Making Sense of a Credit Report
Fixing Errors on Your Credit
Credit Bureaus
The Collections Agency
Making Sense of a Credit Report
Reading credit reports can be very confusing. "R" refers to a revolving account, "I" refers to an individual account, and "M" refers to a maker on the account. “Y” refers to a collection account. This rating is supplied by the creditor, and determines how they perceive you as a borrower. There are only two ratings that are not negative.
A rating of "1" means that the account is current and a rating of "0" means that they don't have enough history with you to rate you.
0
Too new to rate
1 Current account
2 30 days late
3 60 days late
4 90 days late
5 120 + days late
6 150 + days late
7 Included in a re-payment plan such as chapter 13 bankruptcy
8 REPOSSESSION/FORECLOSURE
9 CHARGE-OFF/COLLECTION
Every other rating, "2" through "9" is negative. The creditor usually looks at the late pays or other notations such as "charge off" or "collections." However, any rating but a "1" or "0" indicates that you have problems with the account.
Anatomy of a Credit Report
A credit report is basically divided into four sections: identifying information, credit history, public records, and inquiries.
Identifying information is just that -- information to identify you. Look at it closely to make sure it's accurate. It's not unusual for there to be two or three spellings of your name or more than one Social Security number. That's usually because someone reported the information that way. The variations will stay on your credit report.
Other information might include your current and previous addresses, your date of birth, telephone numbers, driver's license numbers, your employer and your spouse's name.
The next section is your credit history. Sometimes, the individual accounts are called trade lines.
Each account will include the name of the creditor and the account number, which may be scrambled for security purposes. You may have more than one account from a creditor. Many creditors have more than one kind of account, or if you move, they transfer your account to a new location and assign a new number. The entry will also include:
* When you opened the account
* The kind of credit (installment, such as a mortgage or car loan, or revolving, such as a department store credit card)
* Whether the account is in your name alone or with another person
* Total amount of the loan, high credit limit or highest balance on the card
* How much you still owe
* Fixed monthly payments or minimum monthly amount
* Status of the account (open, inactive, closed, paid, etc.)
* How well you've paid the account
On Experian's report, your payment history is written in plain English -- never pays late, typically pays 30 days late, etc. Other comments might include internal collection and charged off or default.
Charged off means the creditor has given up efforts to collect and written it off.
It doesn't list arrests and criminal activities; just financial-related data, such as bankruptcies, judgments and tax liens. Those are the monsters that will trash your credit faster than anything else.
The final section is the inquiries. That's a list of everyone who asked to see your credit report.
Inquiries are divided into two sections. "Hard" inquiries are ones you initiate by filling out a credit application or taking your child to the orthodontist. "Soft" inquiries are from companies that want to send out promotional information to a pre-qualified group or current creditors who are monitoring your account.
You may have heard that a large number of inquiries can have a negative impact on your credit score, but you're probably OK.
For instance, the model has a buffer period that ignores inquiries within 30 days of getting a mortgage or a car loan. It also counts two or more "hard" inquiries in the same 14-day period as just one inquiry.
If you find a mistake on your credit report -- an account that isn't yours or a disputed amount -- you'll need to fill out the form that comes with the report, or follow the instructions on the explanatory sheet.
The process takes time because the creditors have 30 days to respond to a charge of a discrepancy. As long as a charge is in dispute, that dispute will show up on your report. Long-time lenders say it's common for reports to have errors. Some estimate that as many as 79 percent of all credit reports have some kind of misinformation.
Have questions? We have answers! Contact the professionals at Innovative Credit Consultants today by phone at 800-666-6050 (967-2673) or email at info@icreditinc.com.
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Fixing Errors on Your Credit
You have the right, under the Fair Credit Reporting Act (FCRA), to dispute the completeness and accuracy of information in your credit file.
When a credit reporting agency receives a dispute, it must reinvestigate and record the current status of the disputed items within a "reasonable period of time," unless it believes the dispute is "frivolous or irrelevant." If the credit reporting agency cannot verify a disputed item, it must delete it. If your report contains erroneous information, the credit reporting agency must correct it. If an item is incomplete, the credit reporting agency must complete it.
For example, if your file shows that you were late in making payments on accounts, but fails to show that you are no longer delinquent, the credit reporting agency must show that your payments are now current. If your file shows an account that belongs to another person, the credit reporting agency would have to delete it. Also, at your request, the credit reporting agency must send a notice of correction to any report recipient who has checked your file in the past six months.
For items in your credit profile that you feel deserve further explanation (such as an account that was paid late due to the loss of job, military call up, or unexpected medical bills), you can send a brief statement to the appropriate credit reporting agency. The information will be placed in your credit profile and will be disclosed each time it is accessed. Thus getting you on the right road to clean credit.
