Establishing good credit There is a point in your life that it is required to move on from having no credit and building up a good credit score to secure your financial future. It makes no difference if you are trying to rent your first apartment of if you are applying for a loan to get something huge, you will have to have a good credit history for your name so that the person that you are working with will understand that you are reliable and very responsible for their investment. However, there are some people that do not know how to establish credit. Having bad credit is much worse than most understand. You can be denied loans and have trouble with some of the financial institutions because you will find that you are labeled as high risk. Identity theft is a very good reason for the false negative credit to your name. It is a bad circumstance but you should not think that anyone is going to go easy on you. If you put it all out there, you will not loan money to a friend that has been slow to repay others in the past. There are unreliable things that people will notice first and they will not care to hear the excuses no matter how good you think they are. The key is to be safe and to build credit without risking mistakes that will result in a bad credit history. For example, your parents could put one of their monthly household bills in your name while you are still going through school. If these bills are not paid on time, you will gain good credit. On the other hand, it is vital to understand that if you miss some payments, it is going to get you started off on the wrong foot. Another factor that plays into your worth to the creditors is to keep the same job for at least two years or longer and have the stable checking or savings account with a good bank are just a few things that you can do. You should also think about having a stable cash flow and responsibility with finances. You can make deposits and keep your balance at a positive number with a bank account and have a steady income show that you are not at risk for missing any payments or leaving town to avoid facing any collectors. Your address, bank, positive bill history, and employment information can be added to your credit report at your request if it is not already there. Your credit is an important part of everyone's life. Having good credit will help you in being accepted for automobile, home, and other loans. If your score is bad, you will often times be rejected for loans because you will be labeled as a bad risk and it is assumed that you may not be able to pay back the loan on time. Building good credit is going to be good when you do it early so that you can get a head start in the right direction for your financial future. Learning how to correct your credit rating If you are checking out your credit report and you see an error what should you do? There are things that you may not realize and this is going to happen all the time. There are mistakes that are accidental on your credit reports all the time. However there is something that you can do about it. Wrong numbers on your credit report may bring down your score and you should make sure that you get this fixed right away by contacting your credit agency. You do not have to pay a lot of money and see someone to get this fixed. You first have to get a copy of your credit report and circle any items that you think is wrong and make sure that you are inspecting it again very well to make sure there is nothing left out of it. The next thing that you need to do is write a letter to the credit agency and telling her of all the disputes. The address for the agency should be listed on the credit report. You need to be sure that you include all the copies of paperwork that is going to pertain to the disputes that you are reporting and that all of the documents that you are sending are copies and not the originals. You need to keep those for yourself. You should send this all by certified mail and get a receipt to be sure that it was shipped and it was received. It is up to the reporting agency to investigate your disputed claim and verify that there is a problem with the credit report information. If the creditor cannot prove that the information is correct, the entry must be removed with no questions asked. It is probably that it is just an error on their part and they will tell the reporting agency about it and it will be removed from your permanent record. Once the investigation is finished, and the changes are made, the agency will give you a copy of your credit report free so that you have proof of the changes that have been made. There are errors that will occur in all stages of life and there is no surprise to learn that credit reports are not any different. Keep your temper to a low and deal with the mistakes. Your credit agency should take care of this and help you with no problems. It is your responsibility to take care of your credit and to review all the paperwork that you receive all of the time. If you do not go over them you may not even know if your credit score is being affected by these false entries. Figure Your Credit Score You may want to know how your credit score is calculated. The process is long and each of the three major companies in the United States will participate in reporting credit scores and histories with a different method. This is why your credit score is going to be a little bit different from one to the next. There are some factors that you can take into consideration if you want to estimate your credit score on your own. The first thing is if you have not ever owned a credit card or had any type of bill in your name or if you have borrowed money of any kind, your credit score is going to be zero. Even though this is not considered to be bad credit, it is hard to even get a loan with no credit as it is with bad credit. There are some companies that may be willing to take a chance on someone with no credit but it is much better to build up your credit little by little as you go by having cards in your name and living a comfortable and stable life within your means of income. Your credit history is going to make up about 35% of your total credit score and it is very important. The bills that are not paid or if you have debts that have defaulted you will hurt your credit score for 7 to 10 years before they are all erased. You need to think about this and all of the bad choices that you make today can hurt your credit in the future. If you are repaying these debts now, chances are they will still show up on your credit report now as bills that were paid late. There is 15% that is going to be the length of your credit history. It is a good idea to start building credit as soon as you can. Your score is will improve as time goes on as long as you are maintaining a bank account. The information like length of employment or residence so that it can be classified in this section so if you have a regular and stable life, you will have a better score than someone else that moves around all the time. Then 30% of your score will depend on what you are currently owing to creditors. Even if you are not late on paying your bills, if you have many loans out at one time, it may be possible that you are denied to have another. Therefore it is important to only take out the loans you really need and to repay them on time or early if you can. If you pay off your loans early, you will not only see your credit score rise, you will also save money on paying interest. This will show up on your credit history. You will also want to try and keep your money in one place if possible. 