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A Comprehensive Guide to Disputing Derogatory Items with Credit Bureaus

Published May 22, 2024 | By fvdqfqmy

Introduction

Remember this word Frivolous, it means nonsense. If the credit bureaus can determine a dispute is frivolous, they are not required to do anything. That’s their focus because they are just businesses trying to make a profit like any other business. Businesses try to reduce their expenses for many reasons. One of those reasons is to increase the profit margin.

Consumers are not the credit bureaus’ customers. We do not pay their bills. The “furnishers” do. They are the credit bureaus’, main concern. They bring in more revenue for them than any other areas of their business. Furnishers are the banks, lenders, and creditors. The only concern towards consumers is how can they reduce the cost of investigations.

The Reality of Credit Bureaus

Unless you are wealthy, consumers cannot avoid having a credit history. And we have no say in whether our information is included in the credit bureaus’ databases. We cannot take our information and go somewhere else with it.

Whereas the furnisher can switch between the credit bureaus if they want. Reporting to the credit bureaus cost creditors money. Equifax does not want to lose a creditor to TransUnion. Which can happen if a credit bureau conducts thorough investigations.

The credit bureaus blame credit repair businesses as the reason for their careless investigations. They say that credit repair companies generate frivolous disputes. The make promises of removing valid negative information from consumers reports. About 30% of credit disputes involve credit repair businesses, but they assume every dispute is like this, trying to remove valid negative information.

They know very well you can’t assume every dispute involves a credit repair business. And they do not all try to remove valid negative information. But that still doesn’t explain why they conduct meaningless investigations. It might be a fraction of the reason why, but the real reason is because they are too expensive and undermine their paying customers efforts to collect money from borrowers

Credit bureaus don’t prioritize consumers because credit disputes are a business expense. They are spending money on people who are not their customers.

Conducting real investigations could harm furnishers efforts to collect debts from people. In other words, investigating disputes could reveal that some debts are incorrect or unfair, making it harder for them to collect those debts.

Careless investigations reduce the cost burden of investigations. And they don’t ruin the chances of furnishers collecting their money. They are going to keep their paying customers happy rather that help the consumer. Whatever the furnisher’s say goes.

The Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act was passed in 1970 to address several issues related to consumer credit information. One of the issues being accuracy. It’s supposed to promote the accuracy, fairness, and privacy of consumer information contained in the files of credit bureaus.

Here are reasons an account can be deleted:

Incorrectly reporting an account that does not belong to you.
Incorrectly reporting a late payment.
Inaccurate reporting of the account date.
Reporting an outdated negative account.
Incomplete reporting due to missing information.
Reporting information that cannot be verified.

Important Facts – 54 Years Later:

79% of credit reports contain errors.
54% include personal information that is incorrect.
22% of reports have loans that were listed twice.
8% of reports were missing positive credit information that boosts credit scores.

6 million Americans have errors on their credit reports. Not everyone is disputing errors. I would make a bet that majority of them don’t even know that there is an error. Let’s say only 3 million requested disputes. That is a lot of money. Let’s say half of that resulted in valid errors and needed to be deleted. Thats a lot of money furnishers are not going to be able to collect. This may seem hopeless, but this information can be used to your advantage. You now know that they do not conduct a thorough investigation. That information is going to come in handy later on.

Understanding the Law

Let’s talk about the t law. Credit reports must be 100% accurate. Accurate information cannot be removed from a consumer’s file. People are not perfect, and the credit bureaus employ a lot of people. Of course, errors are going to happen now and again, that’s understandable. The FCRA allows consumers a way to fix the errors that have been made. One thing to remember is that a consumer must exercise their rights. It’s the only way to hold the credit bureaus accountable.

The FCRA says the credit bureaus are required by law to investigate consumer disputes submitted in writing within 30 days plus mail time. The FCRA has not been updated to include telephone or online disputing. Assume that you lose your rights if you dispute any other way than USPS mail. Disputing by phone or online puts you in harm’s way in terms of your dispute being labeled as frivolous.

Ignoring a valid dispute letter is a violation for the credit bureaus. But if the credit bureaus determine your dispute to be frivolous or nonsense, they are not required to investigate.

What Makes a Dispute Frivolous?

You want your letter to be clear and easy to understand.
You want to write it in a genuine and honest way.
You want your letter to sound believable.
You want it to be based on facts that can be verified.
You want it to be honest and accurate.
You want it to be legally strong and valid.

The E-OSCAR System

In every business a common goal is efficiency. Which is streamlining operations to reduce cost and increase productivity.

In 1993, efficiency was rolling out E-OSCAR (Electronic Online Solution for Complete and Accurate Reporting). It was developed and implemented by the credit bureaus so that they can eliminate disputes as fast as possible. When you use online disputing, it’s completely automated. The only difference between online disputing and using U.S. mail is live employees reads the letters.

Both creditors and credit bureaus like the current system because it lets them spend only a few seconds on a dispute instead of taking the time needed to properly resolve it. Employees and vendors must meet quotas. No one is focused on getting to the bottom of the dispute. The investigator should be focused on the facts with an unbiased opinion. Here is a nasty secret, the credit bureaus do not investigate. They receive information and even though they are required to validate any information that they add to any file, in reality, the amount of information that is processed each month would bring would destroy any efficiency they have.

