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Showing posts with label Credit Reports. Show all posts
Showing posts with label Credit Reports. Show all posts
Thursday, July 31, 2014
Tuesday, July 15, 2014
10 Things You Need To Know About Your Credit Report
Your Credit Report
Q: What is a credit report?
A: A credit report is a record of your credit history that includes information about:
- Your identity. Your name, address, full or partial Social Security number, date of birth, and possibly employment information.
- Your existing credit. Information about credit that you have, such as your credit card accounts, mortgages, car loans, and student loans. It may also include the terms of your credit, how much you owe your creditors, and your history of making payments.
- Your public record. Information about any court judgments against you, any tax liens against your property, or whether you have filed for bankruptcy.
- Inquiries about you. A list of companies or persons who recently requested a copy of your report.
Q: Why is a credit report important?
A: Your credit report is important because lenders, insurers, employers, and others may obtain your credit report from credit bureaus to assess how you manage financial responsibilities. For example:
- Lenders may use your credit report information to decide whether you can get a loan and the terms you get for a loan (for example, the interest rate they will charge you).
- Insurance companies may use the information to decide whether you can get insurance and to set the rates you will pay.
- Employers may use your credit report, if you give them permission to do so, to decide whether to hire you.
- Telephone and utility companies may use information in your credit report to decide whether to provide services to you.
- Landlords may use the information to determine whether to rent an apartment to you.
Q: Who collects and reports credit information about me?
A: There are three major credit bureaus--Equifax, Experian, and TransUnion--that gather and maintain the information about you that is included in your credit report. The credit bureaus then provide this information in the form of a credit report to companies or persons that request it, such as lenders from whom you are seeking credit.
Q: Where do credit bureaus get their information?
A: Credit bureaus get information from your creditors, such as a bank, credit card issuer, or auto finance company. They also get information about you from public records, such as property or court records. Each credit bureau gets its information from different sources, so the information in one credit bureau's report may not be the same as the information in another credit bureau's report.
Q: How can I get a free copy of my credit report?
A: You can get one free credit report every twelve months from each of the nationwide credit bureaus--Equifax, Experian, and TransUnion--by
- visiting www.annualcreditreport.com
or
- calling (877) 322-8228.
You will need to provide certain information to access your report, such as your name, address, Social Security number, and date of birth.
You can order one, two, or all three reports at the same time, or you can request these reports at various times throughout the year. The option you choose will depend on the goal of your review. A report generated by one of the three major credit bureaus may not contain all of the information pertaining to your credit history. Therefore, if you want a complete view of your credit record at a particular moment, you should examine your report from each bureau at the same time. However, if you wish to detect errors and monitor changes in your credit profile over time, you may wish to review a single credit report every four months.
Q: Who else is allowed to see my credit report?
A: Because credit reports contain sensitive personal information, access to them is limited. Credit bureaus can provide credit reports only to
- lenders from whom you are seeking credit;
- lenders that have granted you credit;
- telephone, cell phone, and utility companies that may provide services to you;
- your employer or prospective employer, but only if you agree;
- insurance companies that have issued or may issue an insurance policy for you;
- government agencies reviewing your financial status for government benefits; and
- anyone else with a legitimate business need for the information, such as a potential landlord or a bank at which you are opening a checking account.
Credit bureaus also furnish reports if required by court orders or federal grand jury subpoenas. Upon your written request, they will also issue your report to a third party.
Q: Does the credit bureau decide whether to grant me credit?
A: No, credit bureaus do not make credit decisions. They provide credit reports to lenders who decide whether to grant you credit.
Q: How long does negative information, such as late payments, stay on my credit report?
A: Generally, negative credit information stays on your credit report for seven years. If you have filed for personal bankruptcy, that fact stays on your report for ten years. Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Information about criminal convictions may stay on your credit report indefinitely.
Q: What can I do if I am denied credit, insurance, or employment because of something in my credit report? What can I do if I receive less favorable credit terms than other consumers because of something in my credit report?
A: If you are denied credit, insurance, or employment--or some other adverse action is taken against you, such as lowering your credit limit on credit card account--because of information in your credit report, the lender, insurance company, or employer must notify you and provide you with the name, address, and phone number of the credit bureau that provided the credit report used to make the decision. You can get a free credit report from this credit bureau if you request it within sixty days after receiving the notice. This free report is in addition to your annual free report.
In addition, lenders may use a credit report to set the terms of credit they offer you. If a lender offers you terms less favorable (for example, a higher rate) than the terms offered to consumers with better credit histories based on the information in your credit report, the lender may give you a notice with information about the credit bureau that provided the credit report used to make the decision. Again, you can get a free credit report (in addition to your annual free report) from this credit bureau if you request it within sixty days after receiving the notice.
