When you apply for a credit card or loan, your credit reports are thoroughly reviewed by the lenders. You have a good chance of getting a loan or credit card approved if the credit reports portray a positive history. But if there are missed or delayed payments in the reports, there is a good chance you may be denied.
What is a Credit Report?
A credit report is a record of your credit activities. It lists all of your credit card accounts and loans, their balances, and how regularly you make your payments. It also shows any actions that have been taken against you for evading or delaying payments. It includes information such as payment of bills, repayment of loans, available credit limit, monthly debt and so on. A potential lender can assess your financial status through your credit report.
Credit Reporting Agencies (CRA), also known as Credit Bureaus, gather this information from merchants, landlords and lenders. They pass this report on to businesses so that your application for credit can be evaluated. Based on different criteria, lenders decide whether you are a good credit risk or a bad credit risk.
A credit report usually includes the following:
Personal identifying information – This includes your name, address, telephone number, social security number, previous and current employers, date of birth, etc.
History of Credit – This includes your history with banks, payment of bills, current account information, and available credit. If you have missed or delayed a payment, or even closed an account, it will show up in this section.
Public Records – Judgments given by the court, bankruptcies, tax liens, if any, appear in this section.
Report Inquiries – This section includes all the credit granters who have received a copy of your credit report, as well as others who have had the authority to view it. The concept of pre-approved credit arises from this section.
Dispute Statements – If there have been disputes associated with your credit or financial statements, it appears in this section. Credit bureaus allow creditors and consumer alike to make such statements.
Credit Report vs. Credit Score
Credit reports are often confused with credit scores. While a credit report is a statement of your financial status, a credit score is a numerical expression based on statistical analysis of a person’s credit files. It represents the credit worthiness of an individual. The credit score is sourced from credit bureaus.
Your credit rating is drawn from your credit report, which outlines your borrowing, charging, and repayment activities. A good rating helps you reach financial goals; a poor rating limits your financial opportunities. It is imperative to have an effective debt management plan to protect your credit rating by making loan and bill payments on time and by not taking on more debt than you can handle.
Posts Tagged ‘Reports’
The Concept Behind Credit Reports
How the FICO, TrueCredit and Vantage Credit Reports are Different
Do you feel baffled and bewildered when you take a look at your credit report scores? Well, if you do you’re not the only one. Each of the 3 credit bureaus namely Equifax, Transunion and Experian generates a separate credit report and develops a score based on this credit report.
If you’re surprised by the difference in scores from these 3 credit reporting agencies you’ll be interested to know that these variations take place on account of diversity of information in the credit report and scoring techniques.
Fair Isaac Inc. was the first company that developed credit scores using statistical analysis. It used the FICO scoring method to arrive at these scores. It then promptly licensed FICO to all the 3 credit bureaus which went on to develop their own versions of the classic FICO scoring method. Around 2005, all 3 credit reporting agencies combined forces and began developing the VantageCredit scoring method.
FICO scores are widely used by lenders to review risk and credit-worthiness of borrowers. Ever since it’s inception, its use has become prevalent among the credit bureaus and lenders alike. Frequently you’ll notice that the credit report score you get from any of the credit reporting agencies differs from the one used by the lender. This is because there are at least 5 variations of the classic FICO scoring method.
The standard FICO scoring method uses a scale running from 500-850 to judge consumer credit behavior. A score of 650 or above is perceived as a good score, above 750 is excellent and below 550 is awful.
The factors which determine your credit score are payment history, total amount owed, length of credit history, new inquiries on your account and kind of credit utilized. The higher the score, the lower the risk involved.
Lenders may check the credit scores and reports by the 3 credit bureaus but alternatively may also develop their own FICO scores.
You are entitled to a free copy of your credit report from all the 3 credit bureaus. However, this report does not include your credit report score. You’ll have to purchase one for a price and you can get one from companies other than FICO. So this makes matters all the more puzzling.
The “TrueScore” is one that is developed and sold by Transunion through its affiliate website www.TrueCredit.com. Even Experian sells its own FICO score called the “PLUS” score. You can also log on to www.myFico.com and get your credit score from all 3 credit rating agencies. Truth be told, these may differ significantly from the ones used by mortgagers and lenders.