10% of your credit score is going to be based on new accounts. They will look at how many different types of loans you have applied for and how many you have open now. When you are opening and closing accounts too fast is not a recommendation. You need to use your common sense. Know your credit score and how it is calculated is going to help you find mistakes on it. This may help you and your credit score in the future. You are able to see a free copy of your credit report annually for free so you should review this as well as get your credit score to be sure that you are being treated fairly. Getting Help: The Best Things About Credit Counseling Sometimes we cannot keep a good credit score all the time on our own. There are times in life when we may need to have a little bit of help keeping our credit score at a good level or raising it to a level that we want it to be at. Thank goodness that there are organizations out there to help us to do this and keep our credit on track where it should be. Debt counseling is for anyone that may have bills that are scattered with different companies and find it hard to keep up with all of them from month to month. It can be hard to remember who you have to pay each month and how much. There is debt counseling to help put all of your bills into one low payment so that you can make your payments to one company and they will distribute the money to where it needs to be. This will take all of the guessing out of paying your bills. Now the payment will be lower because the debt counselor will work with all of the companies that you owe money to so that they can accept the lower amount of money each month. This is not for everyone however, and the fees and interest rates are going to be high. After you consolidate your bills into one payment it should only take two or three years to pay them off. If it would take more than five years to pay these debts back, you may want to think about it more because it may not be the right option for you. There are a few different reasons why debt counseling will increase your credit score. Making the payment before it is actually due then you are paying all of your bills at once. Credit companies will see this on your credit report and reward you for being more responsible and paying your payments on time. This is true even though they are consolidated into one payment because everyone is still getting their money on time. Many will believe that consolidating your bills will decrease your credit score, but this is not the right idea. Many think that this is a major reason for concern but it is actually helping people out. It may have been a risk in the past, but there are many legitimate companies out there that are going to help you rebuild your credit score. Using the debt counseling for your debt is actually very responsible and will benefit you in many ways. It is a good idea to do when you are looking to get out of debt and get things back on track for you and for your credit reputation. Identity theft and your credit history You should know that identity theft has become worse with the major problem of shopping online. There are sammers that are setting up clone web sites like the ones that are very popular to make purchases so that they can fool you to enter your personal information. You can also have your personal information stolen by not disposing of bank statements and other pieces of mail properly. You need to shred anything that has your personal account information and social security number immediately. This will help protect your identity and your good name as well. Any woman that knows that it is very scary to have your purse stolen. This is going to cause a dreaded nightmare. You will end up losing your money and all of the things that are in it. You will have to get all of your personal information cards cancelled or replaced. You will have to have your debit account closed or changed. You do not want your bank account to be completely emptied by someone that has your debit card number. If you do not freeze your accounts and stop this from happening you will be broke. The other important things that you will need to do are to file a report with the police and place an initial fraud report on your credit report. You will be taking a chance anytime that you give your personal information on the phone or Internet. Before you enter your personal information like your credit card number to make a purchase, make sure that you check the web address to be sure that you are on the companies official web site instead of a fake clone with the same appearance but with a very wrong address. This is something that is often not taken into consideration and many thieves have exploited this issue too many times. If you see this happening, you should report the fake site to the official site and this can help to prevent any other person from fraud by this company. This is going to help save your own credit and keep you save from anyone that is looking to take over your identity. The right thing to do id you feel that you are a victim of identity fraud is to get an very accurate credit report and look for the activity that you are sure of that is not yours. In the event that you do find a new account is open or activity is not anything that you did contact the companies and try to get the signatures that was made by the thief. The faster that you do this means that you will find it easier to keep your credit report safe and unharmed. Make sure that you are taking note of every action that you take and make sure that you are asking many questions about your credit score to make sure that is all correct as it should be.
