There are three major credit bureaus active today. These are Equifax, Experian, and TransUnion, and they're more important than you might think. What a credit bureau does, primarily, is collect information on how consumers around the country use credit. They gather the credit information of individual consumers and issue reports on it, such as a person's Credit Report, which is used by creditors like credit card companies, lenders, insurance companies, landlords, and so forth to decide whether or not to extend credit to somebody.
This process has been streamlined to work quickly and efficiently in most cases. When somebody applies for a loan, credit, or the like, the potential creditor sends an inquiry to one of the three big credit bureaus, or possibly to all three, to request a copy of that person's credit history. The creditor will then be able to use that information to make a decision about whether or not the applicant is a safe bet to extend credit to.
The problem with this process is that Equifax, Experian, and Transunion all collect information different and report it according to a different formula. A single person's credit reports and all-important credit score may be different depending on which agency reports it. Some creditors will request reports from all three, but some will not. Therefor, it behooves the consumer to know their own credit score from all three major credit bureaus, so that a consumer will know if their score is significantly lower on one report than the other two, and could potentially give them time to investigate and correct any errors that one bureau might have made BEFORE their application is denied on those grounds.
Another, less often used service that the credit bureaus can provide is help with identity theft. If someone believes that their information may have fallen into the wrong hands and fears that it may be used fraudulently, they can call one of the major credit bureaus and have them place a fraud alert on their credit file, which, among other things, automatically opts the consumer out "pre-approved" credit and insurance offers for two years, making it much more difficult for somebody to use the consumer's information against them. It will also let any creditors who request that consumer's credit information know about the fraud alert, which will notify them to be more careful in verifying the consumer's identity before extending credit to somebody using the consumer's information.
Wednesday, June 10, 2009
Do Your Research Before Asking For a Lower Credit Card Rate
The thing about credit card rates is that it is not always easy to keep ahead of them. However by looking for ways to lower your rates you can save yourself money in the long run (even if you only make minimum monthly payments).
If you are a shrewd negotiator you can speak with a representative from your credit card company about lowering your rate but first you need to get the facts. You need to start with the basics- what are you paying presently in terms of an interest rate? You also need to know what your current balance is.
You then need to have a source of comparison for the interest rates you are paying. You have to know what the average rates are at other companies. There a numerous websites that can help you to zero in on the lowest rates around. If you have received any credit card offers in the mail then you might want to check out the rates on the card in question through these sites too.
What kind of customer are you? Are you a good one, a fair one or could you do with some improvement in terms of paying your bills? Have you been with the company for a long time or not? The better a customer you have been and continue to be, the simpler it will be for you to negotiate with your company and convince them to see your side of things. As well, if your credit score is higher than 750 you should qualify for a rate of 10 percent or less.
Next comes the hard part- calling your company and asking them for what you want. It never hurts to write yourself a script ahead of time so you have a loose guideline of what you wish to say. Never let anyone tell you that credit card rates are non- negotiable because that is not the case by any means!
When you get through to your credit card company be polite with the person(s) you speak to but also be firm. Have the relevant information you have researched on hand when you call. This includes the rate you are presently paying and the lower rates you have discovered from other companies. Find out if your company is willing to match the lowest offer you have found or if they are willing to offer you an even better one. You will not know until you try!
If you are a shrewd negotiator you can speak with a representative from your credit card company about lowering your rate but first you need to get the facts. You need to start with the basics- what are you paying presently in terms of an interest rate? You also need to know what your current balance is.
You then need to have a source of comparison for the interest rates you are paying. You have to know what the average rates are at other companies. There a numerous websites that can help you to zero in on the lowest rates around. If you have received any credit card offers in the mail then you might want to check out the rates on the card in question through these sites too.
What kind of customer are you? Are you a good one, a fair one or could you do with some improvement in terms of paying your bills? Have you been with the company for a long time or not? The better a customer you have been and continue to be, the simpler it will be for you to negotiate with your company and convince them to see your side of things. As well, if your credit score is higher than 750 you should qualify for a rate of 10 percent or less.
Next comes the hard part- calling your company and asking them for what you want. It never hurts to write yourself a script ahead of time so you have a loose guideline of what you wish to say. Never let anyone tell you that credit card rates are non- negotiable because that is not the case by any means!
When you get through to your credit card company be polite with the person(s) you speak to but also be firm. Have the relevant information you have researched on hand when you call. This includes the rate you are presently paying and the lower rates you have discovered from other companies. Find out if your company is willing to match the lowest offer you have found or if they are willing to offer you an even better one. You will not know until you try!