What Happens During an Investigation

Are you thinking, reviewing documents, researching facts, interviewing witnesses, or comparing handwriting? Calling the consumer to talk to about the issue and get their side of the dispute. Well, then wait until you read what goes on.

The Investigation Process

There’s no incentive for conducting a true investigation. The role of the credit bureau employees assigned to credit reporting disputes have very restricted duties and responsibilities. The credit bureau employee will receive the dispute letter and read it, as well as review any supporting documentation. They will get a sense of the dispute.

The credit reporting industry uses a standardized electronic form: Consumer Dispute Verification form. It has a few items on it. Identifying information about the consumer in the credit bureau’s file; Place to enter a dispute code; Place for comments. Enough space for a 1-2 sentence of commentary.

The employee has 26 dispute codes to choose from. They are choosing the dispute code that best matches what they just read in the consumers letter; Of the 26 dispute codes, 5 of them are used for the vast majority of disputes.

Not his/hers
Disputes present/previous Account Status/History
Claims Inaccurate Information. Did not provide specific dispute
Disputes amounts
Claims account closed by consumer

Let me resay that. The consumer’s detailed letters are summarized into a 2-to-3-digit code. No attachments can be sent electronically. The employee sends the electronic form to the furnisher. That officially initiates the investigation.

The dispute system is dependent on the dispute codes. When the furnisher receives the dispute form, the furnisher knows it means to investigate. Do you really think that the creditor is really going back into their records to prove the information is verified as being accurate? After they see the dispute code. What are they even supposed to investigate if they only have the electronic form to work off of?

The majority of disputes end with the furnisher verifying the presence of the disputed information without investigating the dispute itself. They don’t examine the details, review documents, or speak with consumers regarding the dispute. Instead, the furnishers just check that the information on the Automated Credit Dispute Verification form matches their own computer records, and then confirm the disputed information to the credit bureaus is verified as accurate.

And then the verified letter is sent to the consumer. Stating that the disputed item has been verified as accurate. And because the removal or deletion of accurate information is against the law. The information will remain.

All of a sudden, the law is brought up. Where was the law during the process? What is anybody going to do about it anyway? Who is going to know?

Well, now you know, and you can work with it. It’s not going to get better. Two reasons why consumer disputes outcomes will not be fair:

Consumer disputes are a business expense to the bureaus and to increase the business profit margin they must reduce business expenses.
Conducting a reasonable investigation has the potential to of hurting their customer’s business of collecting debts from borrowers.

What can anyone do?

Well, use this information to work for you. The credit bureaus do not have free reign. They have a lot of room to maneuver, but when the consumer exercises their rights, they have to follow the law. They cannot say that the information is verified and leave it at that. If they allegedly did what they say they did, then they can prove it.

Be prepared to send multiple dispute letters because in credit repair, sometimes you hit a point where nothing works. And the credit bureaus try to stall by sending the same response letter, hoping that consumer will give up and move on.

The response letters do not include any specifics about the investigation that took place. Probably because they don’t want the consumer to know what went on. They are only required by law to provide details when the consumer requests it.

I am jumping the gun on the process, we are not there yet. We are discussing the first round right now. This letter is just a request for investigation. But during the process you will have your chance to demand details of the investigation.

Some Tips to Help Along the Way

If you have receipts or billing and payoff statements to support your dispute, include them with your letter.
Avoid explaining too much in the letter itself. Sympathy is not part of the credit bureaus vocabulary. Explanations only admit to the error being true and accurate. Let supporting documentation do the explaining.
Credit repair letter templates will quote the law code. Regular, everyday consumers do not. If the credit bureaus get a hint of a credit repair business letter, they will label the dispute frivolous and ignore it. The credit bureaus ignore letters they believe are generic, that have been found on the internet.
Only one negative item per dispute letter. Dispute letters with lists of negative items to dispute do not come off as someone who is surprised to see an error on their report. It’s more like something a credit repair business would do for their client.
Handwritten letters are preferred, but if your handwriting is hard to read, print out your letter instead. Avoid using cursive writing. You want your letter to be easy for the reader to understand.
Envelopes will be thrown away. Always include your name and address in your letter.
If necessary, add a note at the top like “Time Urgent!”
When closing your letter, use a different closing like “Best wishes” instead of “Sincerely.” This helps avoid sounding like a generic template.
Send your dispute letters via USPS mail, even if the credit bureau responds to you by email. They will likely use email to save on postage costs, so be sure to check your email for their responses.
If cost is an issue, consider using certified mail only for items that are very important and for which you have a strong case for deletion. There’s no need to request your free annual credit report by certified mail.
If you send your letter with tracking, write the tracking number at the bottom of the letter before sealing it. This shows that you are keeping an eye on the timeline and expecting a prompt response.
It’s very important to keep track of which letter you sent, who you sent it to, and when you sent it. You can keep this information on your computer or write it down in a notebook. You can even take photos of the letters and envelopes with your phone. Hopefully, you won’t need these records, but if you do, they’ll help you prove your case. It’s better to have them and not need them then it is to need them and not have them.
Sign your letters by hand because credit repair companies do not use handwritten signatures.
About 30% of credit reports have open accounts listed that have actually been closed and paid off. This can be beneficial if the account was paid as agreed because it helps your credit rating. However, if the closed account has late payments, it will hurt your credit score.