If you receive one of these notices, it's a good idea to get your free credit report and review the information in it right away. If you think your credit report contains inaccurate or incomplete information, follow the steps in Credit Report Errors below, to try to resolve the issue. For tips on how to improve your chances of being granted credit, or to improve your chances of receiving credit on better terms, read the Federal Reserve's 5 Tips: Improving Your Credit Score.
Q: I've been receiving unsolicited credit offers. Why? Can I opt-out of receiving these offers?
A: Credit bureaus may sell consumers' information, including names, addresses, and credit information, to creditors or insurers, who may then offer credit or insurance to you. You can have your name and address removed from these lists by opting-out of the listing. This will reduce the number of unsolicited offers you receive.
To opt-out, call 888-5-OPTOUT (888-567-8688) or visit www.optoutprescreen.com . You will need to provide certain information in order to opt-out, such as your name, address, Social Security number, and date of birth.
. You will need to provide certain information in order to opt-out, such as your name, address, Social Security number, and date of birth.
You have the ability to opt-out of receiving offers either for five years or permanently. If you want to opt-out permanently, you will need to fill-out, sign, and mail-in a form. The form is available by either calling the toll-free number or visiting the website.
You can reverse your opt-out decision at any time to start receiving offers of credit and insurance again by calling the toll-free phone number or visiting the website.
What is Credit?
Credit is borrowed money that you can use to purchase goods and services when you need them. You get credit from a credit grantor, whom you agree to pay back the amount you spent, plus applicable finance charges, at an agreed-upon time.
There are four types of credit:
1. Revolving credit. With revolving credit, you are given a maximum credit limit, and you can make charges up to that limit. Each month, you carry a balance (or revolve the debt) and make a payment. Most credit cards are a form of revolving credit.
2. Charge cards. While they often look like revolving credit cards and are used in the same way, charge accounts differ in that you must pay the total balance every month.
3. Service credit. Your agreements with service providers are all credit arrangements. You receive electricity, cellular phone service, gym membership, etc., with the agreement that you will pay for them each month. Not all service accounts are reported in your credit history.
4. Installment credit. With installment credit, a creditor loans you a specific amount of money, and you agree to repay the money and interest in regular installments of a fixed amount over a set period of time. Car loans and mortgages are two examples of installment credit.
There are four types of credit:
1. Revolving credit. With revolving credit, you are given a maximum credit limit, and you can make charges up to that limit. Each month, you carry a balance (or revolve the debt) and make a payment. Most credit cards are a form of revolving credit.
2. Charge cards. While they often look like revolving credit cards and are used in the same way, charge accounts differ in that you must pay the total balance every month.
3. Service credit. Your agreements with service providers are all credit arrangements. You receive electricity, cellular phone service, gym membership, etc., with the agreement that you will pay for them each month. Not all service accounts are reported in your credit history.
4. Installment credit. With installment credit, a creditor loans you a specific amount of money, and you agree to repay the money and interest in regular installments of a fixed amount over a set period of time. Car loans and mortgages are two examples of installment credit.
Saturday, June 21, 2014
4 Things You Need Before You Buy A Home
Many factors go into whether it makes more sense to buy or rent. Here are four things you should have before homeownership. If you have them, buying may be a smart move.
1. An Emergency Fund: If you have avoided or paid off debts, your credit is healthy and you are saving for retirement, you may feel good about your financial situation. Before buying a home though, it's important to go another step further: Focus on building up an emergency savings fund.
4 Things You Need Before You Buy A Home
While everyone should really have an emergency fund to cover unexpected costs, it's especially important to homeowners. This should be in addition to the money you plan to use as a down payment. If you have enough cash to cover three to six months of your living expenses, you are much more prepared for homeownership. This way, in case your steady income is interrupted, you can still afford mortgage payments while you get back on your feet.
2. A Budget: A track record of maintaining a budget can be a good sign. If you already have a budget, try adjusting it to fit your new financial life as a homeowner before you buy. This should include mortgage payment, utility bills, homeowners insurance, property taxes, maintenance and upkeep costs. It's a good idea to even try living on that new mock budget for a few months. If you can do that comfortably, it may be a good time to buy.
3. A Steady Income: With mortgages usually 15 to 30 years in length, buying a home is a serious long-term financial decision. When calculating how much house you can afford a consistent income that covers monthly payments and miscellaneous home expenses is important. You may want to consider your other goals beyond buying a home. This may include how your financial situation will be affected if you plan to go back to school, start a family or change careers in the near future.