Credit Score Factors
An individual's FICO credit score ranges from 300 to 850 and is determined via a number of factors. The specific formula used by the Fair Isaac Corporation is not revealed specifically as it is considered proprietary information. The general factors that do makeup the score are however known to the public, and consist of the following:
Payment History (35 Percent)-Thirty-percent of the credit score is based upon the payment histories of an individual's credit accounts found in their credit report. Whenever a payment is made late by a certain length of time, is missed completely, or is sent out for collection, a negative mark is ascribed to that particular person's credit report. Each of these negative marks contributes to the lowering of this metric, and the overall credit score. Payments made on time for extended periods of time can be viewed upon as positive marks, and can therefore boost a score. The combination of both positive and negative marks are valued appropriately and added up to equal this thirty-five percent proportion, which plays a significant role in the determination of the final credit score.
Debt to Credit Limit Ratio (30 Percent)-The debt to credit limit ratio is a fractional quotient that represents a person's overall utilization of their credit supply. A specific credit limit is reported for each credit card account a person has present within their credit report. So for example, if a person with three credit card accounts is utilizing 2,000 dollars on each card, and each account has a 10,000 dollar limit, then that person is utilizing 6,000 dollars out of the 30,000 dollars possible. The ratio would then be calculated by dividing the 6,000 by the 30,000, and in the end getting a twenty percent ratio, (6,000/ 30,000=0.20 x 100 = 20%). The ratio itself conveys a borrower's risk level to the lender-a 0-20% score is perceived as low risk, 20-50% is considered moderate risk, and anything over 50% is looked upon as a higher risk.
Length of Credit Accounts (15 Percent)-The amount of time an individual has had their credit accounts open makes up about fifteen percent of the score. The longer the accounts have been open the better, and lenders look upon the overall time a person has been issued credit as a universal indicator.
New Credit (10 Percent)-Opening any new credit accounts will affect a person's score in a negative fashion. Newer accounts are perceived as a higher risk by lenders, and therefore can adversely affect a credit score. Credit inquiries are also penalized and accounted for within this metric. Hard inquiries are the ones that convey a negative effect, while soft inquiries do not affect this metric at all.
Types of Credit Accounts (10 Percent)-This metric is determined by the number of different kinds of credit accounts a person has had open over time-the greater the variance, the higher the score. Practically speaking, lenders like to see that a borrower can handle different kinds of credit accounts, and that includes both a mixture of installment loans, and revolving credit accounts.
Taking all of these factors into consideration, a person can substantially increase their credit score if they know how to manipulate them accordingly.
Payment History (35 Percent)-Thirty-percent of the credit score is based upon the payment histories of an individual's credit accounts found in their credit report. Whenever a payment is made late by a certain length of time, is missed completely, or is sent out for collection, a negative mark is ascribed to that particular person's credit report. Each of these negative marks contributes to the lowering of this metric, and the overall credit score. Payments made on time for extended periods of time can be viewed upon as positive marks, and can therefore boost a score. The combination of both positive and negative marks are valued appropriately and added up to equal this thirty-five percent proportion, which plays a significant role in the determination of the final credit score.
Debt to Credit Limit Ratio (30 Percent)-The debt to credit limit ratio is a fractional quotient that represents a person's overall utilization of their credit supply. A specific credit limit is reported for each credit card account a person has present within their credit report. So for example, if a person with three credit card accounts is utilizing 2,000 dollars on each card, and each account has a 10,000 dollar limit, then that person is utilizing 6,000 dollars out of the 30,000 dollars possible. The ratio would then be calculated by dividing the 6,000 by the 30,000, and in the end getting a twenty percent ratio, (6,000/ 30,000=0.20 x 100 = 20%). The ratio itself conveys a borrower's risk level to the lender-a 0-20% score is perceived as low risk, 20-50% is considered moderate risk, and anything over 50% is looked upon as a higher risk.
Length of Credit Accounts (15 Percent)-The amount of time an individual has had their credit accounts open makes up about fifteen percent of the score. The longer the accounts have been open the better, and lenders look upon the overall time a person has been issued credit as a universal indicator.
New Credit (10 Percent)-Opening any new credit accounts will affect a person's score in a negative fashion. Newer accounts are perceived as a higher risk by lenders, and therefore can adversely affect a credit score. Credit inquiries are also penalized and accounted for within this metric. Hard inquiries are the ones that convey a negative effect, while soft inquiries do not affect this metric at all.
Types of Credit Accounts (10 Percent)-This metric is determined by the number of different kinds of credit accounts a person has had open over time-the greater the variance, the higher the score. Practically speaking, lenders like to see that a borrower can handle different kinds of credit accounts, and that includes both a mixture of installment loans, and revolving credit accounts.
Taking all of these factors into consideration, a person can substantially increase their credit score if they know how to manipulate them accordingly.
Reduce Your Debt by 50% at Your Credit Card Company!
Did you know that you can legally and technically reduce your debt load by 50%? Did you also know that if you only owe $10,000 to your credit card company that you will have to pay at least $40,000 in interest and this $10,000 will take you over 40 years to pay off?
