Ian Webber asked:
A Measure of Credit Repair Progress
If you are planning to start a credit repair effort you might want to establish a benchmark for your progress; some objective means of marking the results of your efforts. Your credit scores are the logical way to measure your improvement. But getting your credit scores is not as simple as it seems. If you attempt to buy your scores online you are likely to encounter a dizzying array of options, many of which make little sense. It turns out that there is not just a single score, nor are there only three, one for each credit bureau. The crazy reality of the credit score market is far less clear. Are you ready to explore the world of credit scores?
It Starts With the Credit Bureaus
In brief, the three credit bureaus maintain credit data on consumers. Credit scores are based on this credit bureau data. Lenders base their lending decisions on a score called the FICO score. Lenders purchase these FICO scores from the credit bureaus, but the credit bureaus do not own the FICO scoring software, they license its use from Fair Isaac Corp, the creator of the FICO model.
One Score Three Names
The credit bureaus rebrand the FICO scores they sell to lenders. Experian calls their FICO score the Experian/Fair Isaac Risk Model, Equifax calls theirs the BEACON score, and TransUnion calls it an EMPIRICA score. All of these scores utilize the FICO software. The reason that there are differences in your three FICO scores is because creditors do not all report to all three bureaus. In addition, there are timing differences in the release and processing of data between the creditors and the credit bureaus; if you pay off a credit card Experian may update your balance in three weeks, Equifax in five weeks and TransUnion in eight. In addition, Fair Isaac updates their software from time to time, and the credit bureaus do not all adopt the new release simultaneously.
The Plot Thickens
So far we have described the relationship between the credit bureaus, Fair Isaac, and lenders. Unfortunately, there is more to the story. In a perfect world if you wanted your scores for credit repair or other purposes you would just purchase them from the credit bureaus. You would then know exactly what a lender will see when they make a decision on your loan application. But the credit bureaus have decided not to sell FICO scores to consumers. Instead, with the exception of Equifax, who sells a genuine FICO score, they have created their own credit scores and sell them to consumers. These bureau scores have little numeric resemblance to a FICO score, often differing by over 100 points. This is completely useless for credit repair, and not only because of the numeric difference, they also behave differently; you can’t optimize your FICO score by optimizing a bureau score.
Ignorance is Not Bliss
If this leaves you wondering why anyone would spend good money on a credit score that has no resemblance to the score that a lender will see, I’m sorry to say that the reason is that the millions of people that buy these scores do not know. And the reason they don’t know is that the disclosures provided by the credit bureaus are almost impossible to find. It is a fact that if Experian and TransUnion were to put their disclosures in plain English, in plain sight, no one would buy their scores.
Your Credit Repair Problem
But let’s go back to our little problem. You are getting your credit repair project rolling. Where can you get your real FICO scores? Prior to February 13, 2009 you could go to MyFICO.com, the Fair Isaac website and purchase all three FICO scores. But as of February 13th Experian has declined to let Fair Isaac sell the Experian FICO score. This has raised a cry of concern from many consumer advocates, but the fact still remains. At the time of this writing you can only purchase your Equifax and TransUnion FICO scores.
The Solution
Work with what you have. Get your two FICO scores. If you want all three scores to benchmark your credit repair results the only option now available to you is to get them through a lender. This may not be as hard as it sounds. If you plan to get a mortgage in the near future you might contact a mortgage broker. They will run your credit as part of the pre-qualification process, and if you ask, they might give you a copy of your report which will show all three scores. Good luck!
Copyright © 2009 Ian Webber. All Content. All Rights Reserved.
MCMILLIAN
Comments Off
Michael.t.brian asked:
Regardless the size and nature of business everywhere, you need a financial back up to run it smoothly. Availing external helps is an easy way to come over such problems but your chances can be stiffer when you carry a bad credit profile there. Since, a number of people this sub- standard situation that can arise even due natural factors, help provisions have been devised even for such conditions. You can go for small business loans bad credit that finances your small business purposes easily and omit the hurdle of bad credit there.
You can go for Small Business Loans Bad Credit with any kind of your personal circumstance. The secured and unsecured both the forms are available here to enable you get the help either by putting collateral or without it. The secured form is backed by either the business asset itself or else while, the unsecured form is collateral free and is obtained showing a sound financial profile.
You can fulfill any kind of your business needs with this loan facility that help you carry out a number of expenses such as purchasing of necessary equipments, acquisition of office premises, buying raw materials, or even to payoff any kind of debts attached with the business.
