Secrets of Credit Score Part 1

Credit scores have proven over time to be a reliable indicator of whether or not a consumer would repay a loan. Credit scores allow lenders to quickly make on-the-spot credit decisions based on a 3-digit number that sums up your credit worthiness. There are many credit scoring models in use today; all are designed to rate your likelihood to repay your debts. Credit scores are derived from credit reports, so it is vital that you know everything you can about credit reports.

Credit scores typically range from about 300 to 850. Consumers with high credit scores are more likely to obtain lower interest rates and better terms on loans, including mortgages, and credit cards (higher credit scores can also result in lower insurance rates). Credit scores are available as an add-on feature of the report for a fee. Credit scores are being used for everything these days, including mortgages, credit cards, and insurance and even employment decisions. Your credit score can be the number one thing that causes a credit company to say "yes" or "no" to your credit application.

Credit scores help lenders assess risk more fairly because they are consistent and objective. Consumers also benefit from this method. Credit scores are calculated based on data in your credit reports and, as fluid numbers, change over time, sometimes on a daily basis! That's why it’s so important to stay on top of your credit reports for changes that could affect your credit scores. Credit score is only one part of the equation when getting loans. The main focus should be on making sure everything in your credit report is accurate and as good as can be.

Credit scores are also weighed when you want to refinance a home loan or buy something on time. Some auto and home insurance companies will accept or reject you based on your credit score. Credit scores are fluid numbers that change as the elements in your credit report change.

Credit scores affect everything from rates on mortgages and car loans, to credit card terms and even whether you get a job. Lenders use them as an indication of how likely you are to repay a loan.

Bad credit can get you denied for basic services, such as electricity or a cell phone, if your credit report shows that you tend to pay late. Bad credit is typically associated with the inability to get new credit. Car loans, mortgages, and bank loans can be much more difficult to obtain with a problematic credit history.

Freezing your credit card or burying it in the backyard is such age-old advice, it’s practically a cliché. If your account goes dormant, the company may stop reporting it to the credit bureaus or they could shut it down completely.

FICO likes to see that you're still using credit, but doing so responsibly. FICO scores are the credit scores most lenders use to determine your credit risk. You have three FICO scores, one for each of the three credit bureaus: Experian, TransUnion, and Equifax. FICO scores range from 300-850, and most people score in the 600s and 700s (higher FICO scores are better). Lenders buy your FICO score from three national credit reporting agencies (also called credit bureaus): Equifax, Experian and TransUnion.

Each credit agency might give you a different score, so check with all three to get a good idea of exactly what your score is. Banks and other lenders check your FICO score when you apply for, and use credit. Knowing your score puts you one step ahead when you apply for a mortgage, loan or other credit. Banks, mortgage companies, apartment complexes, car dealerships, realtors, and even insurance companies can get your risk in a matter of a few seconds using the FICO score model that the bureaus use to determine your credit score. Your score is so prevalent these days.

Credit scores have proven over time to be a reliable indicator of whether or not a consumer would repay a loan. Credit scores allow lenders to quickly make on-the-spot credit decisions based on a 3-digit number that sums up your credit worthiness. There are many credit scoring models in use today; all are designed to rate your likelihood to repay your debts. Credit scores are derived from credit reports, so it is vital that you know everything you can about credit reports.

Credit scores typically range from about 300 to 850. Consumers with high credit scores are more likely to obtain lower interest rates and better terms on loans, including mortgages, and credit cards (higher credit scores can also result in lower insurance rates). Credit scores are available as an add-on feature of the report for a fee. Credit scores are being used for everything these days, including mortgages, credit cards, and insurance and even employment decisions. Your credit score can be the number one thing that causes a credit company to say "yes" or "no" to your credit application.

Credit scores help lenders assess risk more fairly because they are consistent and objective. Consumers also benefit from this method. Credit scores are calculated based on data in your credit reports and, as fluid numbers, change over time, sometimes on a daily basis! That's why it’s so important to stay on top of your credit reports for changes that could affect your credit scores. Credit score is only one part of the equation when getting loans. The main focus should be on making sure everything in your credit report is accurate and as good as can be.

Credit scores are also weighed when you want to refinance a home loan or buy something on time. Some auto and home insurance companies will accept or reject you based on your credit score. Credit scores are fluid numbers that change as the elements in your credit report change.

