If you have made financial mistakes in the past, you may find it difficult or even downright impossible to open a checking account. If you find yourself in this position you may be wondering what you can do about it. After all, it can be very hard these days without a checking account to pay bills with.
Before you can start fixing the problem, it is important to understand what the real issue is. Many people think the problem lies with bad credit, but that is not the whole truth. The mistakes you may have made in the past may have resulted in a bad credit score, but the truth is that banks do not, and cannot, use your credit report when making a decision to allow you an account. Instead they have their own sort of agency that maintains a list of people who have written bad checks, and/or have unpaid fines or fees due to a bank. This company is called ChexSystems and if you have gotten on this list for any reason, you will find it very hard to open a checking account at a major financial institution.
If you are reading this article then you probably find yourself in that position. So then the question is; what can you do to acquire a checking account?
When approaching this problem you essentially have two options.
Option #1 - Work With the Bank
This is the more difficult option but is often worth the extra effort. What you need to do, essentially, is convince the bank to give you an account. This is easier than it sounds. You will need to actually visit the bank and speak with them in person. The goal here is to sell yourself and if you have a good stable job, then that will help. If you can provide direct deposit that can often push things over the edge. If that isn't enough, and you really want to deal with that bank, then you will need to provide some security to the bank. None of this is a guarantee but the lower the risk you are to the bank the better. Ask the bank if they will give you an account if you secure it with a deposit that they hold, or perhaps with a 6-month or 1 year CD.
This is the preferred option in my opinion. The advantage to this option, and why I recommend it, is because it can allow you to be more flexible. By this I mean you can quite possibly open an account at a major local bank rather than being forced into a lesser known, or inconvenient bank.
Option #2 - Non ChexSystems Bank
If option one doesn't work for you then your only other choice is to find a bank that doesn't use ChexSystems. There are banks out there, but you will need to do some research. When you are looking for a bank under this option then it is important to protect yourself. Don't be so focused on finding a bank that you get taken advantage of. Here are a few things to watch out for.
Banks Requiring a Direct Deposit
If you want to do a direct deposit, then that is your choice, but be wary of a bank requiring you to do this in order to open an account.
Extra or Unfair Fees
Sure banks charge fees, but watch out for banks that are charging extra fees just because you are in a bind. Do your research and see what sort of fees are generally charged by local banks in your area, and then when shopping a non-ChexSystems bank don't let them charge you differently.
Thursday, August 30, 2007
Tuesday, August 14, 2007
Guard your credit from Identity thieves
On raise-your-credit-score.blogspot.com, my goal is to assist you in repairing credit problems. I offer tips and strategies to be successful in repairing various problems. One bit of news that has cropped up as of late is identity theft. This has become a serious problem in our society, such to the point that it needs addressing on this blog.
We as a society have now become dependent on information. Some of the largest and most successful companies in America today are based upon the decimation of information. In fact, your credit report is nothing more than a collection of information about your financial history. This being said, with the growth of our use of information, has brought about the increase in opportunities for that information being compromised.
The US Justice Department website describes identity theft as the following,Identity theft and identity fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person's personal data in some way that involves fraud or deception, typically for economic gain.
"...wrongfully obtains and uses another person's personal data.." Here is the crux of how identity thieves operate. They wrongfully obtain your credit information and use it for their economic gain".
The sole purpose of identity theft is to misuse the data compromised for personal gain. Plain and simple. Thieves have no good intentions when it comes to your information. This is why it is necessary to take specific actions to guard your credit information. Treat your credit information as if you were protecting national security secrets. It may sound a bit over the top but this advice with save you tons of problems caused at the hands of a mischievous identity thief.
We as a society have now become dependent on information. Some of the largest and most successful companies in America today are based upon the decimation of information. In fact, your credit report is nothing more than a collection of information about your financial history. This being said, with the growth of our use of information, has brought about the increase in opportunities for that information being compromised.
