Archive for July, 2008

Two credit scores only Q & A

Monday, July 28th, 2008

Hi Mike,
I have some questions for you about my credit scores. I recently pulled my credit report and noticed I only had two credit scores. One of the credit bureaus said n/a. I currently don’t have any credit cards or any outstanding loans. Most of everything I had went to collections years ago. I am just curious why the other two credit bureaus have credit scores and Equifax does not. Thanks for your help

Susie Jules

Hi Susie,
There are several reasons why you may not have a credit score with Equifax. Based on what you told me it appears that you don’t have any current credit revolving on your credit report. You are stilled getting scored with the other two credit bureaus because of old credit. Some of the creditors may have stopped reporting to Equifax due to no activity. If you want credit scores with all three credit agencies I would recommend opening some new credit cards. Once you have a bout 6 months of good payment history you should have credit scores with each credit bureau. To have better credit scores it would not hurt to have a mix of credit, like auto loans, mortgage loans, and credit cards. All of this is part of the credit scoring process.

Mike Clover

Your Credit Score Can Show High Debt to Limit Even if Paid In Full Each Month

Monday, July 28th, 2008

Many people, especially those who routinely travel on business, use credit cards as an accounting tool. They’re a great way to have all the records of gas purchases, hotels, airline tickets, etc. in one place.

And if your employer is reimbursing you for travel, it’s easy to pay those bills in full each time they arrive, so the balances don’t build from one month to the next. That should show up as no debt at all, right? Wrong.

Companies report on the statement balances, so the only way to avoid having those charges figured into your credit score would be to pay them off each month before the statement was generated.

If you have a credit card with a moderately low limit, and your travel expenses each month bring you near the limit, you could be doing more damage to your credit score than you realize.

One way to avoid this is to ask your employer to furnish you with a card for those expenses he or she reimburses. Then the expenses won’t show up on your credit report at all.

But what if you pay your own expenses? You may be a sole proprietor traveling or entertaining for your own company. In that case, call your credit card company and ask to have your limit increased, so the debt to limit ratio is lowered. Sometimes you can go on line and fill out a quick form to have this arranged – provided you have a good payment history with the card issuer.

But be careful – they may pull a “hard credit report” before granting the increase. As you probably know, the number of inquiries on your account also plays a big role in determining your FICO score. So if you’re about to apply for a loan for a home or a car, you might not want to do this. Call customer service first and ask the procedure.

If you believe they’ll generate an inquiry on your credit, you can instead spread your purchases over several cards, keeping the ratios low on each of them.

Quick credit tip: If you’re going to need credit within the next few months, a quick way to raise your FICO score is to stop using this convenient bookkeeping method. Write a check, or use your debit card for these expenses and let your credit cards go unused for a while.

After you have your new loan, get busy on raising those limits so you can go back to the convenience of using the card.

Author:Mike Clover is your resource for free credit score reports, fico scores, loans, credit cards, insurance , identity theft protection and credit repair advice.

Piggybacking no Longer Good for Your Credit Score

Monday, July 28th, 2008

Piggybacking to raise your credit score is just one more good thing ruined by greed.

Until recently, you could help your kids, siblings, or a friend establish a good credit rating by allowing them to become an authorized user on your credit card. This is, of course, assuming that you carried a low balance and always paid on time, so your own credit was excellent. You were, in effect, sharing your good credit standing with someone you cared for.

The other person didn’t need to use the card at all, but its entire history would be included in their credit report, lending them financial credibility through a positive account.

This was a great tactic to use for kids just beginning their financial lives and without any credit history of their own to fall back on.

But, like so many other good things, someone saw a way to profit from it, and ruined it for everyone else.

Credit repair companies began brokering the rental of authorized user slots on credit cards – for a fee in the range of $600. Before long, the credit bureaus got wind of the practice, deemed it fraudulent, and decided to stop counting authorized user accounts in their reporting.

What can you do instead?

If you’d like to help your child establish credit and you have a few dollars to spare, you can help him or her get a secured credit card. In this instance you deposit a set amount into a savings account in their name, and they use that savings account as security for a credit limit in the same amount.

By carefully using just a fraction of that amount each month, and paying it back promptly, your child (or other loved one) will establish credit in his or her own name. Once they’ve established themselves, the card will be moved to an unsecured status and the security will be released – and can be returned to you with interest.

Note that this is not a pre-paid credit card, and that a pre-paid card offers no benefit. The issuers don’t report to the major credit bureaus, so you could pay on time forever without a boost to your credit score.

Another good option is an unsecured sub prime card. These come with extremely high interest rates, so again, should be used sparingly and paid in full each month.

The two most important things to remember are first, to keep your balances low in relation to the credit you’ve been given – 10% is best, but under 30% is imperative. Second, pay on time, every time.