Credit scores affect everything from rates on mortgages and car loans, to credit card terms and even whether you get a job. Lenders use them as an indication of how likely you are to repay a loan.

Bad credit can get you denied for basic services, such as electricity or a cell phone, if your credit report shows that you tend to pay late. Bad credit is typically associated with the inability to get new credit. Car loans, mortgages, and bank loans can be much more difficult to obtain with a problematic credit history.

Freezing your credit card or burying it in the backyard is such age-old advice, it’s practically a cliché. If your account goes dormant, the company may stop reporting it to the credit bureaus or they could shut it down completely.

FICO likes to see that you're still using credit, but doing so responsibly. FICO scores are the credit scores most lenders use to determine your credit risk. You have three FICO scores, one for each of the three credit bureaus: Experian, TransUnion, and Equifax.

Each credit agency might give you a different score, so check with all three to get a good idea of exactly what your score is. Banks and other lenders check your FICO score when you apply for, and use credit. Knowing your score puts you one step ahead when you apply for a mortgage, loan or other credit. Banks, mortgage companies, apartment complexes, car dealerships, realtors, and even insurance companies can get your risk in a matter of a few seconds using the FICO score model that the bureaus use to determine your credit score. Your score is so prevalent these days.

Contact (by mail) the credit agency involved and DISPUTE the inquiry’s. Be sure to state the reason. Contact the collection agency and make payment arrangements with them. Once the account is settled, you can request them to remove the negative item from your credit report.

Free credit reports requested by phone or mail will be processed within 15 days of receiving your request. Free credit reports are available on request. Free FICO score, free 3 bureau credit report, and 3 bureau credit monitoring. Free annual credit report is an efficient document that helps a borrower to avail a loan. This can also helps you to maintain proper financial credit records. Free credit reports requested online are viewable immediately upon authentic.

Checking your credit reports will not hurt your credit score, so checking your report regularly is the best way to ensure you get the credit you deserve. Checking and keep track of your credit scores and history are the first step you can take to ensuring you have the highest credit scores possible.

Financial experts advise to check your credit report once a year for inaccuracies. Financial directors, credit managers and financial controllers can all benefit from quality data and accurate risk assessment. Each credit status report includes a sophisticated risk score which helps you identify risk and apply credit limits that manage that risk.

Lenders are free to use their own criteria for judging a credit score as either good or bad. Lenders like to see consumer debt obligations paid on a monthly basis. Lenders report on each account you have established with them. They report the type of account (bankcard, auto loan, mortgage, etc), the date you opened the account, your credit limit or loan amount, the account balance and your payment history.

Lenders, including banks, building societies and other financial service, lenders may also see the financial information relating to the associate. This allows lenders to view all the information that may be relevant to your credit application. Information about an association is held on record indefinitely.

Lenders are under a lot of pressure to lend responsibly so they look at how much credit you have access to, as well as how you have managed your accounts in the recent past. If they see you have several cards with money available they might say no when you next apply for your 0% card. Lenders want to share this 'historic' data now, but the DTI is in the process of deciding how this can be done legally.

Identity thieves may use your information to open a new credit card account in your name. Then, when they don’t pay the bills, the delinquent account is reported on your credit report. Identity Theft: You can detect the first signs of identity theft if you regularly check your credit report.

AnnualCreditReport.com, which was created by the three credit bureaus, is a centralized service for requesting your free annual credit reports. You can order all three credit reports at the same time, or order one now and others later. AnnualCreditReport.com is the ONLY authorized source to get your free annual credit report under federal law.

TransUnion and other credit bureaus store and maintain information on consumer credit and payment habits, inquiries and public records. Businesses that are members of TransUnion are able to obtain a copy of this information, if they have a legal permissible purpose or your consent, as applicable. TransUnion, Equifax and Experian all allow you to review your report online.

Otherwise, your dispute should be resolved in 30 days. However, your dispute response may be available prior to 30 days depending on the nature of the dispute and the response time from any creditors that are contacted.

Inquiries for a mortgage or auto loans are bundled within designated timeframes and treated as only one inquiry to your credit score calculation. Inquiries are classified as "hard" or "soft". Hard inquiries are "generated when you authorized a company listed to request a copy of your credit report".

Inquiries can add up, which is often interpreted as a negative by creditors. For this reason, too many inquiries can actually make getting credit more difficult. Inquiries for a mortgage or auto loans are bundled within designated timeframes and treated as only one inquiry to your credit score calculation.