Avoiding online free credit scams The government passed a law that allows every citizen to get a free annual credit report a few years ago. This law states that they can get their credit history because of the recent increase in identity theft. This free credit report is easily available online and will give you reports from all three of the credit reporting agencies. A credit score is not going to be provided in this instance for you to view. This is a very popular new law and there are many con artists and identity thieves that have come about and starting their own credit report web sites to scam you. They are making money off of this new law that is supposed to protect you. There are over 100 free credit report web sites that will help you online right now. There is one good web site that will help you get a real free credit report online and that is HYPERLINK "http://www.annualcreditreport.com" www.annualcreditreport.com The free credit report scam is usually going to charge a "small fee" to get what is a free credit report. There are also fake free credit report web sites that will take down your information and ask for your social security number or they will ask for your credit card information. With this, anyone can steal your identity and spend money on your accounts that will ruin your credit. You can find these scamming web sites in different ways. Most of the scam sites have a similar name as the official free credit report web site but you can figure out the difference because these sites often have misspelled works or typos in them. This means that there may be a period of out place. Also most of the web sites will charge you a fee to get the report and remember that you are able to receive one FREE credit report a year. This is true even if they ask you for your credit card information and state and they will not charge you this is something to take note of and be very cautious of. If you get an email of some kind of sales be sure to read the fine print very carefully before you respond. Some have found that certain web sites or sales do offer a free credit report but you have to enter your credit card information and if you do this, you will authorize them to charge your card for credit monitoring services. You need to remember to get your free credit report either online or at the above mentioned site or phone or mail. You can also make contact of the three national credit report agencies such as Experian, Equifax, and Trans Union and they can also point you in the right direction to keep a your credit on track. Credit and the Law The Equal Credit Opportunity Act says that all lenders will apply the same credit standards to all the consumers no matter what their race, sex, marital status, national origin, religion, age, or public assistance program that is involved. This does not say for sure that the loan approved or credit will be given to you. It will give you an equal chance to obtain credit. The only good measurement for creditors to use is your ability to pay the debts that you owe. Many of the applications will have questions about some of the above things. However you are not required to answer them on an application for credit. These may be asked because of the fair housing laws or affirmative action laws but these are at your discretion. You should not be asked about your material status, unless your partner will help you secure the loan. You may be asked your age because of the Equal Credit Opportunity Act, but only to determine if you are old enough to have the credit. This means that you have to be over the age of 18 in the U.S. Creditors must tell any applicants of their decision within 30 days. If the application is not approved, the creditor must provide a written statement that has full detail of the outcome or decision along with the reason for the denial and the information on the applicant's rights. This act will help to seal for certain it is kept with all applications for credit no matter who the applicant is. The Fair Credit Reporting Act will also give people the right to see their credit report. To make this better, everyone is entitled to a free credit report every 12 months. This act will help people to receive their credit history for all three national credit-reporting agencies. When you are reviewing your credit, you can dispute items on the credit report and this will allow the consumer to control some of what the credit reporting agencies have against them. If the correction to your credit in not right, you can also add a statement of 100 words or less to help clarify the item that you want to dispute. The act was started to uphold the accuracy and privacy of a person's private information in the credit report. It was passed with the intention of preventing identity theft, which has become more popular in recent years. By reviewing one's credit report each year, he or she will be able to determine if any kind of identity theft has happened. Both of these acts will protect you by helping the fairness of the lending industry while allowing you to take control of your credit history and making sure that it is accurate. If you want to maintain good credit, you need to learn as much about it as you can. Understanding these laws means that you are taking a good and positive step in creating good credit for yourself and making it possible to have a more stable financial future. Stopping those creditors from calling If you are having trouble maintaining good credit, you might find yourself being irritated by phone calls from the collection agencies. If your debt has been handed over to one of these agencies, you already have a black mark put on your credit report. However it is important to know your rights when it comes to being in debt. Phone calls from the collection agencies are unethical and if you understand the laws regarding good credit, you can protect yourself from the problems and all the illegal doings of these companies. The most crucial law to know and review if you think that you are being treated badly is the Fair Debt Collections Practices Act, or FDCPA. This is a law that will give you all the information that you may need so that you understand if that company is doing something wrong. If they are not, contact your government officials and police to file a compliant. The first thing that you should understand that you have 30 days to review the debt that they are putting upon you. You should know that people do make mistakes, so this is a 30 day grace period that will give you enough time to make sure that it is all correct and in order. Before this, the debt collectors should not start to all you and harass you by phone or any other