Personal Finance, Loans & Insurance

Credit Scores and Credit Report

I recently logged on to annualcreditreport.com to get my once a year free credit report but to my surprise there were no credit scores. In case you didn’t know, everyone is entitled to their free credit report once every twelve months at http://www.annualcreditreport.com/. If you too have been there then you know that your credit report did not come with your credit scores. Just about everyone these days is looking at your credit so shouldn’t you know what they are? This magical three digit number is formulated to predict how you will pay your bills. Why should you know them?

When you make an application for credit your lender will use your credit or FICO to make a quick on the spot decision as to whether or not you will be approved. The actual credit history is important but the FICO makes it easier for the lender to reach a decision. Before you make application with a lender you should check your FICO score to see where you stand. You’ll go in knowing what your fico’s are before the lender does. If you have a good one, its advantage consumer. If it is low, then you’ll need to spend some time improving it before making a loan application.

While watching TV the other night I saw a commercial for Home and Auto insurance. The man on the commercial says he’s looking to put you with an insurance company that’s a little smarter than the one you’re with now. He goes on to say that some insurance companies base your premiums on your FICO score. “Isn’t that dumb?” he says. Well, it may be dumb but it’s a reality. Through years of experience and studying the claims history of millions of policy holders the data reveals that people with bad credit are more likely to file a claim than people with good credit. As a result, the better your credit the lower your insurance rates. You can even be denied insurance if your scores too low.

You may not know it but almost every employer is now obtaining FICO scores as part of the interviewing and hiring process. If you are currently out there looking for that better paying job better hope you have good credit. Your credit rating will give the potential employer an idea of what kind of person you are. Just like applying for credit, a lower score could mean higher risk. You could get passed up by another applicant just because of your credit rating.

I would say it is definitely time to know and get acquainted with all three of your credit scores. With credit markets tightening up it’s become more difficult to get credit unless you have a decent score. We’ve just discussed a few different scenarios that affect each and every one of us. What’s good?

720 or better is very good

680 average

620 marginal

580 poor

Reviewing Your Credit Report

The process for obtaining your credit report may sound a bit confusing, but the process is relatively quick and simple, especially if you’re obtaining free reports from the Annual Credit Report Request Service or purchasing reports from one of the three major credit reporting agencies.

After obtaining your reports, the next step is to review the information included within each of them. Make sure all of the information is up-to-date and accurate. If you notice errors in any of the three reports, it’s important to take the necessary steps to correct the error(s) as quickly as possible. If the error involves information provided by a creditor, begin by contacting the creditor directly. The creditor’s name and contact information should be listed on your credit report. If you’re unable to correct the error or initiate a dispute directly with the creditor, contact the credit reporting agency that provided the report with the incorrect information.

If you notice errors in the personal information section of your credit report, such as the spelling of your name, your date of birth, or address, contact the appropriate credit reporting agency directly to correct these errors.

Errors in your credit report can be disputed online, by calling the credit reporting agencies, or in writing. For the quickest response, dispute errors online. Visit each credit reporting agency’s web site and follow the appropriate links.

Make sure you stand up to them. Make sure they know you know what your talking about so they correct the problem.

Easy Bad Credit Report Repair

Usually it’s about the time that someone needs to buy a new car or is about to purchase their first home that they realize that they are going to need to do a little bad credit report repair. While it can be quite costly to hire a professional to help you get your credit rating back on track quickly, there is hope for people who are the more do-it-yourself type and want to save some money.

Bad credit report repair can be done on your own if you have the time and some organizational skills. It is not difficult work to fix your credit, it is just a matter of understanding exactly what makes up your credit score, identifying the problem areas, and then workings swiftly to resolve those issues. All of this can easily be done on your own, without the help of an expensive professional.

The first thing that you need to do is order a copy of your credit report from each of the three credit bureaus, Experian, Equifax and Trans Union. You can order a copy from each of the three agencies for free every 12 months, and it only takes a minute. Just go to the Annual Credit Report website, enter in your contact information, and you’ll instantly have an electronic copy of your report, which you can save to your hard drive and print out. Just be sure to visit the official Free Credit Report website, as there are many other that suggest you can receive a free report, but only if you sign up for a trial of their monthly credit monitoring service. The official site, however, has no strings attached.

Once you have downloaded your report, print if off and take out two different color pens or highlighters. You are looking for two things that you want to distinguish from each other. The first thing you are looking for is errors on your report. One in four credit documents include misinformation, so chances are you will find some. The other thing you are looking for, which you want to highlight in a different color, is the accurate information that is negatively affecting your credit score. Each report will be slightly different, so thoroughly and carefully look at each document.

Once you have done that, the next in your bad credit report repair plan is to remove the false information and eliminate the negative information. To do this, make two columns on a sheet of paper that that are labeled, “misinformation” and “negative information.” List your items in the appropriate column, but rank them in terms of their greatest impact on your credit score. For example, if you have a bankruptcy on your credit report that did not occur and a typo in your employer’s address, you want to list the bankruptcy first since having that removed will have the greatest impact on your credit score.

Once you have your items ranked in the proper order, you will have an idea of where you need to focus your energy to improve your credit score the fastest. When disputing items on your credit report, you don’t want to do them all at once. Just take care of the biggest problems first in order to get the most cooperation from the credit bureaus and getting them to act fast.