Consumer Credit Reports – equifax experian score

Hunter Stuart asked:




Misinformation and half-truths abound in discussions about credit reporting and scoring. People have so many different ideas about what is true when it comes to dealing with their credit that regardless of the question you ask, you are liable to get a wide variety of conflicting information.

At the end of the day, all this ignorance about the credit system does nothing but help the lenders and other financial institutions who use your credit information. If people simply knew a little more about their credit, they would be able to take steps to improve their credit. By improving their credit, people could avoid having to pay the high interest rates that pad the lenders profits.

What follows are some of the myths people believe to be true about the consumer credit system. By distancing yourself from these defeatist fallacies, you can open yourself up to learning the truth about your credit and what you can do to manage it.

1) The Myth: The big three credit bureaus (Equifax, Experian, and Trans Union) are official agencies tasked with maintaining your credit reports.

The Truth: These three companies are just that, for-profit companies. The big three credit bureaus are businesses who make money by collecting consumers financial information and then selling it to creditors, marketers, employers, and even back to you I the form of your credit reports.

2) The Myth: There law states that your creditors must report late payments, collections, charged off accounts, etc. to the credit bureaus. Once these items are added to your credit reports, they must remain on your reports for 7 years.

The Truth: The Fair Credit Reporting Act (FCRA) does not require anything to be reported to the credit bureaus. In addition, the FCRA does not list a minimum amount of time that reported items must be listed on you credit reports. It only requires that listings remain on your credit reports for no more than 7 years for most items. The truth is that your creditors can remove items from your credit reports at any time.

3) The Myth: There is nothing you can legally do to repair your credit.

The Truth: There is a wide variety of things you can do to add positive credit to and remove bad credit from your credit reports. Every law that applies to the credit bureaus is written to protect you. By taking advantage of their rights under these laws, people have forced the credit bureaus to permanently delete millions of negative items from their credit reports. For every person that claims that it is impossible to remove bad credit from your credit reports, there is another person who has already done it.

4) The Myth: It is impossible to remove accurate information from your credit reports.

The Truth: Actually, this myth is correct, but not in the way most people think. When the FTC talks about removing accurate information from your credit reports, they are using the word “accurate” in the legal sense as defined by numerous credit laws and legal decisions. To help get a better understanding of what their version of “accurate” means, it helps to know what is considered inaccurate. According to the law, inaccurate credit listings also include listings that are untimely, misleading, biased, incomplete, and unverifiable.

So yes, it is impossible to remove “accurate” negative information form your credit reports, but many of the things you think may be accurate right now you will know are actually misleading, biased, unverifiable, etc. once you learn more about the consumer credit laws.

5) The Myth: It doesn’t matter if something gets removed from your credit reports, it will just come back.

The Truth: While it is possible for a deleted item to reappear on your credit reports, it is rare. The FCRA makes it more difficult from the credit bureaus to re-report an item to help protect you from having to continually dispute the same items over and over again.

6) The Myth: It is illegal for anyone to repair your credit for you.

The Truth: You have the right to enlist the help of a credit repair professional if you so choose. In fact, U.S. District Court Judge, J. Wexler said about credit repair companies that “since allowing third parties to assist consumers will likely lead to the expedited correction of credit reports, it will further the purposes of the [fair credit reporting] acts.”

7) The Myth: There is no reason to use a credit repair company because you can repair your own credit for free.

The Truth: While people point out that you can save money by repairing your own credit, they rarely mention the other costs associated with repairing your own credit reports. Aside from the material costs of mailing certified letters (a practice that is recommended by most credit repair experts), many people also have to spend a significant amount of time learning about the various credit laws, learning the tactics for writing effective dispute letters, dealing with credit bureau stall letters and information requests, and other tasks associated with managing the credit repair process.

When considering all the costs involved with repairing their own credit, many people find that it is more than worth the money to have someone else repair their credit for them.

The Myth: Repairing your own credit is easy.

The Truth: For a few people, repairing their credit is easy. Most people find out that the opposite is true. Remember that lenders want to keep your credit score low and the credit bureaus do not want to deal with you because there is no money in it. The law may be on your side, but these organizations are not and they will work to make the credit repair process difficult. People may say that all you have to do is write a dispute letter and send it to the credit bureaus. But what do you do when this doesn’t work for you? At that point, the real work of credit repair begins.