The US Justice Department website describes identity theft as the following,Identity theft and identity fraud are terms used to refer to all types of crime in which someone wrongfully obtains and uses another person's personal data in some way that involves fraud or deception, typically for economic gain.
"...wrongfully obtains and uses another person's personal data.." Here is the crux of how identity thieves operate. They wrongfully obtain your credit information and use it for their economic gain".
The sole purpose of identity theft is to misuse the data compromised for personal gain. Plain and simple. Thieves have no good intentions when it comes to your information. This is why it is necessary to take specific actions to guard your credit information. Treat your credit information as if you were protecting national security secrets. It may sound a bit over the top but this advice with save you tons of problems caused at the hands of a mischievous identity thief.
- Make sure that you take the proper precautions to dispose of mail that may have your information on it.
- Be weary of who you give your personal information to over the telephone.
- Always be cautious about what website that you give your credit card or any information to over the Internet.
- Immediately report to your creditors lost or stolen credit cards and other credentials that may have compromised your credit information.
Saturday, August 11, 2007
Credit Ability & Buying the Perfect House or Car: Great Links
Here is a site that offers some addition information on getting what you want and raising your credit score.
Credit Ability & Buying the Perfect House or Car: Great Links
Credit Ability & Buying the Perfect House or Car: Great Links
Tuesday, August 7, 2007
Can Bad Credit Be Deleted?
Yes, it can. Despite the fervent proclamations of bureaucrats and credit bureaus everywhere, a simple fact remains: negative credit listings are deleted from peoples' credit reports by the thousands each and every day.
A few years ago, an attorney from Lexington Law. visited with a regulatory agency for a casual conversation with two agents. The Agency's office, as a matter of course, believed the credit bureaus' claim that bad credit couldn't be deleted. The visiting Lexington attorney asked, "How many negative listings would you have to see deleted from consumer credit reports before you would believe that bad credit can be deleted: ten? fifty? a hundred? one thousand?" The agents responded with only blank stares.
"How about 50,000 deleted listings, would that convince you?" continued the Lexington attorney. From his briefcase he pulled a stack of papers six inches high.
"In these pages, we have listed the permanent deletion of over 50,000. listings from our clients' files in the last two years alone," he explained. The agents pulled the stack across the conference table and began to pick through the pages, taking in the massive list.
"There's one deleted bankruptcy... and, there's another,... and another,... and another. Should I go on?" asked the Lexington attorney.
The agents sat back in their chairs. "You know," began the junior agent, "I have this one listing on my credit report that simply must belong to somebody else..."
How is credit repair possible?
Repair my credit score fast?
Repairing your credit score quickly is always a goal of an individual who has a low credit score. In an effort to improve their credit score individuals have sought out all kinds of dubious methods of raising their credit score. I want to reiterate a point made in one of my previous post. Using credit cards as a means of increasing your credit is not a sound method of improving your credit score.
Raising your credit score is something that takes place over a course of time. The people who are attempting to do so are patient. We have established in previous post that credit scoring occurs over a thirty day time period. So usually what you do today, will not be reflected for at least thirty to sixty days in the future. So hence the need for a long term view of improving your credit score.
Many individuals with poor credit tend to last the discipline necessary to properly manage their finances. Placing a credit card with very high interest rates and fees in the hand of such a person is not in that persons' best interest. Usually what tends to occur is that individual begins to use the credit card for other means. Only incurring more debt. Placing themselves in a greater hole.
Also, lenders tend to realize that credit card companies will begin to issue cards to individuals who are not necessarily in the best financial shape. Credit cards issued also are likely to have very small balances of less than $1000. With this in mind, lenders like to see credit established along the lines of an automobile, mortgage or personal loans.
What is needed is a better way of raising the credit score. Hopefully, I have made the case, that credit cards are not the way. In future posts, I will show you ways to improve your credit score without using methods that are suspect at best.