For example, if you have an account has multiple late payments. That shows a balance of $866, but you already paid it off. You should aim to have this account deleted to improve your credit score. If you write, “This account is an error, I paid that account off already, please delete it,” the credit bureaus will just update the balance to $0. Because saying that “you paid it off already”, is admitting that the account is yours.

Changing the balance to $0 makes the information accurate and true. It will then be impossible to delete. The late payments will continue to affect your credit score until they age off the report.

Instead, simply state, “This account is providing false information. Please delete it.” This approach doesn’t admit anything and is more likely to result in the account being deleted.

Be polite and present yourself as a responsible consumer who values their credit rating. After reviewing your credit report, you found an error and want it corrected.

I think we covered it all, so you can move on to the next step.

Sample Letter for requesting an investigation

Mastering Credit Management: Essentials to Maximize Your Credit Score

Published May 12, 2024 | By fvdqfqmy

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Handling credit matters might initially appear overwhelming, but grasping the core principles can equip you with the ability to cultivate a strong financial standing. This comprehensive guide will walk you through interpreting your credit reports, rectifying any inaccuracies, and strategically boosting your credit score. Let’s commence by revisiting the basics.

Step 1: Obtain Your Credit Reports

Obtain copies of your credit reports from the three primary credit bureaus. This foundational measure is pivotal for gaining insights into your present credit situation and pinpointing any erroneous information that could be adversely influencing your financial well-being.

Step 2: Opt Out of Unsolicited Credit Offers

Safeguard your personal information and mitigate the risk of identity theft by choosing to opt out of receiving unsolicited credit card offers and loan solicitations. Furthermore, implement a credit freeze on your reports to prohibit unauthorized parties from accessing and manipulating your financial records. Any inaccuracies or inconsistencies found within these reports can have a detrimental impact on your credit score.

Step 3: Thoroughly Review Your Credit Reports

Carefully review each section of your credit reports for accuracy. Make sure they are 100% accurate and complete. Credit reports can be intimidating at first. Each one will contain the same information that includes:

Personal Information: Your name, address, Social Security number, date of birth.
Credit Accounts: Details of your credit accounts including banks, credit card issuers, and other lenders. This includes the type of account (mortgage, auto loan, credit card), the date you opened the account, your credit limit or loan amount, account balance, and your payment history.
Credit Inquiries: A list of entities that have requested your credit report, such as lenders when you apply for a loan or credit card.
Public Records: Bankruptcies, foreclosures, lawsuits, wage attachments, liens, and judgments.
Collections: Past due accounts that have been turned over to a collection agency

Although the presentation of the information may vary, the core data remains consistent across credit reports. However, it’s important to note that not all creditors report to all three major credit bureaus. You might have a creditor that exclusively reports to Equifax, for instance. In such cases, the other two bureaus, TransUnion and Experian, would be unaware of that particular account since they have not received any information regarding it.

Creditors do not necessarily update information simultaneously. Typically, they report data around the time when your billing cycle is due, which is approximately every 30 days. The credit bureaus, on their end, will incorporate these updates anywhere from the same day to up to a week later. This discrepancy in reporting timelines is the reason why you may find one of your accounts listed on only one of your credit reports, and consequently, your credit scores may vary across the different bureaus.

Do not worry about your credit score. Technically you don’t have a credit score until your file is pulled and then it is calculated. It’s not saved, and you can’t use a previous score. Credit files change frequently. As information comes in from different sources, files are updated. Any information that is added to your file is going to impact your credit score.

There are too many factors that go into the calculation of credit scores. Your credit score is based on the information in your credit file. If your reports look good, your score will be good.

Your initial focus for review and rectification should be your personal details. This step establishes the foundation before initiating any disputes for successful credit repair. The personal identifiers to verify include:

Your full name
Residential address
Date of birth
Social Security number
Phone number

Ensuring the accuracy of these core identifiers is crucial before proceeding with further actions.

Consistent Personal Information

Name: Regarding your name on your credit report, the objective is to have a single, consistent form listed. Or, at the very least, minimize the number of name variations present. If both your maiden name and married name appear, that is understandable, resulting in two forms being listed.

Hyphenated last names can potentially lead to confusion. Data entry errors could occur, causing inaccuracies. For instance, if I applied for a credit card using “Tom” instead of “Thomas,” but the creditor inadvertently entered “Tim” into their system, then “Tim” would be reflected on my credit report. Errors in your name and an excessive number of name variations can create issues. However, no one will proactively notify you about such errors. It is the individual’s responsibility to ensure that their credit report is 100% accurate.