A bad credit small business loan can be availed in the condition of every kind of bad credit condition. Whether you have CCJ, IVA, arrear, default, bankruptcy or late payment problem, it won’t hinder you in availing a bad credit small business loan.
You can find rate of interest slightly higher, as it is offered escaping your bad credit profile. But there are some ways to make the interest rate economic. Incase a businessman opts for the secured option, he can avail the loan at an affordable interest rate, as in this option, loan amount is secured on borrowers’ property. In addition, using a high valuable property can provide borrowers some extra edge in lowering down the interest rate. The unsecured option can also be availed at a better interest rate and for that you need to make some research.
OTT
Comments Off
Erick R asked:
Hello, I am trying to find out how to build my business credit without being attached to my personal credit score. I would like to know if anybody has information regarding what credit cards are available to do this. I would love any free information or links to sites that can tell me how to build my business credit. Thanks!!
BATTS
Wittenhaque asked:
Credit help is a legal process used by both people in debt and their creditors to negotiate a settlement of an existing legal debt. Any person owing any type of debt has the legal right to negotiate with the creditors, however this practice takes time to master and certain skills to get the maximum benefits.
Credit Help can be done with correct negotiation with creditors, and is best done by hiring an experienced third party. Rather than trying to contact the creditors personally and do it yourself, hire an expert like New Life Financial.
Credit help companies correspond with creditors on your behalf and assist by establishing a monthly saving goal to raise money for the settlement of the debts.
Credit Help is offered with New Life Financial. New Life Financials’ Credit help program reduces your current unsecured debt balances 40-60% by arbitrating a settlement with your creditors.
Our Credit help program lessens the struggle and gives a plan to pay the debts.
How does this work? You will set aside, in a special account, a certain amount of funds every month that will go towards your accounts in the Program. Once you have accumulated enough settlement funds, we will finalize the negotiation with the creditors. You approve the Credit Help amount. Each person’s situation is different and negotiations with creditors will take place at different times depending on the particular creditor and the amount of the debt. One at a time, each of your debts will be paid at a huge discount.
How do you get started?
When you call, we will consult you in regards to your financial situation and will determine your eligibility for Our Credit Help program.
The goal of Our Credit help Program is to lower your debt.
Not only do we negotiate the amount you owe to the creditors, but, we also negotiate what is reported on you credit reports. We are very successful at this.
Credit Help has the lightest impact on your Credit Score and a closed, paid off account increases your credit score.
The only solution is Credit Help. Ethical, moral and aggressive use of your rights as a consumer.
We won’t charge you upfront fees. All costs will be disclosed.
Our Credit help Program offers the best way to reduce your debt and will quickly eliminate it.
For more information about Credit help, call at 888 746 1907 or go to: http://www. NewLifeFinancial.org
PENNY
Comments Off
Carey Snow asked:
Your credit score is calculated by using mathematical formulas that analyze your creditworthiness. The formulas consider the amount and types of debt you owe and then analyze and compare your repayment history with thousands of other consumers to determine your credit score.
Credit scores are designed to measure the risk of default by taking into account various factors in a person’s financial history. Although the exact formulas for calculating credit scores are closely guarded secrets by each of the three credit bureaus, the Fair Isaac Corporation has disclosed the components and the approximate weighted contribution of each component.
The factor that has the biggest impact on your score, approximately 35% of your score, is whether you’ve paid past credit accounts on time. However, an overall good credit picture can outweigh a few late payments which will continue to have less impact over time unless the late payment is a mortgage payment.
About 30% of your score is determined on the amount you currently owe lenders. Having credit accounts and owing money doesn’t mean you’re a high-risk borrower. But owing a lot of money on many accounts could mean you are financially overextended and may be more likely to make late payments or none at all. Part of the science of calculating a credit score is determining how much debt is too much for a given credit profile.
A longer credit history will increase your score. The length of your credit history makes up about 15% of your credit score. However, a high score is achievable with a short credit history if the rest of your credit report indicates responsible credit management.
Recent applications for, or newly opened, credit accounts will weigh against the rest of your credit history. This factor makes up about 10% of your score. FICO scores will distinguish between a search for a single loan and a search for many lines of credit, in part by the length of time over which inquiries occur. If you’re seeking a loan, do your rate shopping within a focused period of time, such as 30 days, to avoid lowering your credit score.