Raising your credit score is something that takes place over a course of time. The people who are attempting to do so are patient. We have established in previous post that credit scoring occurs over a thirty day time period. So usually what you do today, will not be reflected for at least thirty to sixty days in the future. So hence the need for a long term view of improving your credit score.
Many individuals with poor credit tend to last the discipline necessary to properly manage their finances. Placing a credit card with very high interest rates and fees in the hand of such a person is not in that persons' best interest. Usually what tends to occur is that individual begins to use the credit card for other means. Only incurring more debt. Placing themselves in a greater hole.
Also, lenders tend to realize that credit card companies will begin to issue cards to individuals who are not necessarily in the best financial shape. Credit cards issued also are likely to have very small balances of less than $1000. With this in mind, lenders like to see credit established along the lines of an automobile, mortgage or personal loans.
What is needed is a better way of raising the credit score. Hopefully, I have made the case, that credit cards are not the way. In future posts, I will show you ways to improve your credit score without using methods that are suspect at best.
Sunday, August 5, 2007
Credit Cards: Leverage or lepor?
When discussing good or bad credit, invariably the conversation will turn to the role of credit cards. Overall, credit cards are a necessity in today's society. If you wish to do most types of transactions, credit cards are vital to completing the process. You would need a credit card for every purpose from securing a hotel room to renting an automobile. So credit cards are not all bad.
The problem for individuals with bad credit is in how they use credit cards. First, many of the credit cards that target those with bad credit tend to have some of the highest interest rates in the credit card industry. Companies such as Capital One, Orchard Bank (which is a card issued by HSBC) and First Premier are make have huge market share in the bad credit area. They each also have some of the highest interest rates and fees of any card issuer.
Also keep in mind that the fees are also front loaded with many of these cards. Some of the fees in which they charge are a "processing fee, account set up fee, program fee, annual fee and monthly servicing fee". Cardholders of these cards are shocked to find out when they get their first monthly statement that their balance is usually about $125-200 even before they use the card! Talk about robbery!
If your credit has some bumps and bruises, you might not want to acquire one of these cards at this very moment. Allow a few more months of rebuilding your credit (following the strategies provided on this site) in order to shop for a better credit card issuer. Time is always on your side.
In the end, a credit card is only as good as the individual using it. If you are wise in the use of your credit card to secure certain transactions as mentioned earlier, I do not see any problem. The trouble for most people with poor credit usually stems from using a credit card as a substitute when you are out of cash, e.g. dining out, movies, luxuries and pleasure items. If you are that type person; that is not the proper use of a card.
The problem for individuals with bad credit is in how they use credit cards. First, many of the credit cards that target those with bad credit tend to have some of the highest interest rates in the credit card industry. Companies such as Capital One, Orchard Bank (which is a card issued by HSBC) and First Premier are make have huge market share in the bad credit area. They each also have some of the highest interest rates and fees of any card issuer.
Also keep in mind that the fees are also front loaded with many of these cards. Some of the fees in which they charge are a "processing fee, account set up fee, program fee, annual fee and monthly servicing fee". Cardholders of these cards are shocked to find out when they get their first monthly statement that their balance is usually about $125-200 even before they use the card! Talk about robbery!
If your credit has some bumps and bruises, you might not want to acquire one of these cards at this very moment. Allow a few more months of rebuilding your credit (following the strategies provided on this site) in order to shop for a better credit card issuer. Time is always on your side.
In the end, a credit card is only as good as the individual using it. If you are wise in the use of your credit card to secure certain transactions as mentioned earlier, I do not see any problem. The trouble for most people with poor credit usually stems from using a credit card as a substitute when you are out of cash, e.g. dining out, movies, luxuries and pleasure items. If you are that type person; that is not the proper use of a card.
Having Good Credit in America Pt 2
Raising your credit score to a high limit is a task that requires that the individual makes certain commitments. In my previous post, I discussed how you are going to raise your credit. Well, in this post I have an example that comes close to heart. My sister and brother in law desire to purchase a home in the next few years. Here credit was decent and fair worst. The main problem was high credit balances which were hampering them from doing the things that were necessary to be successful.