Merged or mixed credit accounts are a prevalent issue, but they pose a significant problem. This error can lead to the denial of credit lines. Additionally, if the mixed account contains derogatory information, it could cost you potential job opportunities. Surnames are particularly susceptible to identity issues, errors, and merged credit files.

One of the primary reasons for minimizing name variations is to demonstrate stability. Stable individuals are less likely to default on their financial obligations.

Removing extra names from your credit reports will not only increase your score but also separate your file from those with similar names.

When eliminating names from your credit report, it’s crucial to retain accounts associated with positive credit history.

Let’s revisit the example where a creditor incorrectly entered my name as “Tim” in their system instead of “Tom.” Since no one was verifying for errors, the name on file became “Tim Smith.” However, the payment history on this account is perfect, making it an account I want to retain.

The problem arises when a lender notices the discrepancy between “Tim Smith” and “Tom Smith,” potentially raising suspicions of impropriety.

Additionally, there’s a risk that my credit file could become merged with an individual named “Tim Smith.” While I don’t want to delete this account due to its positive credit history, sending a letter demanding the removal of incorrect names could create complications.

The correct approach to resolve this issue would be to contact the creditor first and inform them of the name inaccuracy. Once the update is made, and the account is correctly tied to “Tom Smith,” I can then send a letter requesting the removal of the incorrect name variations from my credit file.

Choose one form of your name and go with it. For instance:

Thomas A. Smith Jr. – This is the most common structure for financial dealings.

Arnold Smith Jr. -This is an alternate structure

Thomas Arnold Smith Jr. – This is another alternate structure.

Maintain uniformity between your legal name and the one utilized across financial records and identification documents.
If your legal name includes a suffix, ensure its consistent usage, as this will minimize the likelihood of your credit file becoming mixed with others.
Prior to submitting applications, meticulously review and verify the accuracy of all details provided.
Avoid the use of nicknames on legal documents to prevent potential discrepancies.

Address Discrepancies and Errors

Address: It is not uncommon for multiple addresses to be listed in your credit reports. These could include your childhood home, a rental property you resided in, or perhaps a friend’s address that you temporarily used.

However, the addresses you want to maintain on your reports are:

Your current residential address
Accounts associated with established positive credit history
Properties you have owned with a mortgage that was paid on time

These types of addresses hold value for credit reports. While having a few addresses listed is normal, an excessive number, such as 10 different addresses, may raise concerns. If a lender is considering extending you a line of credit and notices several different addresses, they may question the reasoning behind such frequent relocations. The concern arises as to whether you will make the monthly payments on time if offered credit, or if you will simply change addresses, leaving the lender in a difficult situation.

Phone numbers: Verify that the phone number listed on your credit reports is your current and accurate personal phone number. Credit reports have been known to erroneously list an individual’s work phone number as their primary contact number instead of their personal number.

Social Security Number: Carefully review your Social Security number and date of birth to ensure their accuracy. Any inaccuracies or errors related to these personal identifiers can create potential problems and complications for you in the future.

Sample letter to download Sample letter

When submitting supporting documentation for identification purposes along with your dispute letters, providing more forms of identification is better than 2 forms of identification. Sending two types of ID has an acceptance rate of 76%. However, if you include three forms of ID, the acceptance rate increases to 86%. Furthermore, if you provide four forms of identification, the acceptance rate rises to an impressive 92%. This principle applies to all types of disputes you may file with the credit bureaus only.

ID types:

Driver’s license
Utility bill
Bank statement
State ID
Voter registration card
Personal voided check.
Paycheck stub
Mortgage statement
Passport
Rent agreement.

NOTE:

It is crucial to maintain honesty when communicating with credit bureaus. In your letter, only list the names and addresses you want to be listed on your report. It is unnecessary to give any explanation for addresses you want deleted. They only need to know what your current address is.

After submitting this letter to the major credit bureaus—Experian, Equifax, and TransUnion—it is also essential to send it to other lesser-known credit information sources to ensure comprehensive correction of your records.

LexisNexis Consumer Center

PO Box 105108

Atlanta, GA. 30348-5108

Phone: 1-888-497- 0011

__________________________

SageStream LLC

PO Box 503793

San Diego, Ca.,92150

Phone: 1-888-395-0277

Merged/Mixed Credit Accounts

The next step involves resolving merged or mixed credit files. If you do not have a mixed credit file, you can skip this information and proceed to the next step.

However, if you do have a mixed credit file, it is advisable to address this error before disputing more complex issues. At this stage, your personal identifiers should be accurate. Merged accounts are a common problem for names that include suffixes like Jr., II, or III. Those with common names or names that can be spelled differently may also experience merged accounts.

You have already determined the preferred name format you will use moving forward.

If you are certain that another person’s credit file has been improperly merged with your own, it is crucial to send a truthful and sincere letter. Include at least two forms of identification that can validate your name and address. However, remember the acceptance rate statistics mentioned earlier, which suggest providing more forms of identification increases the likelihood of acceptance.

To ensure your letter stands out and does not appear as a generic template found online, you can write “URGENT” in red at the top of the paper. This is also an opportune time to conduct a search of your first and last name. Perform a Google search for your name and observe how many individuals share the same first and last name.