Several minor factors also can influence your score. About 10% of your score is acquired from these factors. For example, having a mix of credit types on your credit report – credit cards, installment loans such as a mortgage or auto loan, and personal lines of credit – is normal for people with longer credit histories and can slightly improve their scores.
It’s unlikely that each credit agency would give the same score to the same person since each agency collects their information from different creditors. Even when they collect from the same creditors, they update their records at different times. To get a more accurate picture, lenders pull FICO scores from all three agencies and then base their lending decisions on the middle of the three scores.
As you can see, calculating your credit score is not an exact science but these weighted factors will provide you with a good sense of what impacts your score. It’s important to always monitor your credit score and determine what you can do to maintain a high score. Look for future articles that will help you achieve and maintain a high credit score! For more information about your credit score, check out this site http://GetMoreCreditScore.com/info2.
THOMAS
Comments Off
Jeff Walding asked:
Simply because your credit has hit rock bottom doesn’t mean you can’t get credit help. Expensive lawyers are unnecessary people to turn to when you need help solving credit issues. Most times people that have bad credit will not get credit cards or loans. Subprime cards are often available to those with bad credit, but you can bet that the interest on these cards with gradually drain you, making your credit worse.
Typically, the subprime credit card lenders charge high fees to setup your account and the interest rates are much higher than ordinary cards. Lower credit lines are offered and the fees are required of you upfront. The amount you pay goes to the lenders who deposit it into an account. When you pay your credit card bills ahead, the positive results does not show on your credit reports, since this is never reported by the credit card lenders.
Qualified services offering credit help can assist you with solving credit problems. Spending time finding high interest credit cards will get you nowhere. The Internet can direct you to credit agencies that have highly trained workers to help you manage credit and money effectively. They often offer help with getting your reports and monitoring your credit score. You can learn how to read credit card statements and find counseling available through the online services.
You can get out of debt by taking some action. You can work on your own to solve the problems by learning effective ways to manage money. You will need to call the lenders you owe. Ask them to assist you with setting up a payment plan that works for you. Often they will wave interest and penalty fees if you are showing effort to pay off your debt.
If you elect to address your credit problems, then set up a working plan and budget to manage your money. Consider that when you payoff one bill that is one less bill you have to worry about. Pay one bill off and then work to pay off another bill. When you pay off your bills, you will feel immensely relieved.
Solving credit problems takes a lot of time. If you feel uncomfortable, handling your own credit problems, credit help is available. Be sure to look for legal companies that offer credit help without charging you a fortune.Some of the credit companies online are out to make things worse for you rather than help you find a way out of debt. They charge unreasonable fees to customers who need help with getting out of debt. It pays to search for credit agencies that do not charge high fees rather focus on the ones that want to help you. The fees you pay to credit agencies can be used to pay bills.
Credit services can help however, but it takes you to investigate the different services available online. Stay away from the companies that charge sizeable fees. The easiest way to find a good credit service online that offers credit help is to do some background searching on the companies you are interested in.
Things do not have to be difficult. Finding credit agencies from researching resources online makes it easier to locate information about different companies that offer credit help. Learn what you can about the company’s history.
GILLEY
Comments Off
shabookie asked:
I am 17 years old, still in highschool, and plan on moving out of my house in May 2007. Before I move I want to make sure that I have some form of credit. Does anyone know any way to go about that, any tips/advice would be greatly appreciated.
I have a 2nd hand car paid for directly in hard earned cash, no bank loans or anything, so a car is not an option.
RAND
nickolasname asked:
I have a tremendous amount of bad debt. Almost 2000 dollars. If I were to pay it all off to 0 would it raise my score or just keep it from getting lower? I have no intention to EVER EVER EVER have another credit card. my credit score is in the low 500s what will happen if I pay off all debt and do nothing to raise my score?
MONTAGUE
Kelli Smith asked:
Student loans can help you develop and build your credit score. Employers may review consumer credit scores as part of their hiring process. You can optimize educational and career opportunities by building and maintaining a solid payment history.
A credit score indicates how consumers handle debt. Understanding how credit scoring works is useful for making decisions about student educational loans and other credit that can potentially impact your education and career goals. The Fair Isaac Corporation developed its credit scoring (also known as FICO scoring) system based on weighting five aspects of a consumer’s credit history to achieve a score between 300 and 850.
How is my FICO Score Computed?
35% = Payment history: This category includes payment information on retail accounts, auto loans, mortgages, revolving credit, installment debt, and student loans. Delinquencies, repossessions, bankruptcies, wage garnishments, and liens are included. Public filings such as legal judgments can also show up and negatively impact your score, even if paid. Negative items on your payment history can lower your credit score for 7 to 10 years!
