there are any changes to your report.

What to Do if ID Theft happens to you.
You want to keep a detailed log of events as you start the dispute process. You do this in case you run into problems with a creditor. The first step obviously is contact the 3 credit bureaus, local police, creditors, etc…… You keep detailed conversations logs with any of these entities you communicate with. Also keeps receipts, bills, or out of pocket expenses you incur during the process of disputing. I would also make note of the emotional stress and how it is affecting your work performance and personal relationships. In addition your expenses and time could be tax-deductible in certain circumstance.

Contact Law enforcement
Here is the properties procedure for contacting the authorities so you can file a formal report. You should include all fraudulent accounts in the report. As the Credit Bureaus say they are able to remove disputes, remember to keep a copy of the report number and contact info.
Who to contact:
• Local Police Department
• FTC 800-438-4338 or 800—ID THEFT

Credit Bureaus – Steps to take with the CRAs

• Notify one of the credit bureaus fraud units that you are victim of Identity Theft. This Bureau will be responsible for telling the other 2 Bureaus. (Equifax: 800-525-6285; Experian: 888-397-3742; Trans Union: 800-680-7289)
• Tell Bureaus to flag you credit report with fraud alert
• Get a copy of your credit report with scores
• Once you have read your report, send a dispute letter, accompanied with police report along with the FTC fraud affidavit specifying which accounts are fraudulent.
• Subscribe to the Bureaus monitoring services of your credit report
• Consider signing up for Identity Guard.
• Ask the Bureaus to contact the creditors that fraudulent activities have taken place.

Debt Collectors- You will be getting calls from debt collectors more than likely. If they call you:

• Get the debt collectors companies name, address and there phone number. Let him or her know you are noting the time and date of the conversation in your log activity book
• Inform the collection agency you are a victim of Identity Theft
• Provide the FTC uniform fraud affidavit
• Ask for number and name of credit issuer.
• Send the debt collector a letter, stating that you do not owe this debt and that the account has been close.
• Request in writing that the account is being flagged as fraudulent, and is being closed. You also should request in writing that the fraudulent account is being removed from your credit report.

New accounts opened in your name: the Identity Thief has opened new accounts in your good name: what to do. The credit report you pulled should list all creditors that have accounts in your name with contact numbers.

• Notify each creditor of the identity theft that has taken place to you. You will be asked to send a fraud affidavit. (Be sure to put all of this in your log)
• Ask the creditors to send you any application or fraudulent activity that has happened in your good name.
• Add passwords to all accounts
• If the thief has got a hold of your checking account, credit cards, get replacements with new numbers. Call and request these accounts to be closed as well.
• Fill out FTC uniform fraud affidavit.

Your Checking account- If the thief has wrote checks in your name here is what you do.

• Call your local police, and file a report
• Call your bank and close the account immediately
• Remember to keep good logs
• Typically your bank will refund you your money, and ask for a copy of police report filed.

This stuff is serious business; I hope this will help you resolve issues involving identity theft to you.

How to read a Credit Report

Monday, January 28th, 2008

Have you thought about getting a copy of your Credit Report? Years ago there were complaints that credit reports were hard to read for the consumer. In past years Equifax, Experian and Trans Union had changed the format of the reports to make them more readable and understandable. Each of the 3 Credit Reporting Agencies or ( CRAs) have ways of referencing a credit report with them.

For Instance:
Equifax – Confirmation number
Experian – Report Number
Trans Union – File Number

These particular reference numbers will be asked if you are disputing any of these credit bureaus.

To make matters more difficult, “Credit Report” is not the official term. The Fair Credit Reporting Act calls the credit report for consumers “Consumer Report.” The industry refers to the report that creditors sell as “credit report.” Nether less either one has the same purpose. They give an account of your personal credit history with creditors.
Here is an example of what you need to identity you with all 3 Bureaus.

First Name:_______ Middle Name:________ Last Name:_______

Birth date:_______ Social Security Number:________

Current Address: Typically two year residence history

Current Employer: ________

Here is what to expect to see on your credit report.