Additionally, visit LinkedIn.com and enter your first and last name in the search bar. Look for the option that states “See all people results.”

If there is a significant number of individuals with the same name as yours, include this information in your letter. Incorporate a statement such as, “On LinkedIn.com alone, there are XX number of people with the same name as mine.”

Sample letter for Merged Credit Files

By now you have checked to make sure that all your personal identifiers are correct across the 3 main credit bureaus and the lesser known data collectors. And you made sure that you do not have any information that belongs to someone else in your file.

If your reports are 100% correct, then all that is left to do is review your reports annually to maintain a clean record and to stay on top of any accounts that may have been opened without your permission.

Although if you have derogatory items on your report that you want removed you can move on to the next step.

Mastering Credit Management: Essential Strategies and Insights

Published May 5, 2024 | By fvdqfqmy

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Step 1 is universal; you can’t go into the process blind. You need to know what is in your profile that the credit bureaus store about you. Only you are going to know if there are any errors in your credit file by reviewing your credit reports. Since creditors and lenders are not required to report to the credit bureaus.

And the credit bureaus only know what is reported to them, ordering your reports from them is important. You only want to address errors with the credit bureau that shows errors on their report of you. With the assumption that you ordered and now have your credit reports. Here are three things to do before you inform the credit bureau of any errors. Below are three actions you can do before you begin disputes.

Navigate Credit Offers Wisely

By staying informed about common financial practices and understanding marketing motivations, you can shield yourself from deceptive offers and make well-informed financial decisions. I thought receiving offers in the mail for credit cards was because I had good credit. Because credit card offers don’t come in the mail when your credit is bad. Although, these credit card offers do not guarantee that line of credit.

The credit bureaus are a storage house for your file. Containing information reported to them by your creditors. Your creditors own the information they are reporting. Credit bureaus assume the information is accurate. The credit bureaus also sell the information to other creditors, loan providers, insurance providers and mortgage companies.

Loan providers and credit card companies are aiming to offer credit to consumers. But not all consumers are going use credit responsibly. They want to find the consumers who pay their debts. Surprisingly credit scores are a great indicator for that. Creditors and lenders use software that analyze credit reports based on specific criteria.

Such as, targeting consumers with credit scores ranging from 600 to 680. Because they know consumers who fall into that range are more likely to accept higher interest rates compared to consumers with excellent credit scores. Or a creditor might want to target individuals who have high credit scores but are currently underserved by their existing credit cards.

You want the right amount and mix of credit to earn the most points whenever your credit score is calculated. In terms of credit cards, 3 earns the most points. But more importantly, being able to manage them well is what’s going to build a solid credit profile. If you feel ready to take on credit by applying for a loan or a credit card. You can easily search online for options. You don’t need mailing offers.

Shield Your Finances: How Opting Out at OptOutPrescreen.com Protects You From Identity Theft

Opting out helps to prevent credit card offers from falling into the wrong hands, as criminals could exploit them to steal your identity. Fraudsters could apply for credit in your name, accumulate debts without your awareness, leading to collections and ugly credit reports. You can opt-out at www.optoutprescreen.com

If you fall victim to identity theft, immediate action is necessary to minimize damage and safeguard yourself:

File a Report: Contact your local police department to file an official report of the identity theft.
Contact Credit Bureaus: Notify major credit bureaus—Experian, Equifax, and TransUnion—about the identity theft. Request a fraud alert on your credit report to prompt creditors to verify your identity before extending credit.
Maintain Detailed Records: Keep thorough records of all communications, transactions, and documents related to the identity theft, including copies of correspondence and police reports.
Seek Assistance: If unsure about the necessary steps, consider consulting a certified identity theft specialist or legal professional for guidance.

Take Control: How the Do Not Call Registry Reduces Unwanted Calls and Protects Your Privacy

The primary goal of the Do Not Call Registry is to give people a choice about whether they want to receive telemarketing calls at home. It was established to address consumer complaints about unwanted telemarketing calls and to provide a straightforward mechanism for stopping those calls.

This will not stop all solicitation calls altogether. Most telemarketing calls are covered by the registry. However, there are exceptions. Calls from political organizations, charities, telephone surveyors, or companies with whom a consumer has an existing business relationship are allowed. A company may call a consumer for up to 18 months after the consumer’s last purchase, delivery, or payment—even if the consumer’s number is on the registry.

But it will substantially reduce solicitation calls. While some automated systems and international scammers may ignore the registry as well, taking control of your financial matters shouldn’t entail wasting time on fake scare tactics, such as fraudulent calls claiming computer issues from supposed Microsoft representatives.

If you fall victim to a phone scam and provide your banking information to a criminal who proceeds to withdraw funds, your bank will not be liable for reimbursement. Never disclose sensitive information over the phone, especially if you didn’t initiate the call, as the identity of the caller cannot be guaranteed. Registration is quick and easy online, but it takes 31 days to take full effect. Afterward, if a solicitor violates your rights by calling, you have the right to demand compensation or pursue legal action through small claims court. www.DoNotCall.gov.