For those of you who do no understand credit; it is like your Grade Point Average in school. Something which is easy to drop and very difficult to raise. Fixing your credit will require you to make certain sacrifices that will ultimately result in a better overall credit report. Many individuals who succumb to the challenge, simply lack the resolve necessary to put into action a plan which will give a boost to a low credit score or strengthen an already good score.
What will it take to be successful? First, you must obtain a copy of your credit report from one of the credit bureaus. It is not necessary to get all three at once. Remember from our Part 1, we said that you the plan is to order one credit report from one of the credit bureaus every four months so you will have a snapshot of your finances over the course of the entire year. All of this is what my sister put into action.
Secondly, the plan to raise her credit included gathering all of her credit cards and transferring them to a lower balance credit card. You can usually find a zero to low interest rate credit card when doing a balance transfer. As my sister Sylvia did, you are going to now hunker down and pay off that credit card before the honeymoon period expires! In essence, you will find a credit card company that will give you the lowest possible interest rate in order to nullify the interest rate in your quest to pay off the plastic.
Meanwhile, you will not apply for any new credit of any type. No gift cards, charge cards, reward cards,etc. Your lifestyle for a time period may be disrupted. As your plan develops, your automobile is the next item to take a look at knocking out. If you are financing as opposed to leasing your vehicle, continue to drive that vehicle. My sister and brother in law always drove late model vehicles. This time, she kept the goal of building her credit in front of her and kept her current vehicle which is now paid off.
Rebuilding your credit takes time and effort. It requires dedication to a plan for a period of time between six months and two years depending on the severity of your poor credit. For those of you who do not understand, high credit balances is also considered poor credit. It demonstrates to a lender that you are may be either just treading water or all together over your financial head.
In my next installment, I will conclude this series with how my sister repair and rebuilt her credit.
For those of you who do no understand credit; it is like your Grade Point Average in school. Something which is easy to drop and very difficult to raise. Fixing your credit will require you to make certain sacrifices that will ultimately result in a better overall credit report. Many individuals who succumb to the challenge, simply lack the resolve necessary to put into action a plan which will give a boost to a low credit score or strengthen an already good score.
What will it take to be successful? First, you must obtain a copy of your credit report from one of the credit bureaus. It is not necessary to get all three at once. Remember from our Part 1, we said that you the plan is to order one credit report from one of the credit bureaus every four months so you will have a snapshot of your finances over the course of the entire year. All of this is what my sister put into action.
Secondly, the plan to raise her credit included gathering all of her credit cards and transferring them to a lower balance credit card. You can usually find a zero to low interest rate credit card when doing a balance transfer. As my sister Sylvia did, you are going to now hunker down and pay off that credit card before the honeymoon period expires! In essence, you will find a credit card company that will give you the lowest possible interest rate in order to nullify the interest rate in your quest to pay off the plastic.
Meanwhile, you will not apply for any new credit of any type. No gift cards, charge cards, reward cards,etc. Your lifestyle for a time period may be disrupted. As your plan develops, your automobile is the next item to take a look at knocking out. If you are financing as opposed to leasing your vehicle, continue to drive that vehicle. My sister and brother in law always drove late model vehicles. This time, she kept the goal of building her credit in front of her and kept her current vehicle which is now paid off.
Rebuilding your credit takes time and effort. It requires dedication to a plan for a period of time between six months and two years depending on the severity of your poor credit. For those of you who do not understand, high credit balances is also considered poor credit. It demonstrates to a lender that you are may be either just treading water or all together over your financial head.
In my next installment, I will conclude this series with how my sister repair and rebuilt her credit.