1. Your identifying information listed above:
2. Your Payment history, including auto payments, credit card payments, installment loans, and mortgage history.
3. Public Records: bankruptcies, tax or other liens, and judgments.
4. Inquires showing which companies accessed your credit report for different purposes.

Identity Information

This information is very important, and needs to be accurate. The CRAs use your personal information to determine which report to route your information. If you input the wrong information when getting your credit report, it can lead a report that results in mixed files, and other inaccuracies. This definitely pertains to inputting the correct social security numbers. Maybe you are a JR, and your information is getting mixed with your father or son. Believe it or not this is a common problem with credit reports. You may have to dispute this information with the CRA that is reporting incorrectly.

Credit History

A bankruptcy can remain on your credit report for 10 years; other negative information typically is on there for 7 years unless you can get the creditor to give you a letter to delete a negative item from the CRAs. A tax lien that is not paid can stay on your report for ever. Once you pay it, from the paid date it stays on your report for 7 years. Here are terms and there meaning as they are listed on your report.

 Public Records: Bankruptcies, court and default judgments, liens, and foreclosures
 Late Payments: Typically falls into one of the four categories, 30 day late, 60 day late, 90 day late, and 120 day late.
 Charge Offs: Accounts that are in default of original contract and terms. Charge off is a book keeping term which means the creditor reports obligations as a loss.
 Collections: A account that is so delinquent that the obligation is turned over to a collection company for collection.

Typically after all the bad is listed, the report will list all the accounts in good standing. Experian and Trans Union reports “never late”, and Equifax reports as “pays as agreed.”
You will want to always make sure all information is accurate.


Any time someone checks your credit for loan, credit card, installment loan or a mortgage you will have on of two types of inquiries: “hard” and “soft.” Soft inquiries don’t drop your credit score, but too many hard inquiries you could drop your score.

Account History Status Codes

Equifax report will list codes showing how you are classified when you do not pay your bills on time. Also a credit report will show types of credit, “I” for installment loan, “R” for revolving and “M” for mortgage. Here are numeric codes as well.

1: On Time
2: 30-59 Days Past Due
3: 60-89 Days Past Due
4: 90-119 Days Past Due
5: Over 120 Days Past Due
7: Included in Wage Earner Plan
8: Repossession
9: Charge Off
Blank: No Data Available for that month
0: Unrated

Description of Accounts

 Date Account Closed
 Date Account Opened
 Company Name – The Creditor
 Account Number
 High Credit
 Credit Limit
 Terms of payments 360 months or 30 yrs
 Number of months reviewed
 Date Reported
 Balance
 Past Due Date
 Activity
 Date of Last Activity
 Charge Off Amount
 Deferred Payment Date

About the Author: Mike Clover is the owner of is the one of the most unique on-line resources for free credit score report, Internet identity theft software, secure credit cards, and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.

How Bankruptcy Reform will affect Credit Reports and Credit Scores

Thursday, January 24th, 2008

Now that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is passed, it is a lot harder to wipe away your debt. At one time just about anyone could file Chapter 7 and wipe the slate clean. This new bill has a lot of debate. Some say it is prejudice against the consumer. Regardless of the merit of this passed bill in 2005, it makes it tougher these days to file Chapter 7 Bankruptcy. One of the major changes is if your income is greater than the state median income, your motion to file Chapter 7 will be dismissed and you will have to file Chapter 13 repayment plan for 5 years. With this new bill more people are being forced to file Chapter 13, as opposed to Chapter 7.

Differences between the two Bankruptcies:

Chapter 7 Bankruptcy- A chapter 7 bankruptcy basically dissolves all debts that legally qualify for this process. Typically most debts get discharged in this type of bankruptcy. Discharged in Bankruptcy terms mean all liabilities get erased. So in other words you are no longer legally required to pay back a unpaid debt included in the bankruptcy. On your credit report from file date for 10 yrs.

Chapter 13 – A chapter 13 is different than a Chapter 7 because the consumer must pay off debts over time. You pay these debts to a court appointed Trustee. This option is usually for individuals that have steady income. On your credit report from file date for 7 yrs.