Lock Down Your Credit: The Essential Guide to Freezing and Unfreezing Your Credit Report

Don’t overlook the importance of freezing your credit reports. Place a freeze on your credit reports now; or if you are in the process of applying for a credit card to build positive credit, do it immediately afterward. Frozen credit reports means no one can open, read, or obtain your credit report. It is “frozen shut.” When applying for credit in the future, instruct the credit bureaus to unfreeze your report for a specific period, such as one week or one month.

If applying for a home loan, your credit reports need to be unfrozen and open to the mortgage lender from the initial application until the loan closes. For other types of credit, inquire about the necessary time period. Allow a couple of days for your unfreeze request to go through.

Experian states that when you execute the request to lift the freeze, it happens in an hour; however, it could take two days to go through. Remember, there’s an additional charge to request it again after lifting the freeze, so don’t overlook this.

Freezing your credit shields you from online identity theft, unauthorized credit usage, and unapproved credit inquiries. However, it doesn’t prevent you from accessing your own credit report, nor does it stop review by current creditors, collection agencies, or landlords.

If you have children, consider freezing their credit to safeguard them from fraud. Freezing their credit is the most effective prevention measure. If a child falls victim to credit fraud, report it to the authorities and provide a copy of the police report to both the creditor and credit bureaus to shut down the account and remove it from the child’s file.

You can easily freeze your credit online, or if preferred, you also have the option to submit a freeze request by mail or telephone. Below are the links for freezing your credit with major credit bureaus:

Experian: Link
Equifax: Link
TransUnion: Link
Innovis: Link
LexisNexis (joint with SageStream): Link
SageStream (joint with LexisNexis): Link
Clarity Services: Link

Once you’ve completed the freezing of your credit, it’s prudent to wait for a two-week period before sending any dispute or challenge letters. Keep in mind, this waiting interval is a critical aspect of the setup process, and exercising patience is paramount.

Beyond the Big Three: Exploring Alternative Credit Sources for a Fuller Financial Picture

While Equifax, Experian, and TransUnion hold prominence in the credit reporting industry. They are the big three, however, there are other entities that gather and disseminate your private data. Banks, mortgage lenders, and other financial institutions rely on supplementary sources to evaluate your creditworthiness, providing unique perspectives and information not typically found in traditional credit reports.

Comprehending and addressing the insights offered by these alternative credit sources is essential for maintaining an accurate and comprehensive financial profile.

Devoting time to a thorough review and correction of all your personal information is a worthwhile endeavor. Although obtaining additional reports may require some effort, the benefits outweigh the challenges. Credit repair specialists often spend several weeks ensuring their clients’ personal details are accurate across major and minor sources before commencing any dispute procedures. Ultimately this approach saves time, reduces postage expenses, and mitigates frustration.

Overdraft protection plans come with their own set of limits, including how much they cover and how long they last. It’s important to carefully check the specifics of your plan because it might not cover as much as you think.

You can check into alternative option if you are having trouble opening a new account.

Look for banks or credit unions that don’t rely on ChexSystems or credit reports. GTE Financial’s Go Further Checking, or Varo is an online branch of Bankcorp Bank
Another approach is to start with a savings account at a small or medium-sized local bank or credit union. Demonstrating responsible savings habits can pave the way for eventually opening a checking account, especially if you consistently increase your savings balance over time.

Fundamental rules:

Never spend more than you have.
Avoid dangerously low balances.
Maintain a cushion of funds in your checking account as a safety net, separate from your regular balance.

This buffer, can be $100 or more, serves as a precaution against overdrafts, fees, and the inconvenience of bounced checks. If tracking your balance is challenging, error on the side of caution and maintain a higher cushion.

The use of personal checks has decreased significantly with the rise of digital payment methods like online banking, and mobile payment apps. Checks remain useful in certain situations where digital payments might not be an option, such as paying rent, settling debts between individuals who prefer not to use cash, or making payments where electronic transfers are not feasible.

They are also used by some who may not have access to banking technology or prefer a more tangible method of payment. Additionally, checks can serve a role in business transactions, particularly among small businesses or in industries that have longer-standing traditions of using checks.

Navigating the Fine Print: Understanding Your Bank’s Checking Account Rules and Overdraft Policies

In the checking account agreement for banks are all slightly different from the next. But overall, have similar terms and conditions. They are written with the banks interest in mind. Sometimes overdrafts fees happen and confuse the owner of the account about why the fee was applied. So here are some of the terms that are hard to read in those checking account agreements that have been overlooked.

For instance, if you postdate a check, the bank can choose to process the check before the date specified, and if there aren’t enough funds in the account to cover the check at that time, it could result in the account becoming overdrawn. In such cases, the bank might charge an NSF fee for the returned check, and if they choose to cover the check anyway (resulting in an overdraft), they may also apply an overdraft fee. Similarly, banks could endorse checks on your behalf if you forgot to sign the check.

ATM deposits might not always go through immediately and could cause issues like bounced checks. Cashier’s checks or money transfers need more time to process, so it’s best not to assume you can use that money right away. Also, banks have daily cutoff times for making deposits, if you make a deposit after the bank’s daily cutoff time, your money won’t be available as quickly as you assume. It’s good to know when your bank’s cutoff time is.