Author:Mike is your resource for free credit score reports, fico scores, loans, credit cards, insurance , identity theft protection and credit repair advice.

Credit and Divorce

Sunday, July 27th, 2008

Billy Bob and Sue got a divorce. The decree stated that Billy was responsible for certain joint credit card obligations. So Sue went on with her life not worrying about the credit card debt that was awarded to Billy Bob. Six months later Sue gets a call from the creditors wanting their money for the credit cards she forgot about. Sue told the credit card companies that those debts were awarded to her husband in a divorce decree. The creditor stated that they were not involved in the decree and she was still legally obligated to pay the joint accounts. Sue later found out that late payments appeared on her once spotless credit report.

If you are going through a divorce or contemplating on going through one-you might want to take the time to understand credit and the issues that can arrive as a result of a divorce. Most attorneys don’t explain what could happen if the other party does not pay a bill on a account attached to your social security number.

There are two types of credit accounts.
• Joint Accounts
• Individual

If you are getting ready to apply for credit whether it’s a credit card or a mortgage loan you will be asked to state whether the account is joint or individual.

Joint Credit Accounts Your income, financial assets, and credit history – and your spouse’s – are considerations for a joint account. No matter who handles the household bills, you and your spouse are responsible for seeing that debts are paid. A creditor who reports the credit history of a joint account to credit bureaus must report it in both names (if the account was opened after June 1, 1977).

Advantages/Disadvantages: An application combining the financial resources of two people may present a stronger case to a creditor who is granting a loan or credit card. But because two people applied together for the credit, each is responsible for the debt. This is true even if a divorce decree assigns separate debt obligations to each spouse. Former spouses who run up bills and don’t pay them can hurt their ex-partner’s credit histories on jointly-held accounts.

Individual Account: Your income, assets, and credit history are considered by the creditor. Whether you are married or single, you alone are responsible for paying off the debt. The account will appear on your credit report, and may appear on the credit report of any “authorized” user. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), you and your spouse may be responsible for debts incurred during the marriage, and the individual debts of one spouse may appear on the credit report of the other.
Advantages/Disadvantages: If you’re not employed outside the home, work part-time, or have a low-paying job, it may be difficult to demonstrate a strong financial picture without your spouse’s income. But if you open an account in your name and are responsible, no one can negatively affect your credit record.

With divorce being a common problem these days make sure you get joint accounts that your spouse is responsible for out of your name. If you don’t it could affect you down the road if they decide not to pay the bill.

Author:Mike Clover

Credit Management-I wish someone had told me.

Sunday, July 27th, 2008

Being a lender I see bad credit management all the time. The amount of credit reports I pull; you would be amazed how many people don’t know how to manage their money. I have come to the conclusion that most Americans don’t know the value of a dollar. I am 35 and know for a fact that my generation has been spoiled to the point of no return. My generation is called the generation X.

The newer generations are even worse. They have never gone with out. Their parents just like mine always bought what their kids asked for. This is part of the problem. Our country is extremely rich and we have no idea what it is like to go with out. We have not had rough times since the “Great Depression.” If we want someone these days we just go out and charge it on our credit cards. You cannot turn on TV without someone enticing you with “no payment for 3 years.” Its kind of the “buy now pay later philosophy.”

I honestly think our kids and parents need to get back to the basics. Just because you have the money does not mean your kids need it. Buying your kids everything they want is a bad choice. All this teaches them is they can have just about anything they want.

The problem is once your kids get out on there own they will not know how to manage their money. This is because parents have bought their kids what ever they want most of there young lives.

Once your kids are gone off to college, they will have a rude awaking. Instead of saying no they will buy and get into debt to get what they want.

Most of this education starts at home by saying NO, you don’t need that Xbox. No you don’t need that etc……….

The next step is to have mandatory credit education classes in school and college. These classes should teach young people how to manage there credit, credit cards, money and overall credit report education. They also need to teach the affects of bad credit management and how it will affect your life for 7 years.

If this starts taking place I personally believe that there would be less bankruptcy, less credit card debt, because in the end its just stuff.

Author:Mike Clover

Beware of Illegal Credit Repair Scams

Saturday, July 26th, 2008

When you want to buy a home or a car and your credit score causes would-be creditors to shake their heads and escort you to the door, it’s tempting to respond to those high-volume hucksters on TV who promise to repair your credit.
They all make the same claims:
• “Credit problems? No problem!”
• “We can erase your bad credit — 100% guaranteed.”
• “Create a new credit identity — legally.”
• “We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”
The truth is, they can do none of that. They can’t erase bankruptcy, judgments, or overdue bills. The only thing they can do is help you get errors removed. Unless everything negative on your report is in error (such as when you’ve been a victim of identity theft), only time, a conscious effort, and a personal debt repayment plan will improve your credit report.