Since Chapter 7 is no longer the easiest option for filing bankruptcy, you might consider letting your debts go to collection if you are in a pinch. You always can go back to the collection companies and negotiate a lesser balance agreement. The original creditor pretty much already wrote off the debt anyways. So these collections companies just bought the debt, and will settle for pennies on the dollar. This is just an option. It is better to let an obligation go to collection and settle on the debt once you are on your feet versus filing Chapter 7 or 13. We also know that there are situations where you need to file Bankruptcy.

So we believe that there will be less people filing Chapter 7 since it’s not available to everyone now. I am sure you can see how each bankruptcy could affect your credit differently. This new reform bill will force more people to be a little more responsible, and less likely to jump on the bankruptcy bandwagon. More people will also be forced to file Chapter 13 and pay back a portion of the debts. This option is less harsh on credit than Chapter 7. Regardless filing bankruptcy period will destroy your credit score and credit report for quite a while.

About the Author: Mike Clover is the owner of is the one of the most unique on-line resources for free credit score report, Internet identity theft software, secure credit cards, and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.

Fix Credit Report Mistakes – Learn How.

Monday, January 21st, 2008

This is a step by step guide that will give you the tools to fix inaccurate information on your credit report. First you need to check when the information being reported is set to expire. Next use our customizable dispute letter, and sent it to the Credit Bureaus.
It is really that simple.

Step 1: Look for incorrect information being reported about you:Order a current copy of your credit report with scores from all 3 Bureaus online. Print your credit report and view it carefully. Make note of any information that is not correct. Determine when the information is set to expire. This guide will help you determine if and when the negative information on your credit report will expire.

Public Records:

a.Bankrupcties- Chapter 7 Bankruptcy will expire from your report after 10 years of file date. Chapter 13 will expire from your report after 7 years from file date.
b. Judgements- Court ordered decisions stay on your credit report for 7 years from file date. Example: child support, civil and small claims court.
c.Tax Liens- Tax liens stay on your credit report until you pay it off. Once you have paid the tax lien, it will stay on there 7 years from paid date. This applies to City, State, and Federal tax liens.
Charge –off – records- this record will show up on your credit after a creditor has wrote off the debt as a loss. This will remain on your file for 7 years.
Inquiries- Records of application for credit. These types of inquires usually stay on credit for a maximum of 2 years. Checking your credit online with credit sores does not damage your credit like these inquires do.
Closed Accounts- This information whether negative or good stays on your credit report for 7 years.
Collection Accounts- This record should expire after 7 years from the last 180 day late payment that led the account to collection to begin with. The expiration date is the same even if the collection is sold multiple times.
Foreclosure Records- Foreclosure and property deed-in-lieu records remain on credit for 7 years from foreclosure date.
Late Payments- Late payments stay on record for 7 years.
Repossession Records-Vehicle repossessions stay on you credit report for 7 years.

Use this expiration information to determine what should not be on your report. You should also check for information that is being report on there that is not yours. Also make sure there is no information that are cross records either.

Step 2: Write Dispute Letter
Once you have determined what is not correct on your report, it is time to write you disputes to the Bureaus. You will need to send the letter to each of the credit bureaus via certified mail.

Example dispute letter:
Your Name Mailing Address City, State, Zip
Re: Disputing Inaccuracies on My Credit Report
Name of Credit Reporting Bureau Mailing Address City, State, Zip
Dear Sir or Madam:
I am writing for two (2) reasons:
1. To dispute certain information in my credit file; and
2. To have you investigate/re-investigate and remove inaccurate information from my Credit Report and prevent its re-insertion. The item(s) I dispute are encircled on the attached copy of the credit report and further identified by (identify the items by name of source, such as creditor or tax court, etc. and identify type of item, such as credit account, judgment, etc.)This item is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or whatever specific change you are requesting) to correct the information.(If you are enclosing documents such as copies of canceled checks, payment records, court documents, send copies only, you should always retain the originals — and use the following sentence.)
Enclosed are copies of the following documents supporting my position?
Please re-investigate this (these) matter(s) and (delete or correct) the disputed items within the time frame required by the Fair Credit Reporting Act (FCRA) and inform me in writing of the outcome. Thank you for your time and consideration in this matter.
Your name

Step 3: File your dispute by Submitting your dispute by mail is the suggested way, but only Equifax and Transunion allows this kind of dispute. Experians requires all disputes to be submitted online.
Here is the 3 Credit Bureaus information.