form of contact. After the 30 days are up, your phone may start to ring so much and this is going to be the collectors calling you to pay your bills. Be aware that what they are saying is not only unethical it is also against the law. The debt collector may not threaten you with anything that he or she says. They do not have the power to do this. For example, bill collectors cannot threaten to use your lack of good credit to ruin your reputation and tell others like your friends, boss or employer about your debt problems. Most cases the collector may only share the information about your debt with you and your spouse and the lender. Anything else is a violation and you can have the opportunity to sue a collection agency if they tell any of this private information to anyone other than that. The collector cannot threaten to ruin your credit history. This is a very unacceptable threat. The damage is already been done to your credit report. Debts are not allowed to be reported for 7 to 10 years and this will depend on your credit-reporting agency. The federal law does not allow a collection agency to further ruin your credit in any other way. If they threaten this, or to tell anyone about your debt, the collection agency is in violation of the FDCPA and it is your obligation to report the agency to the authorities. A collector cannot threaten to arrest you or garnish your wages in any way. The only thing that a collection agency can do is taking you to court. If they are threatening anything other than this, you should not only get off the phone, you should also call the police and they will assist you in filing an official complaint. Having good credit is on the line and if a collection agency is not doing their job right, they could be mis-reporting your debt as will. You need to know your rights and protect yourself too. Using a Co Signer to Boost your Credit Having a co-signer on a loan application can either be a good thing or a bad one. This can be anyone that you know like a friend or family member who agrees to share the responsibility for repaying the loan if you cannot make the payments for some reason. Usually it is a parent that will co-sign for a child who has no credit or low credit. It can be a good way to build your good credit up and get the results that you are looking for. In other cases, the co-signers good credit may help someone with poor credit get a loan that they would otherwise be denied for. We all start out with a credit score of 0. Having no credit score is almost as bad as having a bad one. There is no record of your credibility, which is not very convenient if you are a young adult trying to get a loan for a home or car or college education. There are parents or guardians who will understand the meaning of having credit will put their child's name on a utility bill and let theme make payments from a job or pay for it themselves. As long as the bill is paid in full and on time, it will put a positive reflect on the person's credibility. It will be a lot easier to move into the adult work of making a large purchase like a first home when you have good credit to your name. For the person that has managed to make a bad name for himself or herself in the world of credit and they are in need of a loan, they may have to rely on a co-singer to help them out of this jam. No one wants to be in debt and a family member or friend will be more understanding than the institution from where you want to borrow the money. A co-signer must have a good credit score and they must be willing to take over the remaining money that is owed on the loan for any reason if the primary borrower cannot make payments. If you are in debt and you cannot seem to get a break, a co-signer could be what you are looking for. No matter what your reason for bad credit, it is up to the lender to approve or deny you based on the facts of your credit report. As long as you know someone who has good credit and enough trust in your ability to repay the loan that you are looking for, you may have a good chance to get back to where you want. A co-singer is a good way to establish or re-build good credit for you. Using Credit Unions and you credit A credit union is a good organization that is for individuals based on where they live or where they are employed. It will work in the same ways as most banks but offer loans that are more exclusive to their members and offer a better and much lower interest rate. Those who deposit the money are able to borrow money because the members run it. This is the best place for someone to earn a stable paycheck but is somehow managed to accumulate bad credit because of sometimes the community will base it on their character and not on their creditability. A bank can turn you down easily if your credit rating is not good but with a credit union you will have the chance to explain what you want before you are approved or denied. You can benefit financially because you are a member of the credit union. A savings account with a bank will accumulate interest over time. It is set by the percentage of what your balance is over time. Credit unions will pay higher interest to their members and the interest rates on any loan are going to be lower as well. Any profits that are accumulated will go into serving the members better because it is a non profit organization that is ran by volunteers in the community only. There are different ways of finding out which credit unions are available to you with your employment, residence, or what your part is in an organization. If you have a stable job, you can ask your employer if there is one that you are able to get based on your involvement with the company. There may also be a member of your family who belongs to a credit union that encourages members to have their entire family members join. In most areas, you may be available to join because of where you are living. It is viewed as a way for the community to work together as one to take care of all the members. Everyone needs to be a member of a financial institution in order to get and build up good credit, gain eligibility, and to take out a loan if it is needed. They will also be able to have a reference of stability on his or her credit report. Many people will want to use the credit unions over banks because they are friendlier and locally ran by members of the community. They are non-profit so you will not have to pay a fee to be a member and take advantage on the positive things that they offer. They will give anyone who has bad credit a chance to be eligible for loans and rebuilding their credit score.
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