Saturday, August 4, 2007
Get a dramatic boost to your credit
Your credit report is a snapshot of your entire financial and credit history. It will tell everything from where you live to who is your employer. Your credit report will show how you have handled your finances. Companies, known as credit bureaus, compile every bit of data regarding your credit life and sell it to businesses worldwide. So you now see how important it is to maintain good credit.
Because your information is distributed so widely to those seeking to make a business decisions based upon you credit, in accordance with the Fair Credit Reporting Act (FCRA). Consumers are advised to take every effort to protect their credit as much as possible. It is critical to your overall financial health.
Getting Your Clean Credit Report
In the event that you are denied credit, insurance or employment due to what was provided by a CRA, the FCRA states that you must be supplied with a copy of the information used against you. As long as that request is made within sixty days.
Since the law states that each individual has a right to a copy of their credit report once a year, you simply need to contact the credit bureaus to request a copy.
The three major national credit bureaus are:
Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111.
Experian (formerly TRW), P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397-3742).
Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 916-8800.
The first step in raising your credit score, is to write the bureaus and outline what you believe to be inaccurate in your credit report. Provide the bureaus any information that is pertinent to your case. Remembering to keep originals and make copies of the letters disputing the information.
The credit bureaus must re-investigate each incident within thirty days. The only time they do not have to investigate your claims if they believe that the dispute that you are making is without merit. During the time of the investigation, all disputed items must be removed from the individuals' credit report. If this information is not investigated and responded to within the given time frame, the item disputed must be removed. Whether it is accurate or not.
With these items removed or corrected, your credit in a matter of months will shoot up! I have seen situations in which an individuals' credit has soared as much as 100 points in a short period of time.
Having Good Credit in America
Having a high credit score in America is one of the most important benefits of living in a consumer economy that you could possess. I make this statement after having numerous conversations with individuals that do not have stellar credit scores.
The United States and its economy system is fueled by commerce. This is as plain a statement that I could make in describing our system. Many Americans tend to take this for granted. Products of any and every type are constantly being blasted across every type of media outlet to coax you into purchasing that "must have" item. I want to put commerce and personal credit into a different light. How does having bad credit affect the way you live in a market based economy? Its easy to see the benefits of good credit, but what about poor credit? Maybe, you will see how it affects you and take measures to fix credit problems that hamper your life. The many tips and strategies that I suggest are sound and time tested means to improve your credit score over a course of time. Repairing bad credit takes both time and effort. When I am done, hopefully, you will have a much better understanding of the need to rebuild your credit. I will include the efforts of my oldest sister who gave me a real life example of boosting her credit to a limit that allowed her and my brother in law to do some remarkable things.
Simply put, the 3 credit bureaus (Equifax, Trans Union and Experian) can be your best friend or worst enemy in your efforts to fix your credit. The first step in becoming a gold plated citizen is to contact the three bureaus for a copy of your credit report. The law now allows you to obtain a free copy of your credit report one time per year. Since each credit bureau usually have the same information reporting, I want you to stagger your request over a four month period in order to get the greatest benefit from their service. This will allow you to see the progress that you are making in repairing your credit.
After reviewing the symptoms its time to make the diagnosis. Usually a person with poor credit will possess certain problems which include: late payments and high balances. Something that can be cured, but will require diligence on the part of the individual. You will than select one or all the items that you can pay off in the next couple of months. I find that many individuals with bad credit have nagging problems such as judgments and liens for small amounts that total less than $1,500 that can be resolved. Once these "small thorns" are addressed, you will begin to see some success in your credit efforts.
In Part 2, I will discuss some of the benefits that you reap from having a good credit score in a market based economy.
The United States and its economy system is fueled by commerce. This is as plain a statement that I could make in describing our system. Many Americans tend to take this for granted. Products of any and every type are constantly being blasted across every type of media outlet to coax you into purchasing that "must have" item. I want to put commerce and personal credit into a different light. How does having bad credit affect the way you live in a market based economy? Its easy to see the benefits of good credit, but what about poor credit? Maybe, you will see how it affects you and take measures to fix credit problems that hamper your life. The many tips and strategies that I suggest are sound and time tested means to improve your credit score over a course of time. Repairing bad credit takes both time and effort. When I am done, hopefully, you will have a much better understanding of the need to rebuild your credit. I will include the efforts of my oldest sister who gave me a real life example of boosting her credit to a limit that allowed her and my brother in law to do some remarkable things.