Overdraft protection plans come with their own set of limits, including how much they cover and how long they last. It’s important to carefully check the specifics of your plan because it might not cover as much as you think.

SageStream LLC

PO Box 503793

San Diego, CA 92150

Phone: 1-888-395-0277

Clarity Services: Unveiling Creditworthiness Beyond Traditional Scores

Clarity Services specializes in predictive analytics for individuals with below-prime credit. With the claim of being a “crystal ball” for predicting future payment behavior, Clarity possesses the largest subprime database in the industry, comprising over 62 million consumers. While conventional credit bureaus assess risk based on past payment history, Clarity focuses on financial and personal stability to determine creditworthiness. Factors such as residential stability, employment consistency, and credit application behavior are analyzed to gauge stability. Longer job tenures are generally viewed more favorably.

Employment History: Are you frequently changing jobs, possibly due to being terminated or unreliable work history? On the other hand, do you have a stable and consistent employment record over an extended period, ideally at least one year, but preferably longer without any yearly job changes for the past five consecutive years?

Credit Applications: Have you recently submitted a high volume of credit applications? A large number of inquiries, particularly for multiple credit cards, raises red flags. Similarly, have you applied for multiple mortgage loans, possibly across various online platforms? It’s common to shop around with two or three different mortgage lenders to find the best home loan option. In this scenario, multiple hard inquiries within a certain timeframe are typically combined and treated as a single inquiry by the credit scoring models.

Credit Score Impact: During times when preserving your credit score is crucial, this combined inquiry treatment is beneficial. Three separate hard inquiries can significantly impact your credit score. If your current score is on the cusp of dropping or rising into the next credit scoring tier, you want to avoid a decrease. A lower score can lead to a higher interest rate on loans. Let me illustrate with an example…

The table shows the interest paid on a $20,000 car loan over 5 years across different credit score ranges, we’ll use the average interest rates provided by Experian for each credit score range. Here’s the breakdown of the average interest rates.

Now, let’s calculate the total interest paid for a $20,000 car loan over 5 years (60 months). The formula to calculate the total interest paid on a loan is:

Total Interest = P \times r \times n - P

Where:

( P ) is the principal amount ($20,000)
( r ) is the monthly interest rate (annual rate divided by 12)
( n ) is the total number of payments (60 for a 5-year loan)

Using this formula, we can calculate the total interest paid for each credit score range. Here’s the table with the calculated total interest for each credit score range:

Examine the different credit score tiers and the corresponding total interest amounts. If you have an excellent credit score, say 786, you will pay $3,037 in total interest for that auto loan. When shopping for a car loan, your credit happens to be pulled three times by lenders. Each credit inquiry slightly lowers your credit score. If those inquiries cause your score to drop into the next lower tier, it could result in paying $741 more in total interest on the loan. So, a decrease of just 6 credit score points in this example would cost you an additional $741 in interest charges.

According to Clarity, individuals with prolonged job and address stability, who experienced temporary financial setbacks resulting in late payments, are not perceived as high-risk borrowers. They are seen as trustworthy individuals who endured a temporary hardship. Conversely, frequent changes in residence and excessive credit applications may raise doubts about reliability, as individuals might vanish before fulfilling their payment obligations. If your credit profile is less than perfect, consulting your Clarity Report is advisable.

Clarity Services, Inc.

address: PO Box 5717

Clearwater, FL 33758

Phone: 1-866-390-3118

ChexSystems: The Essential Tool for Uncovering Hidden Financial Histories

ChexSystems is a consumer reporting agency that focuses on tracking debit account history rather than credit accounts. During the process of applying for a mortgage or purchasing a home, lenders may obtain a title report that can reveal information not typically found in credit reports.

This information can include:

Previous foreclosures or short sales
Bankruptcies
Tax liens
Liens from contractors, service providers, or professionals who performed work on your property and were not fully compensated
Judgments for unpaid bills, including credit card debt

These negative records are linked to your Social Security number and can persist even if they are not listed on your credit report. It is crucial to disclose any adverse financial events from the past decade openly. A knowledgeable loan officer can verify these details with a title company and provide guidance on the appropriate course of action. Falsifying mortgage applications constitutes felony fraud and should be avoided.

If you have been rejected when trying to open a bank account, it might be due to information in your ChexSystems report. You can obtain your ChexSystems Consumer Report annually for free and request your ChexSystems score, which they provide at no cost. However, this score is different from traditional credit scores and follows a unique scoring system ranging from 100 to 899, with higher scores indicating lower risk to lenders.

To order via mail: Chex Systems, Inc. Attn: Consumer Relations

7805 Hudson Road, Suite 100 Woodbury, MN 55125

To order online: www.chexsystems.com

To order by phone or discuss any concerns: (800) 428-9623

Safeguarding Your Financial Identity: Key Steps to Resolve Disputes and Protect Against Fraud

The most common reason for disputes on Consumer Disclosure Reports is identity theft. This can involve unauthorized activities such as check writing, ATM withdrawals, or even opening a joint account through signature forgery. By the time you notice these activities, the damage is often extensive. If you’re a victim of identity theft, your initial step should be filing a police report.