This means that the debt that you charge today is going to follow you into retirement. This does not have to be, especially when there are companies that have released free information that can teach you how to get out of debt as fast as possible as they show you little-known tactics to improve your credit rating and to get some of your debt erased from credit card companies.
95% of all bankruptcies are the result of credit card debt. America is educated on how to get in debt because we have been educated by the credit card companies. However we have not been educated on how to reduce your debt load and we have not been informed that we can reduce your debt load. This information is quite a surprise to many individuals as they are not aware that there many options available for them to reduce their debt at a credit card company.
So if debt is bothering you and you stay up late at night wondering how you to pay off you need to take advantage of this information that can help you get out of debt faster and start repairing your life and your credit rating and get out of debt.
This means that the debt that you charge today is going to follow you into retirement. This does not have to be, especially when there are companies that have released free information that can teach you how to get out of debt as fast as possible as they show you little-known tactics to improve your credit rating and to get some of your debt erased from credit card companies.
95% of all bankruptcies are the result of credit card debt. America is educated on how to get in debt because we have been educated by the credit card companies. However we have not been educated on how to reduce your debt load and we have not been informed that we can reduce your debt load. This information is quite a surprise to many individuals as they are not aware that there many options available for them to reduce their debt at a credit card company.
So if debt is bothering you and you stay up late at night wondering how you to pay off you need to take advantage of this information that can help you get out of debt faster and start repairing your life and your credit rating and get out of debt.
The Importance of Having Good Credit For Business Start Up Or Expanding
We can not do anything to change the economy today, however, you can increase your chances for getting a loan to expand are start your dream business. The banks are tightening up on their loaning guidelines. even the small business administration has also cut their loans down by 31 percent. The current recession has caused our banking systems to require more documentation. There is good news! They have not stopped giving loans all together if you have good credit.
lenders look at your credit score before approving you for your business. Here are some things you need to know before attempting to get a loan.
. Lenders get there info from FICO scores and credit reporters.
. FICO is fair Issac Corporation it is a three digit number used to analyze your credit score.
. It ranges from 300 to 850, this tell the lender how likely your are to pay your loan.
There are some steps you can take to begin repairing your score.
. You should start by getting your credit report
. You can get it from the three reporting agencies.
. Experian
. Equifax
. TransUnion
. Request it if you have filed for a loan and been rejected.
You can also get a free credit report once a year from these three agencies. For your free credit report, visit www.annualcreditreport.com If you want to find out your FICO score that is $47.85 for a one time purchase. You may sign up for automatic repurchase www.myfico.com
Ways to fix your credit and review your report. If you find errors on your report such as accounts that were not yours, you may dispute items that have been on your report to long. Such as negative information that has been on your report for more then seven years, or bankruptcies more then ten years. This is how you go about reporting these errors tell the consumer reporting company in writing write what the error is. Send a copy of the document that you dispute and copy of your credit report with the error circled. Keep a copy of your communication also.
The credit reporting agency has 30 days to investigate. However, if you have any loans that you know you are late on do not dispute them they will get kicked back and it will only further your grief. So if your in the hunt for a business start up or expansion do your home work. Try to get your scores up in the 700 to 750 range to better you chances for lower down payments and lower interest rates. I hope my research can help you out. Good luck with your new business.
lenders look at your credit score before approving you for your business. Here are some things you need to know before attempting to get a loan.
. Lenders get there info from FICO scores and credit reporters.
. FICO is fair Issac Corporation it is a three digit number used to analyze your credit score.
. It ranges from 300 to 850, this tell the lender how likely your are to pay your loan.
There are some steps you can take to begin repairing your score.
. You should start by getting your credit report
. You can get it from the three reporting agencies.
. Experian
. Equifax
. TransUnion
. Request it if you have filed for a loan and been rejected.
You can also get a free credit report once a year from these three agencies. For your free credit report, visit www.annualcreditreport.com If you want to find out your FICO score that is $47.85 for a one time purchase. You may sign up for automatic repurchase www.myfico.com
Ways to fix your credit and review your report. If you find errors on your report such as accounts that were not yours, you may dispute items that have been on your report to long. Such as negative information that has been on your report for more then seven years, or bankruptcies more then ten years. This is how you go about reporting these errors tell the consumer reporting company in writing write what the error is. Send a copy of the document that you dispute and copy of your credit report with the error circled. Keep a copy of your communication also.
The credit reporting agency has 30 days to investigate. However, if you have any loans that you know you are late on do not dispute them they will get kicked back and it will only further your grief. So if your in the hunt for a business start up or expansion do your home work. Try to get your scores up in the 700 to 750 range to better you chances for lower down payments and lower interest rates. I hope my research can help you out. Good luck with your new business.
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