Transunions Truecredit monitoring system gives you scores and reports from all the 3 credit agencies (Transunion, Experian, Equifax). You get notified via email of any changes to your credit report within 24 hours. It also has a “Trends” section that displays trends over a period of time covering seven aspects ranging from Available Credit” to “Total Debt”. All this is available for a fee of around $15 per month.
In March 2006, all 3 credit bureaus jointly launched the VantageScoring Model. While this model is similar to the classic FICO model, there are also some deviations.
The VantageScore point system ranges from 500 to 900 with each 100 point section related to grades from A to F, A depicting the lowest risk category. Here, weightage is given to factors like payment history(32%), utilization(23%), balances(15%), depth of credit(13%), recent credit(10%) and available credit(7%).
It was reported that several lenders favored the VantageScore system. But there are many lenders who are somewhat reluctant to embrace this model since they have to modify their existing systems and design new ones to adopt the VantageScore model.
The credit reports and scores obtained by using FICO, True Credit and Vantage Scores are by and large similar with a few differences. The credit scores you get using each of these systems may vary by about 5 points give or take. So if you were confused before, you now know why these dissimilarities arise.
Pamella Neely helps people decide if they should donate their junk car, donate an RV or donate a boat.
Posted in Free Credit Report 
Tags: Credit, Different, FICO, Reports, TrueCredit, Vantage 
Comments OffFree Annual Credit Reports ? How to Get Them
Overview
Reviewing your annual credit reports is essential to ensuring your credit is in good standing and accurately reported. There are three main credit bureaus that store your credit information; Equifax, Experian, and TransUnion. These bureaus don’t report your payment history and information; rather they store the information that others report (banks, utilities, etc.).
It is important to get your free annual credit report from all three bureaus because they differ slightly in the manner in which they report your information. Often times, the reports are similar, if not identical. However, it can only take one reporting error on any one of the three reports to cause you grief.
Getting Your Three Free Reports
Under the Fair and Accurate Credit Transactions Act (FACTA), all Americans are entitled to one free credit report from each of the aforementioned credit bureaus. At the least, you should access these three free reports once per year.
Other Ways to Get a Free Credit Report From Equifax, Experian, and TransUnion
In addition to your guaranteed three free annual reports mentioned above, you can also get a free credit report from the three bureaus when any of the following scenarios occur.
You are on welfare.
You were denied credit within the last 60 days.
You are currently unemployed and seeking work within the next 60 days.
You have had your identity stolen and have reported it to the police.
Where to Get Your Free Reports
If you want to get your three free reports at one time, you can visit annualcreditreport.com. This website will give you your three free reports with no strings attached or credit monitoring trial.
You can also go to each of the credit bureaus websites and request your report by calling, emailing, or sending them a request via snail mail.
When you get your free reports, you will not get your credit scores; the three digit FICO score that most of us want to see. The credit score is often used to quickly gage your credit health. To get your scores, you must purchase them. This can be done by visiting each of the three credit bureau websites and paying for your score or by using our website; theFreeAnnualCreditReports.com.
By signing up for a trial membership of credit monitoring, you can get all three of your annual credit reports and your three credit scores; free of charge. Although the credit monitoring service is a useful tool, you may not want it. Not a problem. Simply cancel the monitoring service and poof; you have your free reports and scores.
Provided by Free Annual Credit Report and Scores
Free Credit Reports – Myths Uncovered
Free Credit Reports are important because depending on their content, they can cost or save you money. If they contain negative factors, or are incorrect, then you will find it hard to obtain credit in the first place, and if you do obtain credit, it will be at higher interest rates.
Credit Reports are created and updated by the UK three main credit reference agencies, which include Experian, Equifax and Callcredit. These are marketed as free credit reports.
When you apply for something, your credit file can be checked with your permission, credit checks can be made when you apply to rent a house, store credit, apply for a job, apply for a finance product such as car finance, loans, mortgages, credit cards etc, so your credit report impacts all parts of your life!
The top myths surrounding credit reports:
Individuals can access their credit report (not just lenders and financial institutions), you have more than one credit report, as one is compiled by each credit reference agency.
Nothing is Free – Free credit reports are actually first month free credit reports, with recurring monthly payments after the first month.
There is no blacklist of consumers, who should be refused credit.
Individuals do not have one credit score or rating, lenders work out your score every time you apply for credit or finance. These score can differ between different products, you are applying for, for example credit cards versus loans. Lenders understand the profile of an excellent customer and use your application details and credit report to mark you against this.