Simply put, the 3 credit bureaus (Equifax, Trans Union and Experian) can be your best friend or worst enemy in your efforts to fix your credit. The first step in becoming a gold plated citizen is to contact the three bureaus for a copy of your credit report. The law now allows you to obtain a free copy of your credit report one time per year. Since each credit bureau usually have the same information reporting, I want you to stagger your request over a four month period in order to get the greatest benefit from their service. This will allow you to see the progress that you are making in repairing your credit.
After reviewing the symptoms its time to make the diagnosis. Usually a person with poor credit will possess certain problems which include: late payments and high balances. Something that can be cured, but will require diligence on the part of the individual. You will than select one or all the items that you can pay off in the next couple of months. I find that many individuals with bad credit have nagging problems such as judgments and liens for small amounts that total less than $1,500 that can be resolved. Once these "small thorns" are addressed, you will begin to see some success in your credit efforts.
In Part 2, I will discuss some of the benefits that you reap from having a good credit score in a market based economy.
Thursday, August 2, 2007
The Subprime woes
The recent problems with the Stock Market remind me of the importance of having good credit. During the mortgage refinance boom of a few years ago, lenders sought various ways to increase their market share. One such method was to attract the individual who up until than, had been ignored, the subprime borrower. Subprime borrower generally could be identified as having certain financial characteristics. These credit qualifications included:
It did not take much to see how this was paying with fire. Providing mortgage loans to individuals who had previously demonstrated that they were risky for a reason. This house of cards did not take long to begin to crumble. New Century, a mortgage lender who specialized in loans to subprime borrowers, was the first to feel the heat. Its earning reports showed a high number of its borrowers had defaulted on their loans. Other lenders began to experience the same problem as interest rates began to climb. Finally, Countrywide Mortgage, a leader in the industry had finally announced that many of its none subprime borrowers were defaulting! This was a final nail in the coffin of the industry. One of the top lenders in the industry was having problems with its less riskier borrowers! This has resulted in the current state of the stock market.
I wonder how many of these lenders could have avoided this problem had they kept to their own lending practices. Credit scores and qualifications are set to a certain standard for a reason. These lenders would have been wise to stick to their own best practices.
- Late Mortgage Payments. How has the borrower repaid their current mortgage. Usually a subprime borrower has multiple mortgage payments that have been made beyond the thirty day period with a certain period of time. Typically, within the last twenty-four months.
- High debt to income ratios. This would be the relationship between the amount of debt that is being reported on their credit report to the amount of income that that individual produces. Usually, anything over fifty-five percent is considered above industry standards.
- High credit balances. Borrowers who typically have credit problems are unable to properly manage their finances. The balances on the loans that they do possess usually are at a higher limit, signaling to the creditor that they may be having trouble making payments.
It did not take much to see how this was paying with fire. Providing mortgage loans to individuals who had previously demonstrated that they were risky for a reason. This house of cards did not take long to begin to crumble. New Century, a mortgage lender who specialized in loans to subprime borrowers, was the first to feel the heat. Its earning reports showed a high number of its borrowers had defaulted on their loans. Other lenders began to experience the same problem as interest rates began to climb. Finally, Countrywide Mortgage, a leader in the industry had finally announced that many of its none subprime borrowers were defaulting! This was a final nail in the coffin of the industry. One of the top lenders in the industry was having problems with its less riskier borrowers! This has resulted in the current state of the stock market.
I wonder how many of these lenders could have avoided this problem had they kept to their own lending practices. Credit scores and qualifications are set to a certain standard for a reason. These lenders would have been wise to stick to their own best practices.
