Credit Reports and Scores

If you are just starting out on your credit repair journey, one of the key elements of rebuilding your credit will be your close association with your credit history report. Some consumers have never even seen their credit history report let alone have an understanding of what is contained in the report.

For all intents and purposes, getting to know your credit report is a requirement of fixing bad credit. It is this report that will dictate the steps you need to take for getting better credit scores and reestablishing a solid credit history. Because your credit report plays a large part in your credit repair adventure, it may be helpful for you to understand where the data comes from.

Forming a Credit Report

From the very first time you open an account with a creditor, a credit profile is established on your behalf. Moving forward, your credit profile will continue to gather information from creditors and companies where you have current open accounts in addition to the accounts you have since closed from the past. It is your creditors including banks, mortgage companies, retailers, credit card providers, and collection agencies that provide the data pertinent to your credit report.

As you use your credit accounts, your creditors will report back to Read more…

If you have already begun the credit repair process, you may have noticed that different credit reporting bureaus provide you with a credit score that is rarely equal to the other agencies. Credit scores from Equifax, TransUnion, and Experian will all be reflective of your credit management abilities but it is unlikely they will ever be exactly the same at the same time.

Why Does This Happen?

Each credit reporting agency has a different method and different factor list for determining your three-digit credit score and there are several reasons why your individual scores from the three agencies will differ.

First, it is important to note that not all creditors will report your credit activity to all three of the reporting agencies. Some may choose to report to only one or two of the agencies so the third report would not have this particular creditor data considered as part of their scoring model.

Secondly, the inconsistencies in the credit score may be due to the changes occurring on any given day. Depending on how you use your credit, when you authorize a credit check and various other scenarios, your credit score may change from day to day if only slightly. Credit bureaus also do their credit file updates at different times so the addition of data can be reflected in credit scores. The small differences in your credit report may not seem significant but Read more…

You may be familiar with the information that matters to your credit repair tasks and credit score including on-time payments, amount of credit you maintain, the length of time since you established your credit account, and other financial factors. You may also know that your credit score is what lenders rely on to help them making big money decisions and allow them to approve (or deny) your credit application.

Did you know there are factors that are not included into your credit score calculation? While FICO, the company who created the three-digit number credit scoring system most often used by lenders to gauge credit worthiness, will not divulge exactly how their scoring system works mathematically, there are some things that are not factored into your score.

Here are ten personal financial pieces of information that is not a part of your credit score:

1. Your age – the only way your age is a factor in credit is potentially the amount of time you have had to establish credit accounts.
2. Your vitals – includes gender, race, nationality, marital status, or religion – It is against the laws in American to factor any of this data into a credit scoring system.
3. Your employment – includes where you work, your occupation, job title, employer, work histories, or salary.
4. Your location – includes your current address/location as well as your past information.
5. Your interest rates – includes your interest rates on credit cards and any other loans. Read more…

One of the biggest myths about credit scoring is that you only have one credit score. The truth is that you have several credit scores. While most people know about the FICO score because of it’s name and presence in the credit world, there’s another credit score to think about: the VantageScore.

The VantageScore was created by the three major credit bureaus – Equifax, Experian, and TransUnion. According to its website, the Vantage Score is used by the top five credit card issuers, four top banks, and two top auto lenders. This makes the VantageScore worth considering in credit repair. Read more…

Remember those FreeCreditReport.com commercials? You used to see them all the time when you watched television late at night. Now, you don’t really see them anymore. That’s because the federal government made it a rule that any website offering a free credit report had to include a prominent disclosure. The disclosure had to reveal that the true place to obtain your legally-free credit report was through AnnualCreditReport.com. Radio and television advertisements for free credit reports will soon have to do the same thing.

Those credit reports that used to be free, now cost at least $1. It’s how free credit report companies get around the government-required disclosure. However, it still stands true that the only place to get a truly free credit report is through AnnualCreditReport.com. Read more…