P.O Box 740256
Alanta, GA 30374-0241
Dispute online

Dispute online

2 Baldwin Place
P.O. Box 2000
Chester, PA 19022
Dispute online

Step 4: Manage Results
The 3 Credit Bureaus have 30 days to investigate your dispute and update your credit report if the dispute his valid. Once they have investigated your concern, they will send you a letter stating what was updated on your credit report. If you were not able to get a inaccuracy fixed you will need to resubmit your dispute with new documentation.

First Time Home Buyer – Tips & Faqs

Monday, January 21st, 2008

If you are a first time home buyer, you more than likely don’t know what the process is. Most first time home buyers rely on a real estate agent to guide them a long. Here is the advice and tips that will make your home buying experience a good one.

First Step:
1. Find out what you qualify for. This is the most important part of the home buying process whether you are a first time home buyer, or someone upgrading to a bigger home. We know that getting the approval process done first is not as fun as looking at homes. But you could be wasting your time and everyone involved by not getting your finances in place first. I would recommend getting a current copy of your credit report with scores before calling a lender. Make sure you know your credit situation, so you are an educated home buyer.

Second Step:
2. Find a seasoned realtor that knows what they are doing. There are too many realtors in the real estate business that don’t have a clue when trying to find you a home. I would get a recommendation from you lender. They typically know who will get the job done for you. You don’t have to buy a home with a realtor that works for some big name brokerage. There are plenty of good realtors that work for small companies as well. Do some research?

Third Step:
3. Once you have secured financing with a reputable lender and have found a seasoned realtor, then you are ready to start the looking process. If a realtor takes you out and only wants to show you 4 to 5 homes and that is it, this is a sign that all they are interested in is a commission check. This is the biggest purchase of your life, it usually takes all day to look at homes and then make a decision. In some instances there may only be 4 to 5 homes to look because that is all that is available that meets your criteria. I am sure you get the idea though.

Fourth Step:
4. Close on your new home. Hopefully you have made the right decisions and got reputable and honest real estate professionals to make it happen for you.
Conclusion: Make sure you can buy first, and what type of loan you qualify for. This is essential so you will not be disappointed. You should also have selected seasoned and professional real estate service providers. Remember you are relying on real estate professionals to help you make the biggest purchase of your life.

About the Author: Mike Clover is the owner of is the one of the most unique on-line resources for free credit score report, Internet identity theft software, secure credit cards, and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.

Your Credit Score and Credit Report are not determined by the following:

Monday, January 21st, 2008

Have you ever wondered what does not affect your credit score and credit report? There are factors that Fair Isaac doesn’t use in determining your credit risk. Fair Isaac says its scoring model complies with the Equal Credit Opportunity Act prohibiting against using racial or ethic data in credit decisioning. They also have said that based on independent research, it has shown that the credit scoring is not unfair to minorities or people with little credit history. The scoring model has been a consistent and accurate measure of repayment for all people who have credit history. So in other words, your ethnic background has nothing to do with a given credit score.

In a different perspective of the model, credit scoring can be a disadvantage for people who are not familiar with the system. For example individuals who are poor and low-income usually don’t have great mobility. They typically utilize local stores and credit grantors within there communities. Since most of these grantors tend to be small, they usually don’t report to the Credit Bureaus. With this in mind, this class of people tends to suffer the most because of the limited access to big banks and companies that report to all agencies.

Here is what Fair Isaac does not consider:

* Race, Color, religion, national origin, sex, or martial status.
* Age
* Salary, Title, Occupation, employer, date employed, or employment history
* Place of residence
* Any interest rate being charged on credit card account or other account
* Any items reported as Child/Family support obligations or rental agreements
* Certain types of inquiries ( Certain requests for your credit report or credit score)
* Any information not found in your credit report
* Any information that is not proven to be predictive of future credit performance.

Since there is so much information out there about what determines your credit score on your credit report, we figured we would give you a different perspective in this article.

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.