Looking at your credit report, does not count as a search or footprint on your credit history.
The credit reference agency does not dictate whether you are accepted or not for a credit application, the company you are applying to makes the decision.
In an application it is not just the credit report content, which is considered, the lender also looks at your application details.
Your credit report, does not contain details including, salary information, employment status, criminal records, employer details, any savings accounts you have.
Only the lender can tell you why your application was rejected not the credit reference agency.
Financial information on people who lived at your address previously cannot impact you with your applications.
Credit Repair companies cannot do anything consumers cannot do themselves,. You cannot pay to remove negative sections of your credit file. Credit Repair companies often make false claims such as being able to remove county court judgments from your credit file (they stay on file for six years unless the person pays the full amount owed within one month of the judgement being issued.
Your credit report does contain the following key information:
Public Information including your Electoral Roll address, County Court Judgements, Bankruptcies, IVA’s (individual voluntary arrangements).
Searches on your credit file, for example which lenders may have checked your credit history when you applied for credit.
Reposessions
Credit Account Information – Including credit you have up and running, total outstanding amount, if payments are made on time, if credit arrangement are settled.
CIFAS – Identity fraud notes, where companies will update if an individual has been a victim of identity fraud.
GAIN – Shared details on consumers who have moved without letting companies they owe money to know.
For free strategies to improve your credit rating score by checking and updating your free credit reports from Experian’s Credit Expert, Equifax and Callcredit
Edward has a keen interest in strategies to help individuals improve their credit score, reduce their debt and get the credit they deserve, www.creditgeeks.co.uk.
Government Free Credit Reports – You Can Size An Opportunity Of Finances
Free government credit report is obtainable for every single American citizen with a social security number and any form of borrowing history.
Instead of having to pay for a credit report from the reporting bureaus, you can take the advantage of the government free credit reports since the congress passed the Federal Fair Credit Reporting Act that gave credit overview access to the credit information.
Hector Milla Editor of the “Best Credit Reporting Services” website — http://www.CreditReportsAndScores.biz — pointed out;
“… A soiled credit report can ruin your chances of getting a mortgage, chance of owning a car, student loan, or even a job opportunity. When seeking a loan of any sort, it is important that you first get a credit report. Having a credit report will allow you to know the state of your credit score and you will be able to determine your chances of getting the loan …”
Some people have never shown any concern for identity theft, and therefore never sought to get credit reports. A free and mandated government credit report will help you do just that. You will be able to monitor regularly your credit status and note any unscrupulous dealings that may have taken place.
“… Credit reports have been the best-known method to catch identity thieves. With a credit report, allows you to monitor your credit information and you will be able to report of any disputable information that you witness in the credit report. Obtaining regular credit reports is necessary especially to persons who have been past victims of identity theft or those who think that they are at a high risk of identity theft …” H.Milla added.
After ordering and receiving the free government credit report many people may not understand the information. There are websites that assist a person to understand the language and codes used in the credit report. Simply type “understanding credit report” on your web browser and you will be able to get the information that you need. You can also get help from friends and relatives who are fam9liar with the codes and language used in the credit reports. Since free credit reports are available, everyone should take advantage of them to protect their identity theft.
Further information about how to get a detailed credit report including scores and as often as you want by visiting; http://www.BestCreditReportServices.com
Hector Milla
Posted in Free Credit Report Tags: Credit, Finances, Free, Government, Opportunity, Reports, Size Comments OffWhen Free Credit Reports Aren’t So Free – How New Rules Force Ads to Disclose Costs
We’ve all seen the ads…those catchy “get a free credit report” TV commercials with the three young men dressed as pirates…singing the virtues and benefits of getting a free credit report. The only problem – as shoppers of free credit reports have found out – is that a “free” offer often comes with strings attached. People trying to obtain a credit report from sites offering supposedly free credit reports frequently end up frustrated and angered by misleading promises.
The Federal Trade Commission has implemented rules that address misrepresentation of free offers for credit reports – let’s take a look at what this new rule does, how it affects you, and where anyone can go to be absolutely sure a credit report offer is indeed free of charge.
Free Credit Report Offers Often Misleading
The fact is that many companies claim to offer credit reports free of charge – but very few actually do. Experian (which is one of the three major credit reporting agencies in the U.S.) operates the sites FreeCreditReport.com and ConsumerInfo.com. These are just two examples where the use of the word “free” has come into question. The Experian sites package their credit report offer with a trial membership in a service product they call Triple Advantage Credit Monitoring. Seven days are allowed to cancel the membership, after which a $14.98 monthly fee goes into effect. Consumers are often not aware that they had signed up for an additional service.