While there are free and low-cost services available to help you, you won’t see them advertising. The only reason a credit repair company spends the money to advertise is to get you as a customer – and to enrich their own bank accounts at your expense – sometimes by many thousands of dollars.

By using them, you’ll only make your financial situation worse by paying them to do something you can easily do yourself. But even worse than losing money is the fact that you could be subject to prosecution if you follow some bad advice. (See items 4 & 5 below.)

If you think you need help removing errors and do decide to respond to a credit repair offer, look for these tell-tale signs of a scam:
1. Companies that want you to pay for credit repair services before they provide any services. (This is a violation of the Credit Repair Organizations Act.)
2. Companies that do not tell you your legal rights and what you can do for yourself for free.
3. Companies that recommend that you not contact a credit reporting company directly.
4. Companies that suggest that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
5. Companies that advise you to dispute all information in your credit report or take any action that seems illegal, like creating a new credit identity. If you follow illegal advice and commit fraud, you may be subject to prosecution.
You could be charged and prosecuted for mail or wire fraud if you use the mail or telephone to apply for credit and provide false information. It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses.
If anything a credit repair company suggests doesn’t feel right to you – just don’t do it.

Mike Clover:
CreditScoreQuick.comYour Resource for free credit score reports, fico scores, loans, credit cards, insurance and identity theft protection and credit repair advice.

Parents! You Must Home School Your Children

Saturday, July 26th, 2008

No, I don’t mean you need to teach them grammar, math and geography. You can leave those subjects up to the school system and hopefully they’ll learn what they need to know with just a little help from you at homework time.

I’m talking about a subject that will have far more impact on their lives than knowing the capital of Montana, or the proper conjugation of a verb. I’m talking about money management. This is a subject schools should, but don’t address.

Start when your kids are old enough to start asking for a quarter to put in a candy machine. Show them how to budget and save for special toys, and teach them that we all have to make choices, because you can’t spend the same dollar twice.

When they’re a little older, teach them about bank accounts. Get them a savings account and let them make the deposits and watch the balance grow. And while you’re at it, explain to them how that nest egg will benefit them later. But don’t stop there – teach them about checking accounts and the necessity to keep careful accounting.

Show them how money melts away as a result of an overdraft. Once, while working in a grocery store, I met a young woman who hadn’t learned this lesson. At that time, the bank was charging about $20 for each overdraft, and this girl wrote three NSF (non-sufficient funds) checks at our store in just two days. The sad part was, none of those checks was for over $10. So while she thought she was spending about $25, she created an $85 obligation at the bank.

By high school kids should be learning about credit reports and credit scores. Hopefully yours looks good and you won’t be ashamed to show it to them. But if it’s bad you can use the opportunity to show them how that is affecting your life in negative ways.

The first step is to get your free credit report. Then make sure you understand how to read it before you start explaining it to the kids. Show them how every loan and every credit card shows up there as a part of your financial history – and how all those things are combined to give you a credit score. Let them know that while your finances used to be a private matter, now your credit score can be accessed by almost anyone.

Above all, remember to make this education an ongoing process. Help them make sound money management a part of their daily lives so that when they get out on their own, all doors of opportunity will be open to them.

About the Author: Mike Clover is the owner of is the one of the most unique on-line resources for free credit score report, fico score, free credit check, identity theft protection, secured credit cards, student credit cards , credit cards, mortgage loans, auto loans, insurance, debt consolidation ,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

What to Do If You’re a Victim of Identity Theft… Part I

Friday, July 25th, 2008

Right after you stop reeling from the shock, it’s time to take action.

You may have learned of the identity theft by examining your credit report and finding inquiries from unfamiliar companies (a sign that someone has applied for credit in your name) or by finding debts or new credit accounts that you don’t recognize.

If instead you learned of it only when debt collectors began to call, get a copy of your report immediately. You’ll need it when you take the next step: Contacting law enforcement.

You must file a formal report, because you’ll need a copy of the report when you contact the credit bureaus and respond to debt collectors. Your police report should include all the fraudulent accounts you identify when examining your credit report.

• Your Local Police Department
• FTC 800-438-4338 or 800-ID THEFT

As you begin this process, keep a detailed log of everything you do, everyone you speak with, and what is said by both parties. Keep track of every expense you incur, as well. Put all receipts in one safe place for easy access later. In your log, make note of the emotional stress and how it is affecting your work and your personal relationships. Depending upon circumstances, your actual expenses and your time loss could be tax-deductible.

