Lender Q&A
Posted in Loan Application on 06/29/2010 12:47 pm by
Archive for June 29th, 2010
Credit Repair Scam – How To Avoid Being A Statistic?
Posted in Finance on 06/29/2010 09:40 am by
Bill Smiths asked:
A good credit history is critically important for the consumer. A bad credit will prevent you from getting a business loan, owning a home, or even a job. Promises to “fix” your credit are always made by credit consolidation companies, but they are seldom true. Here are some of the important tips to avoid scams:
First things first. Negative information cannot be erased if the information is correct. Only inaccurate information can be corrected in your credit file. Credit file information remains on your record for seven good years from the time it is reported to the bureau. For bankruptcy, the information remains on your record for ten years. All the consolidated information about your credit bills you fell behind on, but are now paid, will remain on your report for the time period mentioned above.
Do not pay the credit repair company unless their promises are kept. Remember, the law is on your side. Federal law requires credit repair companies to give you a complete detailed explanation of your legal rights, a completely documented written contract, and above all, 3 days to cancel. This applies to all credit repair services including for-profit services, non-profit services, creditors and credit unions.
Be wary about emails you receive. When you hover your mouse over the link in the email, you will know for sure if it is a trusted website or a fraudelent one. If fraudelent, report it to your bank promptly.
You don’t need a counselor to correct your mistakes in the credit report. Take charge of it yourself. If you were recently denied credit, you can request a free credit report. Otherwise there is a small charge for it. Some states will allow you a free copy of your credit report once a year. It doesn’t cost you anything to dispute or question items in your credit report. Get online or follow instructions from your credit bureau. The three major credit bureaus are Equifax (800- 685-1111), Experian (800-682-7654) and Transunion (800-916-8800). In most cases you will need to contact all the three credit bureaus as the information they have about you may vary.
Remember that you can’t create a second credit file. Some of the fraudelent companies will offer to provide the consumers with a different social security number (tax identification number if ssn does not exist) in order to create a new credit file for the consumer. Such a practice is called as file segregation. File segregation is illegal and does not work.
Whereever possible, add explanation to your credit report to prove your point. If you have legitimate reasons for not paying certain bills on time (switching jobs, illness), or if you refused to pay because of a dispute, send the bureau a statement to be tagged with your credit report. Each lender who pulls your report will be aware why you fell behind on those bills.
Counseling might be a good option. Find a good non profit consumer credit counseling service in your neighbourhood. Get online or open your yellow pages to find one. Seek the guidance of friends and family members. Select a counselor, meet them in person to make sure they are right for you. Ask them on tips and advice on how to build a good credit history. If you are still lagging behind on your payments, credit consolidation firms will be able to set up a payment plan with your creditors. If money is an issue, select a non profit credit counseling service. They will offer their service for free or for a very low cost.
Clinton
A good credit history is critically important for the consumer. A bad credit will prevent you from getting a business loan, owning a home, or even a job. Promises to “fix” your credit are always made by credit consolidation companies, but they are seldom true. Here are some of the important tips to avoid scams:
First things first. Negative information cannot be erased if the information is correct. Only inaccurate information can be corrected in your credit file. Credit file information remains on your record for seven good years from the time it is reported to the bureau. For bankruptcy, the information remains on your record for ten years. All the consolidated information about your credit bills you fell behind on, but are now paid, will remain on your report for the time period mentioned above.
Do not pay the credit repair company unless their promises are kept. Remember, the law is on your side. Federal law requires credit repair companies to give you a complete detailed explanation of your legal rights, a completely documented written contract, and above all, 3 days to cancel. This applies to all credit repair services including for-profit services, non-profit services, creditors and credit unions.
Be wary about emails you receive. When you hover your mouse over the link in the email, you will know for sure if it is a trusted website or a fraudelent one. If fraudelent, report it to your bank promptly.
You don’t need a counselor to correct your mistakes in the credit report. Take charge of it yourself. If you were recently denied credit, you can request a free credit report. Otherwise there is a small charge for it. Some states will allow you a free copy of your credit report once a year. It doesn’t cost you anything to dispute or question items in your credit report. Get online or follow instructions from your credit bureau. The three major credit bureaus are Equifax (800- 685-1111), Experian (800-682-7654) and Transunion (800-916-8800). In most cases you will need to contact all the three credit bureaus as the information they have about you may vary.
Remember that you can’t create a second credit file. Some of the fraudelent companies will offer to provide the consumers with a different social security number (tax identification number if ssn does not exist) in order to create a new credit file for the consumer. Such a practice is called as file segregation. File segregation is illegal and does not work.