New FTC Rule Requires Disclosure
Effective April 1st, 2010, the new rules instituted by the FTC took effect and regulate how companies can advertise credit report offers. The new law requires commercial websites that offer free credit reports to include a message box on the site that lets you know you can get a free credit report at annualcreditreport.com. Experts consistently strive to remind consumers that AnnualCreditReport.com is the one and only authorized source for getting a free annual credit report. As stipulated in the Fair Credit Reporting Act – everyone has the right to obtain one credit report per year (free of charge) from each of the three nationwide credit reporting agencies – Experian, Equifax, and TransUnion. Keep in mind that you won’t be able to see or retrieve your FICO credit score at AnnualCreditReport.com, only your credit report.
The new law has an immediate impact on commercial websites that offer credit reports. As mentioned above, websites are now required to provide a message that directs consumers to the one and only government authorized website for free credit reports. On September 1st, 2010 - the same rules apply to TV and Radio advertising.
Other Ways to Get a Free Credit Report
Aside from going to AnnualCreditReport.com, federal law states that anyone who has had adverse action taken upon them due to information from a credit report is entitled to receive their credit report free of charge. The adverse action could be a case of denied credit, an employment matter, or denied insurance. The report is not automatically sent to you – you do have to request it. When any company takes adverse action against you due to credit report information, they are required to give you an adverse action document. That document lists the contact information for the credit bureau agency, whereupon you have 60 days to request a free report.
Additionally, consumers in Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey, and Vermont, under their respective state laws, have free access to their credit reports.
Visit ConsumerFinanceReport.com and check out our original article library that covers a range of personal finance issues and topics, such as this article on free credit reports. Related sections include advice on how consumers can best pay off debt.
The Truth About “free” Credit Reports
We set the record straight so that won’t happen. Text How many of us have looked at anything offered to us for “free”? Not me? Of course I have. In this day in age when gas prices are listed as “Arm” and “Leg”, providing health insurance for your family costs more than some mortgage payments and the cost of raising kids looks like a hockey stick pasted onto a graph, you bet I look at offers to save money.
Therein lie’s the problem. It seems like the vast majority of American consumers are desperate to cut costs, any costs, and will jump too soon at offers promising to do just that. Sometimes when you combine a cost cutting mentality with the importance of credit, not only to purchase the big ticket items important to us, but more and more to simply survive in this economy, desperation happens. Unfortunately, the marketers know this too. So, without a little education anyone can get confused and the likelihood of being taken advantage of increases significantly. The good news is that just a little education will save you plenty.
Take for example, the term “Free Credit Report”. It now ranks right up there with the ubiquitous, “new” and “improved”. “Free Credit Report” has become part of that lexicon of advertising buzz words that are absolutely meaningless to me. But for many, there is much confusion over this term. Why? I think mainly because it has been announced that federal law dictates we are all entitled to a free credit report on the front page of all the newspapers.
We know everyone wants a free credit report, which is why we started our site. People naturally want something that is mandated by law to be at no cost, is front page news and is so incredibly important to each of us if we want to purchase just about anything. We know people want their free credit report and because most all of us work so hard for our money, we think people deserve hearing the truth about the subject. That is why we even put a section on our page entitled, “The Truth About Free Credit Reports”.
So, is it not true? Yes, it is true, it’s just that the devil is in the details and the resulting confusion has been a bonanza for those seeking to cash in on the confusion. In fact, each of us in the good ole U. S. of A. is entitled to a free credit report. But, how do you get it? Where do you get it? Who is giving it to you? Why is it being offered for free? And most importantly, who cannot offer you one for free?
Who cannot offer a free credit report? Let’s start with the last one first because it shines a lot of light on the rest of the questions. Any company, web site or service that is in business for a profit and is not named Experian, Trans Union or Equifax is not able to provide anyone at any time with anything remotely resembling a credit report free of cost. Period. End of story. Got that? Further, there is one place set up on the web to get free copies of credit reports at no cost and it is: www.annualcreditreport.com . We’ll talk more about this site a little later but, other wise, caveat emptor, let the buyer beware.