Now contact the credit bureaus. Notify one of the credit bureau fraud units that you are a victim of Identity Theft. That Bureau will take responsibility for telling the other two bureaus. (Call Equifax: 800-525-6285; Experian: 888-397-3742; or Trans Union: 800-680-7289) Next:

• Tell the Bureaus to flag your credit report with a fraud alert
• Send a dispute letter, accompanied by the police report and the FTC fraud affidavit specifying which accounts are fraudulent.
• Subscribe to the bureau’s monitoring services
• Consider signing up for Trusted ID services – which will block your credit report so only you can use it.
• Ask the Bureaus to contact the creditors and let them know that fraudulent activities have taken place.

You’ll probably have to deal with debt collectors. Here’s how to handle them:
• Get the collector’s name, company name, address, and phone number – noted in your detailed log. Inform the caller that you are recording this information, along with the date and time.
• Inform the collection agency you ar a victim of Identity Theft
• Provide the FTC uniform fraud affidavit
• Ask for the name and number of the credit issuer they’re representing
• Send the debt collector a letter, stating that you do not owe this debt and that the account is closed.
• Request in writing that the account be flagged as fraudulent and ask that it be removed from your credit report.

What to Do If You’re a Victim of Identity Theft… Part II

Friday, July 25th, 2008

By now you’ve contacted your local law enforcement and the FTC and have the proper documentation in hand to show that you’ve been a victim of identity theft. You’ve notified one of the major credit bureaus, who has in turn notified the other two.

You’ve been diligent about logging every conversation, along with its date and time, and you’ve kept a careful record of every expense associated with reclaiming your own identity.

You’re daydreaming about what you’d like to do to the person who caused you all this grief, but that won’t help. You need to keep a clear head and keep working on putting everything back to rights.

One of the first things you did when you discovered the identity theft was pull your credit report. Now do it again, because more information may have come in since the last report.

Examine it again for new entries, and if you find some, contact the credit bureau again and let them know of the new fraudulent accounts or charges.

If either the first or second report showed new accounts opened in your name, the next step is to contact each of those creditors and do the following:
• Notify each creditor of the identity theft and get the address where you need to send the fraud affidavit.
• Ask the creditor to send you any application that has been made in your name
• Ask to have the account closed and flagged with a fraud alert

If the thief has been using your credit cards, you need to notify the credit card issuers immediately and have those cards cancelled. They’ll issue new cards, with new numbers. Check to make sure that the address and e-mail address in their database is correct, so they don’t just send your new cards to the thief! Of course let them know which charges on your account are fraudulent, and of course note all of these conversations in detail in your log.

If the identity thief has written checks in your name…

• Call your local police and file another report
• Call your bank and close the account
• Get the proper address to send a copy of the police report
• Ask for a refund of monies fraudulently withdrawn
• And of course, carefully record each of these steps in your log

Identity theft costs millions each year, both in money and time loss. It’s a rude and devastating intrusion into your life. But if you take the steps we’ve outlined, you’ll get through it with the least amount of stress.

Protect Your Credit Score – Avoid These Common Errors

Friday, July 25th, 2008

Two of the most common credit mistakes appear at first to be smart moves:

• Closing Credit Card accounts you aren’t using
• Avoiding having any credit cards at all

It doesn’t seem sensible, but it’s true. In order to have a high score, you need to have plenty of credit available – credit that you aren’t using!

The Fair Isaac Corporation’s credit scoring system says that having low credit balances compared to the amount of credit you could be using makes you a good credit risk. This is based on percentages, so if you had $20,000 available and only used $5,000 it would show that you used only 25% of your available credit – but if you closed some accounts and now had only $10,000 available, it would show that you are using 50% of your available credit – and thus lower your FICO score.

Similarly, having no credit cards not only means that you have no ready credit available, but offers no verifiable record of your payment history. Never mind that you’re so careful with money that you either pay cash or go without. That kind of responsibility doesn’t count in the world of credit scoring.

Creditors want to know that you pay your bills on time, so having a couple of credit cards that are in good standing shows your financial reliability.

High Credit Card Balances are the next mistake. According to Fair Isaac, your balance should never be more than 30% of the credit limit on any one card. So avoid the temptation to move all your high interest balances over to a low interest credit card – unless you can do it and still stay under the 30% mark on the low interest card.

Perhaps the most dangerous mistake of all is Co-signing for loans. You do it to help a friend or family member, but that act of kindness can come back to bite you – hard. Not only do you add debt to your credit report, the fact that the person couldn’t get credit without a co-signor means that there’s a good possibility that they aren’t responsible with money – and that before long, late payments will begin to show up on your credit report.

Late payments will drop your score a full 100 points – and that could mean the difference between you being able to qualify for a loan or not. At the very least, it will mean that when you need personal credit, you’ll pay higher interest rates.

Unless you’re co-signing for a child who is living with you and you can not only monitor bill paying, but pay the account yourself if your child doesn’t – just don’t do it. Letting a friend or relative ruin your credit is not a good way to maintain a good relationship.

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.