To illustrate the difficulty of repairing your own credit, consider that, according to a survey of over 2,000 Lexington Law credit repair clients, almost 40% had attempted to repair their credit on their own before enlisting the help of the firm.

Kimberly

Ann Born asked:




You have an abundance of alternatives when looking for an absolutely free credit report, no trial. Within the United States, Americans have the ability to receive one absolutely free credit report, no trial from each of the three major reporting companies, yearly. Equifax, TransUnion, and Experian all provide you one free credit report on a yearly basis. The only requirement from you is that you contact any one of them and request your absolutely free credit report, no trial.

You will be required to provide them with proof of identification and current address. This is a necessary step to prove that you are the person shown on the credit report. After you have requested the absolutely free credit report, no trial, you will find your credit report sitting in your mailbox in as little as two weeks. If you are not willing to write these companies to request your free credit report, you can contact them by telephone as well. Depending upon the company you are going with, you may be able to find your credit rating right over the phone. However, you will still need to provide them with some identifying information.

Receiving an absolutely free credit report, no trial, is suitable for most people. There is really no reason you need to have constant review of your credit report. It does not generally change overnight, unless you have many different credit issues to deal with. The internet provides you with a multitude of methods in obtaining a free credit report; however, this will not be an absolutely free credit report, no trial. You will be required to provide credit card information and have to go through a 30-day free trial. There is no reason to risk your money or information online, when you can get a yearly, absolutely free credit report, no trial.

Ricardo

Young Chea asked:


So I just obtained my credit report and checked my credit score through Experian. I am a little confused.

First off, my report said that 10 of my 11 credit items are in good standing so I was very happy about that. The one that wasn’t was b/c I stupidly cancelled a credit card when I was younger and didn’t know any better.

I am confused b/c I paid $6 to get my actual credit score and it is a 799 out of 990. As I understand the different credit houses have different ways of calculating your score so I know it’s all subjective. However, I am concerned b/c it said I am in the “Prime” credit category and not Prime Plus or Super Prime which I thought I might be. The next thing is my credit rating ranks higher than only 61% of US consumers.

I don’t have any real debt, only student loans, no car loans, no mortgage. Can someone break down my score for me?

Joyce

Thomas Boston asked:




Checking your credit score is an extremely important step for any consumer. To make sure you have a full line of credit available, and to make sure you’re not the victim of identity theft, you should check your credit score consistently to make sure everything is order. The problem for many consumers when checking their credit score, or trying to improve it, is that they have questions and can’t find the specific details that would answer those questions.

There are so many websites online offering information on credit that the sheer mass can be overwhelming, making it even harder to get the specific answers that you’re looking for. Here are seven common questions that consumers ask in regards to their credit score and how credit reporting is done, and the answers to each that you’ve been searching for.

7 common consumer questions on credit reporting:

Q: Doesn’t bankruptcy damage you so badly that it never makes sense?
A: This is a tricky question that depends on situation. If you are in debt way over your heard, have tons of overdue bills, have collections on you for bills you can’t pay anyway, and are completely incapable of even making minimum payments, then you’re credit score is probably so bad that declaring bankruptcy won’t change things much. You should avoid bankruptcy at all costs, but if your situation is that bad, then the sooner you get it over with, the sooner you can start rebuilding.

Q: Is there ever any advantage to bankruptcy on a credit report?
A: Maybe, but bankruptcy is never a good thing. However, a bank looking at one potential borrower with a bankruptcy six years ago, but a good record since, will look better than a non bankrupt borrower who has a record of late or unpaid bills from the past couple years.

Q: My credit score is terrible, can it be fixed?
A: Yes, but with the caveat being that the time frame varies. If you just finished bankruptcy, forget about having a decent credit score at any point over the next year or even two. But just because you have late payments on your record for seven years, or bankruptcy for ten, doesn’t mean that you can’t recover during those times. Every month that passes by with you in good standing helps a little bit more, and by paying all bills on time (with a little extra where applicable), recovery can take place relatively quickly.

Q: How can I fix my credit score?
A: This is one of those questions that entire books have been written on. But in summary: pay every bill on time, with a little bit extra on credit cards (if possible), pay off all overdue bills so they don’t become even more delinquent, pay off collections and make sure they report that to the credit agencies, and don’t fall behind on any new payments and don’t wrack up any new credit card bills.