How then are these offers being made? Look closely, the “Free” report is usually offered initially upon signing up for a service that charges your credit card each month for monitoring your credit. If you cancel the service just in the nick of time, before the charge is made to your card, you will get it at no cost. What a hassle! And the bet is you will wake up at least one, if not a couple or more months later with several charges to your card. You think these guys make foolish bets?!
Then what caused a free credit report to be offered on the front page of newspapers, who is providing them and how and where do I get one? Due to the importance of consumer credit history, identity theft and complaints from consumer rights groups about having to purchase a credit report in order to gain knowledge about the contents shown on individual consumer reports, even if it was reported inaccurately, a change was mandated.
The Fair and Accurate Consumer Trade Act (FACTA), a revision of the Fair Credit Reporting Act, provided for one credit report free of charge from the reporting agencies (Experian, Trans Union and Equifax) every twelve months, if and only if, you haven’t received a credit report in the previous twelve months. The consumer, by either mailing a written request to the three major credit reporting agencies or going to www.annualcreditreport.com one can obtain the free report if they meet the criteria. This program was and is being phased in to sections of the U.S. by the credit reporting agencies starting in the western states, with the northeastern states at the time of this writing still to come.
However, Pamela Yip of The Dallas Morning News writes that even this has not been without its problems.
“The Federal Trade Commission said Experian Information Solutions Inc., one of the three major credit bureaus, settled complaints that it “deceptively marketed ‘free credit reports’ by not adequately disclosing that consumers automatically would be signed up for a credit report monitoring service and charged $79.95 if they didn’t cancel within 30 days… . With the help of the Federal Trade Commission, the bureaus established www.annualcreditreport.com as the only authorized online source for consumers to get a free report under federal law.
While many consumers haven’t had any problem getting their reports, others say they’ve been hit with sales pitches for products and services from the credit bureaus or were diverted to imposter sites. The FTC said the company led consumers to its www.freecredit report.com and www.consumer info.com Web sites. Radio, TV, e-mail and Web ads promised free reports and “a bonus – free trials of a credit-monitoring service.”
The FTC said consumers “were assured that: ‘Your card will not be charged during the free trial period. However, valid credit card information is required to establish your account.’ ”
What the Web sites didn’t adequately disclose is that consumers would be charged the $79.95 annual fee if they didn’t cancel within 30 days, the FTC said.
“ConsumerInfo billed the credit cards that it had told consumers were ‘required only to establish your account,’ and, in some cases, automatically renewed memberships by rebilling consumers without notice,” the agency said.
As part of the settlement, the FTC required ConsumerInfo.com, an Experian company, to “give up $950,000 in ill-gotten gains.”
Experian also has agreed to provide refunds to consumers who purchased credit-monitoring products and ordered a free credit report between Nov. 1, 2000, and Sept. 15, 2003.
“It’s unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn’t want in the first place,” said Lydia Parnes, director of the FTC’s Bureau of Consumer Protection.
“It wasn’t an attempt to mislead at all,” said Peg Smith, an Experian executive vice president. “We absolutely deny any wrongdoing.” She does acknowledge that consumers may have been confused.
“To the effect that our product offering has caused that confusion, we certainly regret that,” Ms. Smith said. “We encourage consumers to read the language in any disclosure on any Web site, including our own.”
The FTC also requires ConsumerInfo.com to state clearly that its free credit report offer isn’t related to the federal program.” http://nl.newsbank.com/nl-search/we/Archives?p_action=list&p_topdoc=21
The reality is that no one credit report or combination of three credit reports by and of themselves is sufficient to educate oneself about where you stand as a consumer in the eyes of a lender. Imagine a high speed race boat zooming across a lake at top speed without a steering wheel. Where it is going is a complete mystery but one thing is for sure, it will crash and crash quickly unless you get control. That’s right, you. Because without your credit scores and the knowledge about what they mean, how they were calculated or how a lender views them, you are headed for a crash.
No bank, credit card issuer, mortgage company, retail store or any other credit provider will grant you any item, service or product without looking almost exclusively at your credit scores and the average person has no idea what their scores are and even if they did, many if not most, wouldn’t know what they mean.
For example, most people don’t even know that repeated “pulling” of your credit reports by potential credit grantors lowers your scores by as much as four points per “pull”. You start “shopping” around for the best rate on a credit card by allowing each credit issuer to run a credit report on you and your score will take a dive. The [...]