30% = Amounts owed: This category includes how much you owe and the percentage of available credit used for revolving accounts. A good way to improve your credit score is to avoid running up large balances or using more than 30% of your available credit.
15% = Length of credit history. The average consumer has approximately 14 years of credit history, but this isn’t necessarily true for students or those who’ve recently started careers. Repaying student loans on time provides a solid foundation for establishing a good credit score.
10% = New credit: Credit scores reflect new credit activity. Opening too many accounts too quickly can drop your credit score. It’s important to understand the difference between opening new credit accounts and credit inquiries; for example, if a potential lender or employer makes an inquiry it impacts your credit score less than applying for several credit cards in a short period of time.
10% = Types of Credit Used: The types of credit you have influences your credit score. Financial expert Suze Orman categorizes student loans as “good debt,” like mortgages or auto loans, but advises against opening and carrying balances on multiple credit cards. College students may be tempted to use credit cards as a financial “bridge” until payday, but this can result in accumulating excessive debt.
Student Loans: The Gateway to Your Future
As the cost of undergraduate, graduate, and professional education continues to increase, students are taking advantage of low cost federal student loans. According to the Project on Student Debt and the College Board’s Center for Economic and Policy Research, approximately two-thirds of recent graduates carry student loan debt and over the past decade, student debt levels have more than doubled.
These figures suggest that many students start their careers with significant debt before they’ve had a chance to build a solid credit score. As public academic institutions continue to face budget cutbacks and tuition increases, students may have to rely more heavily on student loans and credit cards to get by; this can have negative consequences for students’ credit scores and may even delay or divert career plans.
Career Transitions and Your Credit Score
If you’re considering a mid-life career change, a good credit score can help you obtain financing for the transition to a new career. It’s important to weigh short and long term financial goals when considering taking on student loan debt. Consulting a financial advisor can help establish a plan to fund your career transition while protecting your credit score.
Consolidate Student Loans
Traditionally, the interest rates for federal student loans are low–between 5% and 7.22%. Students can include multiple student educational loans that have different or variable interest rates into one consolidation loan with a fixed interest rate and single payment. The interest rate for consolidation loans is based on a weighted average of the interest rates of the different loans included in the consolidation.
Federal student loan interest rates are adjusted on July 1 and, on July 1, 2008, are expected to decrease significantly. Consolidating student loans fixes your interest rate and can help you avoid late or missed payments caused by managing multiple student loans; you may want to wait until after this year’s interest rate adjustment, however, to make an informed decision whether or not to consolidate.
When Should I Consolidate My Student Loans?
Students often consolidate loans during the grace period immediately following graduation, but it’s also possible to consolidate while you’re still in school. This may get you a lower rate on your consolidation loan but be aware that some loan cancellation or other specific loan benefits could be lost if you consolidate before you graduate or during your grace period.
Understanding Student Loan Debt
Unfortunately, it can be tempting to borrow more than you need for educational expenses. And it’s easy to forget that unlike grants and scholarships, student loans must be repaid, which can cause financial problems and damage your credit before you even have a chance to establish a good credit history. Late payments and collection activity on student loans leads to low credit scores–especially if, like many students, you have a short or limited credit history. A low credit score can limit the availability of some student loans and other types of credit including mortgage loans. And borrowing more than you need may affect your plans long after you’ve graduated–a 2006 Money Magazine article describes how some college grads are delaying buying a home or starting a family while they repay large student loan balances.
The Connection between Your Credit Score and Career
A spotty credit history can not only make it hard for you to get approved for loans, it could even ruin your career plans. Low credit scores can limit access to business loans and prospective employers often conduct background checks that include verifying your credit score. When you interview for jobs you may be asked to sign an authorization that allows prospective employers to check your background. Employers in the financial and retail industries and professions such as accounting and law typically use background checks as part of the hiring process, and a low credit score is a valid reason to deny employment.
Careful use of student loans can provide for your education and help avoid unnecessary debt. Managing student loan debt through prompt repayment and possibly consolidation can help establish a good credit score. Your education and credit score can open doors to your new career, and later, help you get financing for expanding a business, starting a company, or investing for your future.
GARRISON
Comments Off
Kate asked:
I have a full time job and can pay for mortgage – but my credit is bad and I have no money. my goal is too get my son out of the ghetto – please help.
MAXEY