Q: How can I start rebuilding my credit when I can’t get a loan?
A: The easiest way is to start with secured credit cards. These are cards where to have a $200 limit, you have to pay $200 into an account. These cards tend to not be very good deals, but they do allow you to slowly rebuild your credit until you’re in good enough shape to upgrade.

Q: What about those “credit fix” people on TV?
A: In a word: Don’t. Many of these are scams or questionable, at best. Any legitimate mistakes on your credit report can be removed by yourself, and many of the tricks tried by these places can get you into trouble, or even prevent you in the future from using legitimate tools to fix your credit score. Learn how credit scoring works, and use that information to fix things yourself.

Q: So my credit’s going to be terrible for the next 7 years?
A: Not at all. The more months of paying all your bills on time (and a little extra, when applicable), the better your score will get. I had a friend who had a major 6 month late black mark on a credit card bill that went to creditors, but three years letter his credit score was already up to 720, which is excellent. So depending on the level of damage, you can fix your score relatively quickly.

Juanita

Rick Munster asked:




Credit counseling organizations do not lower your credit score when you approach them for assistance in creating a budget that you can work with. Credit counseling is designed by nature to assist each individual in a way that is unique to a person’s particular situation. A credit counseling plan that may work for you will most likely not be the best credit counseling plan for the next person.

With each credit counseling plan being different it would be unfair to affect an individuals plan based off of their desires to get help with their financial situation. Many individuals who approach credit counseling find that they are not in need of joining a credit counseling repayment plan due to the advisor assisting them creating a plan for the individual to repay their debts with some adjustments to their spending habits or state of income. It is not a credit counseling organizations job to place you on their program. It is their job to ensure that you receive the best care and receive the best advice for your particular situation. While not all credit counseling sessions have an end result of the consumer enrolling on a debt repayment plan inevitably some will. This lead to the question; Does a debt repayment plan affect an individuals credit worthiness.

Once a credit counseling organization recommends that you enter into a debt repayment plan there will be no affect to your credit score. This is thanks to Fair, Isaac which designed the FICO credit scoring system. Spokesman Craig Watts states “Statistically, it does show a higher propensity to go bad on a credit obligation sometime in the future, we decided it was in everybody’s best interest if we had it changed so that people can go into credit counseling without worries about what it might do to their credit score.”

Credit counseling is different from credit repair, and debt settlement. There are no statements that support that these services will not affect your credit in a negative fashion.
Credit counseling may be noted on your credit report by your individual creditors. The notation simply states that the consumer has entered a debt repayment plan. This notation does not affect your credit score.

Reginald

Scott Swinford asked:




If you saw an ad in the newspaper for a FREE CAR to the next 20 people who arrived at a particular car lot, would you go? I would! In fact, most people would probably be out the door before they read the fine print that said you must purchase a key for $28,000 to get the car for free. I can just imagine the riot at the dealership when the salespersons pointed that out to the mob in the sales lot.

Now apply that to your credit report.

With the sheer number of identity theft victims (many who are not aware of it yet) and the chance for mistakes in your credit file (Wall Street Journal estimates that 79% of all credit files have errors), it is in the consumer’s best interest to check their credit report on a regular basis and correct errors if and when they appear. I believe that this should be done every 6 months minimum and certainly before making a major purchase such as a car or a home.

The free credit resource that I recommend to my family, friends and clients is annualcreditreport (full contact information is below). This site is monitored by the FTC and created by the three nationwide consumer credit reporting companies to allow everyone to have access to their credit report. You are given access to your report after answering a series of questions to verify your identity. They do not give you your scores for free, but you are allowed to purchase them from the site if you wish.

I tell my clients that they can purchase the scores if they wish, but the numbers that they are given may or may not (usually not) correspond to the scores that a mortgage lender would see. They are also different that what a car dealer would see and different than what your insurance agent would see. Add in the fact that some of the companies are using the new Vantage system while others are not and this whole ordeal can leave you very confused.

Back to my original question: how much does a free credit report cost? While the report may be given to you at no cost, it is usually under the condition that you sign up for some type of credit monitoring service. Although I will not plug any particular companies, I pay about $15 a month to have my reports “monitored”. I get an email when there is an inquiry on my report, if there are significant changes to it such as large balance changes or anything negative, and I get one once a month telling me that there were no changes. On top of that, I can run a new credit report on myself EVERY DAY if I wish and it will not hurt my scores like an inquiry from a credit card company, car dealer or mortgage lender might. If you decide to try one of the monitoring companies, they will usually let you cancel within the first 30 days without charge if you are not satisfied. Check their terms and conditions to be sure.