Wednesday, August 1, 2007
Reasons to maintain a high credit score
Here is the importance of having good credit. There is not a company in today's
economy that will not review your credit before they approve an application for
credit. Many of these creditors have a minimum credit score to even start the
process of opening an account. Usually you must meet a certain credit score
along with various other criteria in order to proceed with the process. This should
underscore maintaining a high credit score.
That being said, what is the need for a high credit score? There are some
advantages to having a high score. You usually can receive an instant credit
approval based upon your credit score alone. In the past, the lender would have to
manually review every line of your credit file in order to make a determination as
whether to extend credit or not. Second, the consumer has the benefit of system
that is fair to everyone. Being less likely to take into consideration either race or gender. Overall, everyone wins when there is a system that is set in place to
facilitate a rapid and complete credit approval process.
Having good credit thus means that the borrower must also take careful measures
to insure that their personal information is not compromised. In the hands of an
identity thief, good credit can be scary. The thief, in a very short period of time
would assume the identity of the victim and amass a large amount of debt before
anyone ever discovered that there was a problem. Now, that superior credit has
just become your worst nightmare. The only way to maintain that high credit is to
guard every aspect of your credit in the most diligent manner.
Though good credit can be a two edged sword, the benefits of having such, far
outweigh any risk. As a participant of in today's society, you should make every
effort to raise your credit score to its highest possible limit. This score will make it
easier for you to obtain credit when it is necessary.
economy that will not review your credit before they approve an application for
credit. Many of these creditors have a minimum credit score to even start the
process of opening an account. Usually you must meet a certain credit score
along with various other criteria in order to proceed with the process. This should
underscore maintaining a high credit score.
That being said, what is the need for a high credit score? There are some
advantages to having a high score. You usually can receive an instant credit
approval based upon your credit score alone. In the past, the lender would have to
manually review every line of your credit file in order to make a determination as
whether to extend credit or not. Second, the consumer has the benefit of system
that is fair to everyone. Being less likely to take into consideration either race or gender. Overall, everyone wins when there is a system that is set in place to
facilitate a rapid and complete credit approval process.
Having good credit thus means that the borrower must also take careful measures
to insure that their personal information is not compromised. In the hands of an
identity thief, good credit can be scary. The thief, in a very short period of time
would assume the identity of the victim and amass a large amount of debt before
anyone ever discovered that there was a problem. Now, that superior credit has
just become your worst nightmare. The only way to maintain that high credit is to
guard every aspect of your credit in the most diligent manner.
Though good credit can be a two edged sword, the benefits of having such, far
outweigh any risk. As a participant of in today's society, you should make every
effort to raise your credit score to its highest possible limit. This score will make it
easier for you to obtain credit when it is necessary.
Save Time, Money, and Frustration and Get the Right Credit Score
You go into a lender's office prepared to apply for and receive a loan. After all, you've done your homework, you've pulled your credit reports and you know what your credit scores are--you even got one score from each of the three major credit bureaus: Equifax. Experian, and TransUnion. You are shocked when your loan is denied, or maybe you were approved, but the interest rate is much higher than you anticipated. How can that be you say? My credit score is good, I know I checked. Maybe it's not as good as you think. It all depends on there you got it and what kind of credit score it is.
The fact is there are several different credit scoring methods. Credit scores calculated from the same credit reports can differ substantially from credit scoring method to credit scoring method. So how can you ever know what your credit score really is? Well, luckily, 75% percent of lenders use FICO scores exclusively and you can purchase FICO scores yourself--you just have to know where to go. (www.myfico.com)
FICO credit scoring is a numeric method of scoring your credit worthiness developed by Fair Isaac and Company. Your credit score is a number between 300 and 850 that tells creditors how likely you are to pay your bills. The higher the number, the better it looks to potential lenders and creditors.