Have questions? We have answers! Contact the professionals at Innovative Credit Consultants today by phone at 800-666-6050 (967-2673) or email at info@icreditinc.com.
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Credit Bureaus
Your credit bureau reports can have a dramatic impact on your financial stability. Studies have shown 79% of ALL records reported by the three national credit bureaus contain serious errors or negatives that don't belong, and that can harm your credit rating or score. A bad credit bureau report limits your ability to purchase a home or automobile, insurance or other necessities. A bad credit bureau report can even limit your employment options. A bad credit bureau report may cause you to be turned down for, or adversely affect the terms of loans, rental housing, or credit cards and will certainly keep you from achieving clean credit.
Often the result of simple human error, credit bureau reports can be caused by anything from a clerical error to a computer glitch in which your credit bureau file is mixed with that of someone with a similar name. That's why it's essential that you check all your credit bureau files - and monitor your credit bureau report regularly - to protect your good standing, even if you always pay all your bills on time.
If your credit bureau report is less than perfect now, checking your credit report will help you identify problems so you can deal with them effectively and move on toward an improved credit standing. Whatever your situation, reviewing your credit bureau reports regularly is the only way to be sure that you will go into any credit conversations with the confidence of knowing everything the interviewer will know.
Fixing your credit bureau reports could save you thousands of dollars every year by making you eligible for better loans and lower payments. While repairing your credit bureau reports can be a do-it-yourself project, it is time consuming and tedious. Innovative Credit Consultants specializes in credit repair, restoration and education.
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The Collections Agency
Even if you have paid off your debts and done everything a collections agency has asked of you, your credit reports could still be labeling you in default.
At Innovative Credit Consultants, we help thousands of people just like you legally improve their credit scores. Getting started with us is the first step to becoming one of them.
Many inaccurate or misleading collection accounts unfairly lower thousands of people's credit scores. Either because of clerical errors, miscommunication, or even outright vengeful tactics by some collections agencies, collections accounts are among the most common errors on credit reports.
The Dreaded Creditor Calls…
Dealing with collections agencies is already difficult...
credit reporting errors make it even worse.
This same scenario has happened time and time again. A creditor calls you and claims you have an overdue debt and begins reporting you to the credit bureaus. They then sell your account to a collections agency who may begin doing the very same thing. And then they start contacting you a few times every week
...and that is where the problems begin.
Maybe the creditor continues reporting to the credit bureaus or maybe you make an arrangement to pay off the creditor directly but the collections agency still hammers away at your credit reports.
Or even worse, maybe you never owed the debt in the first place and now either the creditor, the collections agency, or both are causing havoc on your credit score.
"My experience with Innovative Credit Consultants has been wonderful from start to finish and the results you achieved are remarkable. It is also noteworthy, that the fee I paid for such superior professional service must be one of the truly great bargains of all time."
–Alan T., Innovative Credit Consultants client
We will help you with your collections problems.* Innovative Credit Consultants has the experience to aggressively and intelligently attack multiple aspects of your collections problems. Our services are not limited to credit bureau disputes. We will also contact creditors and the collection agencies on your behalf. Through goodwill negotiations and by leveraging your rights under the Fair Debt Collection P0ractices Act (FDCPA, Innovative Credit Consultants will work with collections agencies to get them to stop reporting your accounts.
Not only do we work to remove the incorrect collections accounts from your credit reports, we'll put forth the extra effort so they do not return.
* Please note that we do not transfer or collect money or otherwise provide financial assistance to clients.
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Credit Report - How to Correct Errors and Improve Your Credit Score
By Peter Fisher
The people who compile your personal credit report are human just like you and me and they can make mistakes while compiling your reports from the various sources they use.
So to correct errors and improve your credit score, requesting a copy of your report frequently can be very important. Although this will cost a small fee, it will allow you to know what they have compiled about you. If you discover unfavorable information, you can ask for corrections before they start disseminating inaccurate information about you.
When you get a copy of your personal credit report to determine the status of your credit file, study the information carefully and attempt to remove all incorrect information in it. As all your credit history may not be contained in one file from one firm, if possible get the files from other firms too. Some information may be duplicated, or not included at all in the other file.
To correct errors and improve your credit score, you need to check your full name, social security number, current and previous addresses, spouse's name, and date of birth and make sure that they are all correct because they are some of the points used in identifying you. Also, make sure that any merchants' names, credit account numbers, date opened, date closed, high credit limit, highest amount of credit used, and repayment history are correct, current and accurate.
If after studying the file carefully you spot any errors, write out the exact error and the way you think it should be listed. You will find a space on the right-hand side of your report where you may challenge any item in your report that you feel is wrong or incorrect. You will have to attach photocopies along with pertinent information as proof of your claim and send it to bureau or credit reference agency by mail. When they get your message they will investigate and send you the results of their findings. Be patient, because it may take the agency some time to complete their investigation.