The downfall of annualcreditreport.com is that you are only able to pull one report from each of the three bureaus (Trans Union, Experian, and Equifax) every 12 months (in accordance with the Fair and Accurate Credit Transactions Act). For someone who just wants to check their report infrequently, they could get one report every 4 months and be safer than if they had done nothing. For some, it is worth a small financial outlay every month to have the protection that the other companies offer. It’s really up to the individual.

That’s all on Free Credit Reports. I will be releasing future articles on what to look for on your report, how to dispute issues that you may find and how to improve your scores, among other topics.

Here is how to get your free credit report:

Online: annualcreditreport.com

Phone: 1-877-322-8228

Mail: Print, complete and send the request form (found online at annualcreditreport.com) to

Annual Credit Report Request Service

PO Box 105281

Atlanta, GA 30348-5281

Melissa

Chane Steiner asked:




In order to clear your record of a negative rating, you must first check the credit report for any inaccuracy or see if it has been verified by the credit company. You may be surprised how often information in your credit report has not passed through careful scrutiny and how much of it is erroneous. Only when proven inaccurate or unverifiable can you remove a negative credit rating from your report.

According to a study conducted by the U.S Public Interest Research Group in June 2004, 79% of the consumer credit reports that they have surveyed had some kind of error or mistake. Up to 25% were serious enough to warrant rejection of credit application or increased interest rates.

The credit bureaus that do the credit reports are companies that collect information about consumers, and provide the report to people who are willing to pay for the information. All consumers are entitled to 1 free report yearly, but must pay for any additional reports that they may require.

Fortunately, the Fair Credit Reporting Act gives consumers a chance to correct any information about their account that might be inaccurate. It is up to the creditor or the credit bureaus to prove otherwise. A dispute letter has to be sent to the credit bureau. Upon receipt of the dispute letter, the credit bureau is given 30 days to verify that their information is 100% correct. If not, they must correct or update their data. Otherwise, they must remove it from their file. In so doing, the consumer is cleared of the negative credit rating.

This is just one of the ways on how to remove a negative credit rating. You could also try sending debt validation letters to debt collectors or pay for delete letters to creditors. The best method though, is to send the dispute letter. Although most credit bureaus do not investigate credit accounts since they just check their e-Oscar system, if no action has been done after 30 days of receipt of your letter, just keep sending those dispute letters until they do take notice and you get your desired results.

Katherine

Amy Pedersen asked:




A consumer’s application is taken and scored separately by their individual credit history. Credit report final scores are reflective of many differing factors in your financial history and current status. Generally, credit-scoring systems determine whether someone is creditworthy using analytical tools and statistics to produce results and insight into the future dealings with a particular consumer. Each scoring system is unique and usually based on the particular needs of the financial institution or creditor. Some credit scoring systems award fewer points for example to people who have attained a certain age, such as late thirties or forties, with the thought that the older generation often has a relatively higher amount of debt.

While the law still permits these creditors to award points to age groups, they are required to use properly designed scoring systems when doing so and people who have reached the age of 65 or older must receive the maximum number of points in this situation. Your age can help or hurt your credit score based on your current financial status compared to others of your age group.Most credit scoring systems consider a lot more factors than just the few named above. Sometimes your score can be based on as many as 15 or 25 different factors that relate to your credit past and present and financial status currently. All of the different factors that are taken into account simply predict your credit worthiness and help the lender to predict your future re-payment habits.Watch which questions you are asked on your credit application to try and determine which factors are used to determine your credit score.

Every credit application varies due to the nature of the scoring system and the type of information needed to make their statistical guesses. Each of the questions you see on the application has a purpose, consider your answers carefully. The creditor or lender is trying to determine what type of financial borrower you will be once they give their money to you.While there are rules and acts put into force and designed to help the consumer, scoring systems are known for using such unique factors such as the type or year of car you drive to be a factor in determining your credit score. As long as they do not illegally discriminate on race, sex, martial status, national origin, religion, or age, they are allowed to use whatever category of factor they wish to figure your score.

Lawrence