4. A Good Credit Score: When you go to a lender to apply for a mortgage, they will also look at your credit score in addition to your income. It's important to know where you stand before you actually apply for the mortgage, since there may be incorrect information on your credit reports that you can correct. And since your credit score will be a major factor in determining not only the interest rate you'll qualify for, but also whether a lender can even lend to you. (You can check your credit reports for free once a year -- here's how -- and you can see two of your credit scores for free on Credit.com.)
1. An Emergency Fund: If you have avoided or paid off debts, your credit is healthy and you are saving for retirement, you may feel good about your financial situation. Before buying a home though, it's important to go another step further: Focus on building up an emergency savings fund.
4 Things You Need Before You Buy A Home
While everyone should really have an emergency fund to cover unexpected costs, it's especially important to homeowners. This should be in addition to the money you plan to use as a down payment. If you have enough cash to cover three to six months of your living expenses, you are much more prepared for homeownership. This way, in case your steady income is interrupted, you can still afford mortgage payments while you get back on your feet.
2. A Budget: A track record of maintaining a budget can be a good sign. If you already have a budget, try adjusting it to fit your new financial life as a homeowner before you buy. This should include mortgage payment, utility bills, homeowners insurance, property taxes, maintenance and upkeep costs. It's a good idea to even try living on that new mock budget for a few months. If you can do that comfortably, it may be a good time to buy.
3. A Steady Income: With mortgages usually 15 to 30 years in length, buying a home is a serious long-term financial decision. When calculating how much house you can afford a consistent income that covers monthly payments and miscellaneous home expenses is important. You may want to consider your other goals beyond buying a home. This may include how your financial situation will be affected if you plan to go back to school, start a family or change careers in the near future.
4. A Good Credit Score: When you go to a lender to apply for a mortgage, they will also look at your credit score in addition to your income. It's important to know where you stand before you actually apply for the mortgage, since there may be incorrect information on your credit reports that you can correct. And since your credit score will be a major factor in determining not only the interest rate you'll qualify for, but also whether a lender can even lend to you. (You can check your credit reports for free once a year -- here's how -- and you can see two of your credit scores for free on Credit.com.)
Sunday, December 9, 2012
Using Secured Credit Cards To Build Credit
Secured credit cards can build your credit. Building up your credit has become even more important over the past few years as credit is harder to come by. Secured credit cards can help people with little credit history build credit and even save some from bad credit.
When lenders look at a credit report, one of the things they want to see is that you have a history of repaying loans in a timely manner. If you've never taken out a loan before or have only been using credit for a short time, lenders often lack the information they need to decide how creditworthy you are. In cases like this, a secured credit card might be your only option.
In the same way, if you had a rough period where your bills went unpaid or were only paid sporadically, it can be difficult to convince lenders that you are going to pay off any new loans. If you do manage to get a loan or credit card while having these black marks on your credit report, you will likely have to pay high fees and high interest rates.
Rebuilding your credit
There is a way to build -- or rebuild -- your credit. A secured credit card works like a debit card. Once you are approved, you make a deposit into an account linked to this new credit card. The card you receive will have a Visa or MasterCard logo on it, but you will not be able to charge more than the amount you previously deposited onto the card.
Over time, as you continue to make payments and stay within your credit limit, you are building credit history and improving your credit score.
Be a careful consumer
Some secured credit cards have fees. Also, ensure the card issuer reports your account to at least one of the three main credit bureaus so it can help improve your credit score. It is important to research the card the same way you would an unsecured card. Also, check whether your current bank or credit union might have a secured credit card to offer you.
When lenders look at a credit report, one of the things they want to see is that you have a history of repaying loans in a timely manner. If you've never taken out a loan before or have only been using credit for a short time, lenders often lack the information they need to decide how creditworthy you are. In cases like this, a secured credit card might be your only option.
In the same way, if you had a rough period where your bills went unpaid or were only paid sporadically, it can be difficult to convince lenders that you are going to pay off any new loans. If you do manage to get a loan or credit card while having these black marks on your credit report, you will likely have to pay high fees and high interest rates.
Rebuilding your credit
There is a way to build -- or rebuild -- your credit. A secured credit card works like a debit card. Once you are approved, you make a deposit into an account linked to this new credit card. The card you receive will have a Visa or MasterCard logo on it, but you will not be able to charge more than the amount you previously deposited onto the card.
Over time, as you continue to make payments and stay within your credit limit, you are building credit history and improving your credit score.
Be a careful consumer
Some secured credit cards have fees. Also, ensure the card issuer reports your account to at least one of the three main credit bureaus so it can help improve your credit score. It is important to research the card the same way you would an unsecured card. Also, check whether your current bank or credit union might have a secured credit card to offer you.
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