Since you do not know which bureau a lender will use to base their approval decision, you should inspect your report from all three bureaus. Equifax offers a 3 in 1 report where you can view your credit report from all three bureaus in a single transaction. Since your credit score is important for obtaining credit you need to be aware of how good or bad your credit score is. It can give you crucial information like, how many payments have you defaulted on, your chances of getting new credit and whether you're a victim of identity theft. Since future creditors and lenders use your credit report to make decisions about you, there are some things you'd never want to show up on your report.

Ordering your credit report will help you catch new activity on accounts that you haven't been using, or may have closed. Ordering extra copies is possible for a small fee. Or, if you've been turned down for credit by a lender in the last 60 days, you are entitled to a free copy of your credit report.

Creditors determine whether to give you credit or a loan—and how much you will pay—based on information in your credit history. The national credit bureaus (now called consumer reporting companies) collect information from your creditors about how many credit cards and loans you have and how many accounts are late, overdue, or in collection. Creditors will view your credit report when you apply for a loan, mortgage or credit card. Employers may request your credit report prior to making decisions about your future.

Perhaps you paid a debt but the creditor failed to update their records. Perhaps they accidentally mistyped a piece of information somewhere in your past or perhaps they mistyped someone else's information but accidentally put it on your file. It happens a lot.

Accurate information, both positive and negative, cannot be removed from your credit report. In fact, most correct information stays on your credit report for seven years, and bankruptcies can stay on your credit report for up to 10 years. Most items will remain on file for 7 years although bankruptcies show for 10 years.

Request a copy of your file to ensure it is accurate. Requesting a credit report will NOT affect your credit. You have the right to look at your credit report without it affecting your credit or score.

Credit reports and credit scores influence our lives in many ways. Your history of credit management affects the cost of loans, your ability to rent or buy a home, the insurance rates you are offered, and even your future employment opportunities. Credit reports are also available on line.

Freezes allow you to lock up your records and select a secret code that only you know and can use to temporarily thaw your credit. So criminals won't be able to get credit in your name because they don't have your code. Free credit reports requested by phone or mail will be processed within 15 days of receiving your request.

Consumers can order their free annual credit reports by mail, by telephone, or online. To maximize your protection against fraudulent activity, order one report from a different company every fourth month. Consumers can also play an active role by obtaining free copies of their credit reports annually and checking them for accuracy. The existing FCRA standards that apply to furnishers regarding the accuracy of credit report information and the investigation of disputes provide meaningful protections for consumers.

Information concerning lawsuits or judgments against you can be retained in your file for seven years or until the statute of limitations expires, whichever is longer. Under Washington's law relating to judgments, a judgment can remain on your report for a ten-year period after it is entered. Information about your business accounts may appear on your personal credit report if you are a sole proprietor or if you use your Social Security number to apply for business credit cards, loans, and other trade lines. When your personal and business credit intermingles, you risk being denied for loans and other services because you can appear to be overextended.

Inquiries made in connection with pre-approved credit offers or those you make yourself do not result in a reduced score. Inquiries that do have an effect on the creditworthiness of a consumer (also known as "hard inquiries") are made by lenders when consumers are seeking credit or a loan, in connection with permissible purpose. Lenders, when granted a permissible purpose, as defined by the Fair Credit Reporting Act, can "pull" a consumer file for the purposes of extending credit to a consumer.

Since you have three different credit reports, you also have three different FICO scores. In fact, your bank might order all three scores. Since credit bureaus don't automatically check to make sure the information is right, checking for accuracy is up to you. Since there are more than 10,000 courthouses in America, a nationwide courthouse check of the applicant's criminal background record is not practical.

Monitoring your credit also helps you detect any identify theft attempts. Monitoring your credit is one of the easiest and most effective ways of protecting your credit against errors and fraud.

Creditors may also simply delete disputed information to avoid the cost and trouble of verifying its accuracy. Creditors determine whether to give you credit or a loan—and how much you will pay—based on information in your credit history. The national credit bureaus (now called consumer reporting companies) collect information from your creditors about how many credit cards and loans you have and how many accounts are late, overdue, or in collection.

Companies called consumer reporting agencies (CRAs) or credit bureaus compile and sell your credit report to businesses. Because businesses use this information to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA), it's important that the information in your report is complete and accurate. Companies report every time you apply or are approved for credit.