Whereever possible, add explanation to your credit report to prove your point. If you have legitimate reasons for not paying certain bills on time (switching jobs, illness), or if you refused to pay because of a dispute, send the bureau a statement to be tagged with your credit report. Each lender who pulls your report will be aware why you fell behind on those bills.
Counseling might be a good option. Find a good non profit consumer credit counseling service in your neighbourhood. Get online or open your yellow pages to find one. Seek the guidance of friends and family members. Select a counselor, meet them in person to make sure they are right for you. Ask them on tips and advice on how to build a good credit history. If you are still lagging behind on your payments, credit consolidation firms will be able to set up a payment plan with your creditors. If money is an issue, select a non profit credit counseling service. They will offer their service for free or for a very low cost.
Clinton
Understanding Your Credit Score and How it Was Determined
Posted in Finance on 06/29/2010 09:30 am by
Francine Denson asked:
You probably already know that your credit history is kept in detailed records by three major credit bureaus. What you may not know is that in addition to all of that data, each credit bureau also assigns you a number, known as a credit score. That credit score is one of the most important factors in whether or not you can get a loan and if so, how much you will pay in interest. This article aims to help you understand your credit score and how it affects your ability to qualify for loans and lines of credit.
In theory, your credit score can run anywhere from 300 – 850. The average American’s credit score is 692 and scores above 700 are good. Your score is calculated using a secret algorithm developed by Fair Issac Company, which is why the term credit score is nearly synonymous with FICO score.
The credit scoring system takes in to account many different factors of your financial history. The bulk of your score comes from your proven ability to pay bills on time. Late payments and failures to pay will seriously damage your scores. Next, the score considers your outstanding lines of credit and how much you still owe. Keeping low balances on credit cards is a good way to avoid loosing points for being overextended.
The length of time that you have had credit is also considered in your credit score. Young people with less of a credit history typically loose points in this area. It’s important to establish some credit as early as possible and to maintain that well to prove over time that you can be trusted with larger loans.
Lastly, your credit score considers the types of credit that you have. A credit card is not the same as an auto loan which is not the same as a mortgage loan. You gain points for having a good history of well managed larger loans.
In actuality, because there are three different credit bureaus each with their own database, you have three different credit scores. Typically a lender will take the one in the middle or an average of the three when determining whether you qualify for a loan.
Each lender uses their own guidelines, but here’s a standard break down of what your score means:
730+ – Excellent credit
700 – 729 – Good credit
670 – 699 – Average Credit
585 – 669 – Higher risk
Below 585 – Very High Risk
If you have average credit or above, you shouldn’t have any trouble getting a loan. Those with good and excellent credit will pay less in interest than those who have smaller scores. If you fall in to a high risk category, it is a good idea to consider seeking help to repair your credit as you may find it difficult and costly to get any type of loan.
Barry
You probably already know that your credit history is kept in detailed records by three major credit bureaus. What you may not know is that in addition to all of that data, each credit bureau also assigns you a number, known as a credit score. That credit score is one of the most important factors in whether or not you can get a loan and if so, how much you will pay in interest. This article aims to help you understand your credit score and how it affects your ability to qualify for loans and lines of credit.
In theory, your credit score can run anywhere from 300 – 850. The average American’s credit score is 692 and scores above 700 are good. Your score is calculated using a secret algorithm developed by Fair Issac Company, which is why the term credit score is nearly synonymous with FICO score.
The credit scoring system takes in to account many different factors of your financial history. The bulk of your score comes from your proven ability to pay bills on time. Late payments and failures to pay will seriously damage your scores. Next, the score considers your outstanding lines of credit and how much you still owe. Keeping low balances on credit cards is a good way to avoid loosing points for being overextended.
The length of time that you have had credit is also considered in your credit score. Young people with less of a credit history typically loose points in this area. It’s important to establish some credit as early as possible and to maintain that well to prove over time that you can be trusted with larger loans.
Lastly, your credit score considers the types of credit that you have. A credit card is not the same as an auto loan which is not the same as a mortgage loan. You gain points for having a good history of well managed larger loans.
In actuality, because there are three different credit bureaus each with their own database, you have three different credit scores. Typically a lender will take the one in the middle or an average of the three when determining whether you qualify for a loan.
Each lender uses their own guidelines, but here’s a standard break down of what your score means:
730+ – Excellent credit
700 – 729 – Good credit
670 – 699 – Average Credit
585 – 669 – Higher risk
Below 585 – Very High Risk
If you have average credit or above, you shouldn’t have any trouble getting a loan. Those with good and excellent credit will pay less in interest than those who have smaller scores. If you fall in to a high risk category, it is a good idea to consider seeking help to repair your credit as you may find it difficult and costly to get any type of loan.
Barry