Credit Reports and Scores

Credit score monitoring is important for consumers who need to ensure their scores are strong enough especially when considering a loan or other type of financing. Now, through today’s technologies integrated into today’s mobile phones, consumers can access their credit scores while on the go using several phone apps suitable for a mix of consumer mobile phones.

For instance, Apple has an application for its iPhones where users can received updated credit scores from the credit reporting agency Experian each month. They can also inquire about more specific information such as their ratio of available credit to their total credit limits.

The idea behind mobile access for credit scores can aid consumers in achieving better results where credit checks are used such as when you are looking at renting an apartment or a house and the landlord is interested in your credit background before approving the signing of the lease. If you are pursuing other financing such as an auto loan or a mortgage, the mobile apps will allow consumers to make more informed choices while in the moment. Read more…

According to a survey conducted by TransUnion, the consumer credit reporting bureau, an estimated 56% of American consumers have not conducted a personal credit check during 2011.

Credit scores are the core of a consumer’s financial stability and since less than half of American’s with a credit history are not following through with financial expert advice – to check credit reports at least annually, if not every 6 months. Those working to improve their credit score should be checking scores more frequently.

It this day and age, consumers are doing their financial stability an injustice by staying in the dark about their credit score. Consumers will need to spend more money for basic services and products they use in their daily life if their credit score continues to stay low. More industries are looking at credit scores before providing services like utilities, rental properties, cell phones, and even employment opportunities. Low scores will guarantee more upfront security deposits and higher interest rates on personal loans and mortgages.

Financial experts have also pointed out that nearly 80% of consumer credit reports contain some kind of inaccurate information or mistake. For this reason, consumers are encouraged to regularly review credit reports and file Read more…

Sen. Chuck Schumer (D-NY) criticized credit reporting agencies on Sunday for newly developed scores that have little to do with credit, including the so called “Medication Adherence Score” and the “Income Insight Score.”

FICO’s “Medication Adherence Score” is a method of determining a patient’s compliance with taking medication prescribed by a doctor which taps pharmacy data including information about length of employment, verification of home address, their age and whether they live alone or not. These metrics are compiled into score which insurance companies use to determine how much in premiums to charge, according to Schumer.

Experian’s “Income Insight Score” is a system to predict a consumer’s income, extending its results to credit card issuers and home mortgage lenders.

Schumer has requested that FCC Chairman Jon Leibowitz investigate these new ratings and the credit bureaus’ legality in withholding the information from consumers as a possible violation of the Fair Credit Reporting Act. Read more…

A new article published at Time.com is shedding light on the various ways consumer credit reports are being used and some of the tidbits are startling.

Credit scores have long been an important aspect of a consumer’s financial life. It is a credit score that can often make or break new financing decisions or credit card approvals. With the tough economy, people are being encouraged to pay a lot more attention to their credit standing so they have the same financial options that people with excellent credit records have.

Time reports that credit scores are also no longer something just creditors take into consideration. The information contained in the report can reveal to companies a lot more than you anticipated. Some things businesses can glean from a credit history include the amount of extra cash you are likely to have on you and who is likely to take prescription medication as directed.

This information may seem completely irrelevant to the consumer but businesses are thriving on the opportunity to target new audiences with their products and services. Consumers believed to have extra income to spend can become the recipient of many new offers once Read more…

As credit-wise consumers, we have been told over and over that we should never disclose our personal financial information to other individuals without good reason. Identity theft and credit scams are rampant and consumers need to practice discretion when it comes to their top secret personal information in order to protect themselves and their finances.

The Fair Credit Reporting Act was established to protect the private information of consumers by limiting who is allowed to access credit reports and conduct credit inquiries. In order to understand how the protection works, consumers need to understand who is and who isn’t allowed to review their personal credit profile.

Here is an outline of the accessibility of your credit report to others:

Credit Card Companies

Since credit card companies offer lines of credit to consumers, they have a right to determine the risk you may present for defaulting on your legal obligations. The credit card company uses your credit profile and score to calculate a rate of interest on the card before issuing you credit approval. By signing the credit card application, you give Read more…

If you have been turned down for financing, you typically had to remain in the dark as a consumer when the rejection letter came. Consumers have a right to request a free copy of their credit report after being denied financing but were essentially left to their own devices when it came to figuring out why they had their application turned down.