Experian also runs a family of free credit report sites, starting with FreeCreditReport.com and FreeCreditReports.com. Those sites include a prominent mention of AnnualCreditReport.com. Experian, for example, offers to sell consumers a peek at their credit score, and a service to prevent identity theft.

Understand consumer credit counseling and debt consolidation credit counseling. Use low-interest credit cards for bill consolidation for credit repair and avoid bankruptcy using proven, debt management techniques. Understanding credit rating score information requires understanding the two types of inquiries.

Debt settlement firms can negotiate to lower the principal amount of your debts, typically providing a faster path to debt freedom than credit counseling. Bankruptcy, an even more serious alternative, should be discussed with a bankruptcy attorney. Debt laws are made to protect you. But a good credit lawyer can’t hurt.

Identity thieves care about two things? Our sophisticated, real-time, early warning technology monitors various chat rooms across cyberspace for members? Identity theft is definitely a major crime about which still many people are not aware. Nowadays it has become must to have a credit monitoring updates along with say a free credit report.

Banks and credit card companies are screwing around with their customers’ accounts, credit scores and credit limits regardless if they are late or up-to-date or not to make themselves look good on paper. This practice makes the customers look bad. Bankruptcies and foreclosures can stay on your credit report for as many as 10 years and those are murder on your credit score. Banks are cutting limits in the face of a deteriorating economy. The worsening unemployment situation is causing banks to worry that even good customers could quickly become risky customers.

Problems such as duplicate accounts, underreported credit balances, accounts that are paid off but still showing a balance, and questionable charge-offs and collections are all very frequent. Make sure that you are aware of every probable problem so that you can address them all in your credit repair efforts. Problem is, though, they’re only a framework, just as the human skeleton is the framework for the body.

Check your address to make sure it is correct and compare the list of accounts to ensure that you have not missed any payments. The annual free credit report also contains a list of people or businesses that have requested credit information on you recently. Checking your score is necessary. Checking your credit once per year gives you an opportunity to make sure the information is accurate and up-to-date. Not only that, it helps you spot identity theft.

FICO scores are calculated different because credit bureaus and lenders use different formulas. Also the data might be different, such as when you have a car loan and the creditor does not report information to all the three credit bureaus. FICO scores vary between 300 to 850, any credit score that is higher than 720 on a combined 3 in 1 report is considered to be a good risk while any score that is below 600 is considered a bad risk.

As a general rule, if you can offer collateral, you’ll be rewarded with a lower interest rate. The collateral doesn’t have to be your house, it can be any other asset you own, that the bank feels comfortable enough about its value to hold it against your loan.
A Better Business Bureau, local consumer affairs office, or chamber of commerce can tell you if they have received any complaints about the company. This is in reality a benefit to you because you can dispute those mistakes and if they are not verified within a certain time period they must be completely removed from your report.

There are major credit bureaus in the country that develop credit reports and calculate credit scores. There are also a number of smaller credit bureau companies.

If you’re worried about identity theft then this could be a really great option for you to consider. This option will allow you to view any of the activity that might be happening to your credit report so you know what is happening at all times. The details contained in the credit report should be retrieved from the current credit history. A proper and strict analysis need to lead the way before any opinions, assumptions or conclusions are drawn about the subject person or institution.

If no one had credit score or credit reports, it would be impossible for a bank lender to decide who can and can’t be trusted with a loan. A credit report is a very detailed outline of your credit lines and your payment history, meaning how long you have had credit, how many lines of credit you have, and what your balances are on your current credit lines.

To keep up informed about financial news and matters can save you much money, since that you will be avoided to become a victim of financial mal practicing. If you looking seriously, there are so many sites that provided with many articles and news about financial or credit cards. Sometimes referred to as narrative text, narrative coding is the one-liner, plain English description that accompanies the account (or trade line) on your credit report. They’re not all negative; in fact, the vast majority of them are not negative. The new law will help new card owners but those of us who have 1 now are getting stuck before the new laws go into effect.

From the first quarter of 2008 to the 2009 first quarter, the number of new auto loans plunged 40.5 percent. Meanwhile, the average auto payment fell nearly 9 percent, to $361 from $395 a year ago. Finance companies have lower credit standards than Banks and Credit Unions; therefore the credit scoring models judges them differently. Having multiple Finance Company loans may eventually begin to drop the credit score.

