Personal Credit

by Michael Herman,
www.working-at-home-ideas-and-information.com

Originally published at www.click-partners.com

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The FICO score is a summary of your credit history. In other words, it's a financial history of your life . That score impacts a surprising cross-section of life, in fact it impacts many things you knew about. Such as

• Lenders use it to evaluate your eligibility for mortgages.

• Landlords use it to gauge the likelihood you'll pay the rent.

• Car dealers utilize it in arrange financing for you.

• Credit cards are, or aren't, given to you because of it.


Now, for some things you may not have been aware of,

• Insurance companies may base your premium on it.

• Potential employers often use it to assess your character and they may base there hiring decisions on it.

The FICO score reflects hundreds of parameters in one's financial history.

• Score 700-850 - smooth loan process; best interest rates

• Score 550-699 –medium risk; higher interest rates

• Score 300-549 –sorry, no loans or credit cards

These hundred of variables are included in the calculation of your credit score, but I only mentioned the bigger ones here. Just paying your bills on time, as important as that is, may not rescue you from other credit pitfalls. Bills, mortgages, your monthly rent, credit cards, long overdue or overlooked, can show up as a blotch on your credit.

• A cable, or credit card bill, that didn't make it to your new address, or you mail them your payment, but it gets lost in the mail. It may be the store, credit card company, or post offices the error,....... but it is YOUR credit that gets hurt .

• The amount of unpaid credit cards, even if they're never late. The more you owe the less credit worthy you are.

• The amount of credit you already have. It's not always the More, the Merrier .

• The kinds of credit cards you have, some are good believe it or not. Visa, MC, AMEX, Discover, etc. are considered good credit; others may affect your credit negatively. Such as credit extended to you at a store, or the mall when you go out and buy appliances, etc. Cancel and make sure you get rid of the bad credit as quickly as you can.

• Unpaid medical services.

• Collections. The amount may, or may not, matter.

• The important thing to know is that credit scores aren't an exact science and these are only some of the variables.

It's often not one of these items, which spell disaster for your credit; it's having a combination of these. One of these things, if they appear on your credit report, may or may not hurt too much , but it is the Credit Bureaus and the Institution extending credit to you, who decide how it affects you and your credit.

Be an active guardian of your credit. Before you consider buying a home or car, refinancing or remodeling, or other major credit purchases, send for a copy of your credit report and score, or go to one of the free credit report web sites.

Identity theft is also becoming more and more of a problem. I've personally seen how damaging it can be, both with a sibling and clients, who had their identities stolen and had credit cards opened in their names. Cost my client about six months of waiting time and during that time, rates went up, ouch. You want to see in advance exactly what the lender will see. Lenders may be able to help you fix problems, but don't count on it.

Generally, preventing these problems yourself, or fixing them before you speak with a lender is best. Since it can take 30-90 days to resolve disputes and inaccuracies and …

… Take care of your credit first... then go shopping!

The first step would be to see your credit report, or as lenders say, run your credit . Those who run your credit, lender's, etc., run what is called a Tri-Merged Credit Report. As the term implies, it is the merging of the reports from the three big credit bureaus, Equifax, TransUnion and Experian. Tri-Merged reports are $30-$40. They are very important for you to see, because any company that runs your credit is going to run a tri-merged report on you. Don't you want to know exactly what they will see?

Each credit bureau, Equifax, TransUnion and Experian, collect their information independently of each other. For that reason certain bureaus may have different information than the others. It is often very similar, however, I have personally seen very different reports between the bureaus on occasions.

Unfortunately, I've been unable to find a free tri-merged report, but here is a FREE report provided by Experian.

Clicking on the link below will send you directly to this web site. Once you have it, print it out then hit the back button so that you get back to this article and I'll go over the credit report you run, in the following article, so that it make sense to you.

Here is a FREE report from Experian.

Now that you've run your credit I'll show you how to read it so that you know what all those phrases mean.

• Personal Profile – contains the spelling of your name, correct addresses and so on. Should be correct, because it's based on your social security #, but look it over just to be sure.

• Credit Summary - provides a summary of your credit, present and past.

• Credit Inquiries - shows you those who run your credit in the past two years.

• Account History - The Important Part! Shows the credit you have and have had in the past. Each area is the creditor and it will show you the account name, account number, the account type, status, monthly payment, date opened, balance, terms, high balance in the last two years, credit limit, past due, remarks and payment status.

Credit you've had in the past two years will appear on this. If it's a closed account, but the report shows it as open, you'll want to contact the creditor and make sure the account is closed. Even if you asked before, they may not have closed the account.

Areas to be concerned about are:

• Make sure such accounts are really yours. Look at each account and see if it looks correct, date open, balance, etc.

• Accounts reported as late or derogatory. Were you really late on that account? If you don't think you were late, you should contact that creditor and the agency to have the item investigated.

• Other negative items, such as Collection Accounts or negative Public Records, make sure these items are accurate.

If you find other discrepancies on the report, especially accounts, which aren't yours, you'll want to contact the creditor and get more information. It may have only been put on your report by mistake. Be safe though and call the creditor. You may want to call Experian at 888 397-3742. You'll want to start with the creditor first, but if the creditor is unhelpful go ahead and contact Experian directly.

If you are at the point that you need to talk with a debt counselor, I have found a group that will provide you with an initial 30 minutes of FREE debt consultation

Are you looking for a loan to purchase a house, get a refinance, debt consolidation, or any reason? Have a look at E-Loan . Rates for all types of loans are at historic lows. They make decisions in minutes and will also help you with repairing your credit if necessary.

Based on the Fair Credit Reporting Act, sections 612 (b), (c), and (d), you have the right to a free credit report from Credit Report Agencies if (paraphrased) you:

• are the recipient of an adverse action (for example, denial of credit) due to information contained in the Consumer Report;

• are unemployed;

• are a recipient of public welfare assistance;

• have inaccuracies in your Consumer Report due to fraud

The Fair Credit Act
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Michael is a CPA and a Mortgage Broker / Consultant. Michael has recently developed www.working-at-home-ideas-and-information.com for those looking for information enabling them to work at home.