The three major credit bureaus each have their own version of the FICO score: Equifax uses the Beacon system, TransUnion uses the Empirica system, and Experian uses the Experian/Fair Isaac system. Despite each credit bureaus' use of their own versions, all systems are based the original Fair Isaac FICO scoring method, so each credit score calculated with these systems are generally called FICO scores. However, although most lenders do use FICO scoring, some lenders may have their own scoring methods.
There is only one place where you can get your FICO score from all three bureaus and that is at www.myfico.com. If you order your credit score from anywhere else, again be aware that these scores are "FAKOs" (or "fake") and can differ considerably from your FICO credit scores.
Adding to the confusion is the credit bureaus themselves. Recently, Experian revealed that the national average credit score of its consumers is 678. This is very misleading to the average consumer. When you buy your credit report and score directly from Experians website, you are getting what they call the "PLUS Score," which is NOT a FICO score, and is NOT used by lenders anywhere. (Equifax is the exception--you can buy your FICO score directly from them at their website; however, the only place to get all three scores together is at www.myfico.com.) The 678 PLUS Score reported by Experian is actually the average of consumers' PLUS Scores, not their FICO Scores.
Clearly, the PLUS Score (and all Non-FICO scores) are useless. Not only that, but such hype misleads consumers into purchasing their PLUS Score thinking that they are getting the same credit score that their lender will use. Non-FICO scores are worthless not matter what the credit bureaus or any website selling non-FICO scores claim. Even a few points difference in your credit score can mean confronting the reality of the loss of thousands of dollars out of your pocket--a loss that you probably didn't plan for. The next time you want the most accurate credit score available, do yourself a favor and get the industry standard: the FICO credit score.
The fact is there are several different credit scoring methods. Credit scores calculated from the same credit reports can differ substantially from credit scoring method to credit scoring method. So how can you ever know what your credit score really is? Well, luckily, 75% percent of lenders use FICO scores exclusively and you can purchase FICO scores yourself--you just have to know where to go. (www.myfico.com)
FICO credit scoring is a numeric method of scoring your credit worthiness developed by Fair Isaac and Company. Your credit score is a number between 300 and 850 that tells creditors how likely you are to pay your bills. The higher the number, the better it looks to potential lenders and creditors.
The three major credit bureaus each have their own version of the FICO score: Equifax uses the Beacon system, TransUnion uses the Empirica system, and Experian uses the Experian/Fair Isaac system. Despite each credit bureaus' use of their own versions, all systems are based the original Fair Isaac FICO scoring method, so each credit score calculated with these systems are generally called FICO scores. However, although most lenders do use FICO scoring, some lenders may have their own scoring methods.
There is only one place where you can get your FICO score from all three bureaus and that is at www.myfico.com. If you order your credit score from anywhere else, again be aware that these scores are "FAKOs" (or "fake") and can differ considerably from your FICO credit scores.
Adding to the confusion is the credit bureaus themselves. Recently, Experian revealed that the national average credit score of its consumers is 678. This is very misleading to the average consumer. When you buy your credit report and score directly from Experians website, you are getting what they call the "PLUS Score," which is NOT a FICO score, and is NOT used by lenders anywhere. (Equifax is the exception--you can buy your FICO score directly from them at their website; however, the only place to get all three scores together is at www.myfico.com.) The 678 PLUS Score reported by Experian is actually the average of consumers' PLUS Scores, not their FICO Scores.
Clearly, the PLUS Score (and all Non-FICO scores) are useless. Not only that, but such hype misleads consumers into purchasing their PLUS Score thinking that they are getting the same credit score that their lender will use. Non-FICO scores are worthless not matter what the credit bureaus or any website selling non-FICO scores claim. Even a few points difference in your credit score can mean confronting the reality of the loss of thousands of dollars out of your pocket--a loss that you probably didn't plan for. The next time you want the most accurate credit score available, do yourself a favor and get the industry standard: the FICO credit score.
Subscribe to:
Posts (Atom)