In most cases, credit was bad when it is time to buy, what we can not do. In most cases, we can not take into account that the interests of stapled, after the payment on time. You will save more when you have a good credit score. Otherwise, they wouldn’t talk to me. I went and rented an apartment expecting to get booted out after a few months of not paying.

Each bureau may up sell consumers related products and services, such as credit scores or credit monitoring services, but consumers are not obliged to make any purchases to gain access to their credit reports.

A conventional lender might be hesitant to offer permanent financing on a house that’s under construction. There are three main credit report companies. Each one has marginally different methods and will offer slightly different credit reports.

You will find a lot of stories in the news every day about crimes that were committed by people with unchecked background history. Background research services have given a sense of security for employers and consumers alike. You should always consult an attorney licensed in your jurisdiction for answers to your specific legal questions and assistance with your unique legal problems. If you are married, you can double up by ordering a report for you and for your spouse - that’s six free credit reports per year - enough to order one every other month.

Additionally, the credit firms must - by hand - gather public data. Prone to errors and costly, this procedure is complicated. Employers often do background checks on applicants and get consumer reports during their employment. Some employers only want an applicant's or employee's credit payment records; others want driving records and criminal histories. Take note: background checks are always done at the initiative of the potential employer, not the applicant.

You’re looking to put a new roof or an extension onto your home, or maybe the kitchen needs a refurbish. It could be that you want to roll all your current bills into one lower payment, or have a chance to take that family cruise through the fjords of Norway at a great price - whatever the reason, you’re looking for cheap secured loans and finding yourself staring at page after page after page of adverts all promising cheap secured loans are just a click away - but every click just leads you to another page of adverts promising cheap secured loans. You would be amazed at how much some people obsess over their credit scores. I’ve seen Internet forums where people share their experiences regarding their scores, what their score was the last time they checked, etc.

Now, you already know the place for find your student credit card don’t you? There are a lot of so-called credit repair companies out there that claim to have tricks and loopholes to help you improve your credit history. But the vast majority of these companies are scam artists who charge upfront fees but offer nothing in the long run.

You’ll need to work on all three since various credit grantors use various bureaus. There are some pretty good resources online that will map out the process for you. Reliant on the fact that many of us forget to cancel subscriptions, they debit us every month and sometimes even twice per month. This is how many companies offering Free Credit Reports make their money out of us. Credit repair can be a slow process. You may want to contemplate doing it earlier rather than later so that you can decrease the effect it will have on any kind of job pursuit.

And in today’s difficult economic environment, you need every point you can get. In this article we’re going to find out exactly please sign up or login to see the rest of this page. You can’t get a credit card that will report to the credit bureaus that doesn’t do a credit check first. If you don’t have well enough credit to get a normal credit card you may end up with what’s called a secured credit card.

Thank you for taking your time to read this article. Your comments on this article will be highly appreciated. To access hundreds of Gurmit’s articles please visit http://gurmittoor.blogspot.com.

Information shared here does not constitute financial, legal, or other professional advice, and no attorney-client or confidential relationship is or should be formed by use of the site. This article is intended to provide general information only and does not give advice which relates to your specific individual circumstances. Information in this document is subject to change without notice. Any link-listing or ad-listing on this site does not constitute any type of endorsement.

Thank you for taking your time to read this article. Your comments on this article will be highly appreciated. To access hundreds of Gurmit’s articles please visit http://gurmittoor.blogspot.com.

Information shared here does not constitute financial, legal, or other professional advice, and no attorney-client or confidential relationship is or should be formed by use of the site. This article is intended to provide general information only and does not give advice which relates to your specific individual circumstances. Information in this document is subject to change without notice. Any link-listing or ad-listing on this site does not constitute any type of endorsement.

Gurmit loves travelling; he has been over 70 countries. He speaks fluent Cantonese, Polish, Hindi, Punjabi and English. Gurmit is an author, writer, insurance and mortgage expert. He frequently writes on various topics of interest to his readers. Gurmit Singh is a licensed mortgage expert with Dominion Lending Centres Mortgage Villa.

Gurmit Singh, mba
Mortgage Expert
M08009905
Dominion Lending Centres Mortgage Villa (11574)
Email:gurmit@gurmitsingh.ca
Website: http://www.gurmitsingh.ca