The fact that not just one agency may compile information about you may make it almost impossible for you not to encounter problems in future. When you apply for credit in a bank, in stores or any with a lending company you may be turned down. This does not mean the agency you filed error corrections with haven't made the changes, it's more likely that the bank or store you are trying to deal with have another report from a different agency about you.
So anytime that you are denied credit, you have the right to know why you were turned down! If the bank or stores used a credit report agency, they must provide you with the name and address of the agency that supplied them with the report.
Once you have the contact information of the agency involved, you should make an immediate effort to contact the credit agency, so that you can review your credit report, find out any information that is causing you to be denied credit, and make corrections if you have enough evidence to back up your claims. Otherwise how can you correct errors and improve your credit score?
Peter Fisher is an expert Author and webmaster for ebookdownloads.biz where you can find tons of resources to help with credit repair any time of day or night.
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Credit Checks
By: Debbie Dragon
Before the world was introduced to a glorified fish tank full of egotistical housemates, George Orwell described a rather more disturbing phenomenon in his book Nineteen Eighty-Four. The now ominous term "Big Brother" was used to describe an omnipotent being that watched, analyzed and controlled every aspect of Oceania.
Indeed, while the producers of the popular TV show might not have the same tyrannical motives as the Original Big Brother, the concept of a controlled environment is still very much alive today. Many people would agree that surveillance and an increased interest in the everyday activities of the population is a good thing for our national security. But, how about when credit card companies start to play the role of Big Brother?
The results of a new study into the psychographic profiling techniques used by the major credit companies will be revealed on May 22nd, 2010. Rightly or wrongly it is believed by many experts that credit card companies are closely monitoring their customers' spending habits and adjusting certain customer's terms in light of their results. Credit companies are not only tracking the amounts you spend on your cards but where and how you are using them to determine how credit worthy you are. Plastic spending at a casino/ betting establishment, a second-hand clothes store or using a credit card for bail bond services are all likely to draw negative attention to your account.
Is Credit Monitoring OK? Pros and Cons
While the state of modern society isn't quite the totalitarian dystopia that Orwell described there is undoubtedly the feeling that our privacy is under constant attack. Surprisingly it is the government who have stepped into to protect our privacy. The new study, due in 2010, will assess whether credit companies have indeed been tracking our spending habits and basing your credit status based on the data collected. Credit is a business though and all industries need to protect themselves, which is why there is some justification to this kind of practice. Indeed, how would the companies catch the high-risk clients if not?
Are they taking it too far though and should these institutions not be able to have so much control over our personal lives?
Pros of Closer Surveillance
High-risk consumers = higher interest rates and fees. As with many things in life it is often the minority that have the power to spoil it for the majority and the credit industry is no different. A small percentage of suicidal spenders are a financial liability to credit companies and the only way to offset the risk they generate is to increases prices. By closely monitoring each client and building up a detailed profile based on that person is one of the most effective ways to protect the companies and the majority of their clients who are responsible borrowers.
Cons of Closer Surveillance
By tracking every transaction you make the credit card companies effectively have a complete personality profile of you on record. Every transaction, whether it's buying a coffee every morning or spending money at the convenience store, says something about you and by tallying all this information together the companies can potentially draw up a pretty accurate portrait of your life. This might be acceptable for government organizations wishing to protect our liberty but for a private company intending to sell us a product for profit it is slightly more concerning. This type of tracking can lead to some people being unfairly discriminated against just because of where they regularly shop or worse the information could be used to pressure/persuade vulnerable clients into taking certain offers which they can't immediately afford.
There are obviously positives and negatives on both sides and coming to a realistic compromise will be difficult. For many customers who have good borrowing habits none of this should be a problem but it pays to be wary about how and where you chose to use your credit card. One too many "inappropriate" or "questionable" transactions could send your credit rating downwards and affect your long-term credit future. Ultimately though, if you can show you're a reliable customer who respects their spending, you shouldn't have to worry whether Big Brother is watching you or not.
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Credit Rating
Your credit rating is a type of "report card" that is maintained by credit bureaus or credit reporting agencies as they are commonly called. These credit reporting agencies collect loan balance and payment information from lenders who have agreed to report your financial performance.
Your credit rating reflects how much debt you are carrying and how well or poorly you keep up with you payment obligations. Lenders use the information that makes up your credit rating to determine whether or not they will extend you credit or approve a loan.
In order to make the decision process as easy as possible for lenders, credit reporting agencies use a score known as the FICO Score to determine your credit risk and the likelihood that you will repay your debt.
It has become increasingly more common for employers, insurance companies and landlords to also depend upon your FICO score when making a determination about whether or not they are willing to hire you, issue insurance to you, or rent you a home or apartment. That's why it is so important for you to maintain good credit rating in today's economy where computers make decisions about you without humans even being involved.
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