However, starting this week, the Dodd-Frank Financial Reform Act will change the way rejections work. A new rule is being implanted that requires lenders to explain in greater detail why a consumer received a denial. Lenders are now required to display credit score information used to make the rejection decision. Consumers will be able to see their credit score range as well as the credit history data that was used in the decision process. The rule also allows consumers to be told about the factors that contributed to the decision, including negative information that affected the consumer credit score. The lender must also disclose which credit reporting agency provided the information.

On July 21, the new Consumer Financial Protection Bureau will officially launch and will be responsible for enforcing the new rules. Consumers will now have Read more…

Credit report disputes aren’t always successful. Sometimes you believe something shouldn’t appear on your report, but the bureau disagrees and continues to report the item you disputed. If you can’t get an item taken off your report, you can tell your side of the story.

Your Right to a Personal Statement

The Fair Credit Reporting Act, the law that covers credit report disputes, gives you the right to add a 100-word personal statement to your report. You can use this brief paragraph to explain why an entry is has been listed on the report. For example, a fraudulent account may have been reported in your name, but the bureaus refuse to remove it because the card issuer continues to say that it belongs to you. Your 100-word statement would explain the identity theft and state that you tried to dispute it but were unsuccessful.

Personal statements don’t necessarily have to explain errors on your report. They can also be used to explain why you fell behind on payments, e.g. a long period of unemployment or an injury. The personal statement can be used to explain that you aren’t a deadbeat and you have a legitimate reason for falling behind on your payments.

Make sure your personal statement doesn’t cast you in a bad light. You don’t want to say something like “I was young and didn’t realize late payments would affect me.” That type of statement probably won’t give the lender a good Read more…

Most consumers realize they have a credit score – a number that indicates whether you have good or bad credit. It’s a number creditors and lenders use to decide whether to approve your application and what interest rate to give you. But, there are several other scores businesses use that aren’t as publicized. Some of them are not even available for consumer use.

Behavior Score

Your credit card issuer has a wealth of information about your shopping habits and uses this information to determine just how risky of a borrower you are. Creditors may use your behavior score to determine your limit, to raise your interest rate, raise your annual fee, or cancel your credit card all together. Using your card at certain places, like pawn shops, can make you seem riskier.

Because card issuers don’t share the score, or the factors that influence the score, it’s impossible to raise your score. Cutting back on your plastic utilization used to share your behavior score can negatively affect you too – creditors may misinterpret the reason you’re using your credit card less.

Bankruptcy Score

Banks use your bankruptcy score to predict the likelihood that you’ll file bankruptcy in the near future. They may use your bankruptcy score to charge you higher Read more…

No matter the state of your credit history – good or bad – it’s important that you conduct a checkup periodically. A checkup not only helps you see how your standing is, but also helps you catch cases of identity theft and fraud before they get worse. When you apply for certain products and services, lenders and other businesses will check your credit report. So, it’s a good idea to know what’s on your report before it really matters.

Your credit history is made of two parts – your report and your score. Both of these are essential pieces of your  checkup.

Credit Report Checkup

By law, everyone has the right to a free credit report from each of the three credit bureaus – Equifax, Experian, and TransUnion – and AnnualCreditReport.com is the website to check them. You can order all three bureau reports at once, or you can order one every few months. Your reports are different from each other, so keep that in mind as you decide whether to get all three free reports at one time or stagger them.

Credit reports can also be purchased from the bureaus through their respective websites. You can even purchase a three-in-one credit report that compares your credit reports side-by-side. There are also third-party sources that sell single and three bureau credit reports.

Each time you check your credit report, you should review it to make sure Read more…

The PLUS Score may be an unfamiliar term for many consumers but it can be an integral part of repairing your credit and improving your knowledge as to how make your credit work for you. Experian, the consumer credit reporting agency, created the PLUS Score as a way to help consumers better understand how to manage and repair their credit scores.

The PLUS Score is consumer-friendly credit score that was created by Experian to help consumers understand what is having an impact on their present credit score. It PLUS model also provides detailed information about what consumers need to do in order to see their credit scores increase.

How PLUS Score Works

The PLUS Score is calculated from the data on an Experian credit report. The calculation is relative to the methods utilized by lenders when making credit decisions. The PLUS Score ranges from 330 to 830. Much like a traditional credit score, the higher a consumer PLUS Score is, the less of a credit risk they pose to lenders. While most creditors will pull a consumer’s FICO score when making decisions, the PLUS score can be Read more…