Another significant cause of negative ChexSystems Reports is merged identities, which occurs when another individual’s banking data is erroneously associated with yours due to similar names. It is crucial to review your Consumer Disclosure Report for accuracy in your name, address, date of birth, and social security number. If you find any discrepancies, submit a copy of your ID along with an explanatory letter and request for correction.

It is important to note that any communication with ChexSystems must be truthful and accurate. If you’ve had a check returned due to insufficient funds, contact the bank where the issue occurred and inquire about a “pay for delete” arrangement. Where they may agree to remove the incident from your ChexSystems consumer report upon settlement of the outstanding balance. Do not deny it because banks are not legally obligated to grant this request. But many will agree if approached politely and directed to the right person.

Another significant cause of negative Chex Reports is merged identities, occurring when another individual’s banking data is erroneously associated with yours due to similar names. Review your Consumer Disclosure Report for accuracy in name, address, date of birth, and social security number. If discrepancies exist, submit a copy of your ID along with an explanatory letter and correction request.

Reset Your Financial Future: Overcoming Credit Challenges and Embracing New Banking Opportunities

Negative information on a Consumer Disclosure Report has the life span of five years. Your credit report is seven years for most negative items. You don’t to wait the full duration before opening a new checking account and moving forward financially.

Mistakes are part of life’s lessons; it’s better to learn from them rather than resent them. Some individuals, open accounts without grasping basic financial management principles. The next thing you know issues begin popping up like unchecked spending and account mismanagement. then worry sets in.

Stress levels rise, it’s terrible. You can take the opportunity to acknowledge past errors and commit to making positive changes moving forward. Today is a new day to begin building a better financial track record.

You can check into alternative option if you are having trouble opening a new account.

Look for banks or credit unions that don’t rely on ChexSystems or credit reports. GTE Financial’s Go Further Checking, or Varo is an online branch of Bankcorp Bank
Another approach is to start with a savings account at a small or medium-sized local bank or credit union. Demonstrating responsible savings habits can pave the way for eventually opening a checking account, especially if you consistently increase your savings balance over time.

Fundamental rules:

Never spend more than you have.
Avoid dangerously low balances.
Maintain a cushion of funds in your checking account as a safety net, separate from your regular balance.

This buffer, can be $100 or more, serves as a precaution against overdrafts, fees, and the inconvenience of bounced checks. If tracking your balance is challenging, error on the side of caution and maintain a higher cushion.

The use of personal checks has decreased significantly with the rise of digital payment methods like online banking, and mobile payment apps. Checks remain useful in certain situations where digital payments might not be an option, such as paying rent, settling debts between individuals who prefer not to use cash, or making payments where electronic transfers are not feasible.

They are also used by some who may not have access to banking technology or prefer a more tangible method of payment. Additionally, checks can serve a role in business transactions, particularly among small businesses or in industries that have longer-standing traditions of using checks.

Navigating the Fine Print: Understanding Your Bank’s Checking Account Rules and Overdraft Policies

In the checking account agreement for banks are all slightly different from the next. But overall, have similar terms and conditions. They are written with the banks interest in mind. Sometimes overdrafts fees happen and confuse the owner of the account about why the fee was applied. So here are some of the terms that are hard to read in those checking account agreements that have been overlooked.

For instance, if you postdate a check, the bank can choose to process the check before the date specified, and if there aren’t enough funds in the account to cover the check at that time, it could result in the account becoming overdrawn. In such cases, the bank might charge an NSF fee for the returned check, and if they choose to cover the check anyway (resulting in an overdraft), they may also apply an overdraft fee. Similarly, banks could endorse checks on your behalf if you forgot to sign the check.

ATM deposits might not always go through immediately and could cause issues like bounced checks. Cashier’s checks or money transfers need more time to process, so it’s best not to assume you can use that money right away. Also, banks have daily cutoff times for making deposits, if you make a deposit after the bank’s daily cutoff time, your money won’t be available as quickly as you assume. It’s good to know when your bank’s cutoff time is.

Overdraft protection plans come with their own set of limits, including how much they cover and how long they last. It’s important to carefully check the specifics of your plan because it might not cover as much as you think.

Below are four additional credit report sources worth considering:

Innovis is the fourth-largest credit bureau, closely trailing Equifax, Experian, and TransUnion. It specializes in data collection, particularly in the bankruptcy domain. Notably, major mortgage entities like Fannie Mae and Freddie Mac share home loan data with Innovis.

Innovis

950 Threadneedle Street, Suite 200

Houston, TX 77079-2937

Phone: 1-800-540-2505 and 1-614-223-0690

LexisNexis is not a credit bureau. They function as a data service provider, gathering comprehensive information on individuals and supplying it to creditors for risk assessment. It’s a significant source for details on unpaid taxes, judgments, liens, and bankruptcies. Mortgage lenders often utilize LexisNexis to cross-check data not included in traditional credit reports.

LexisNexis

Consumer Center PO Box 105108

Atlanta, CA 30348

Phone: 1-888-497-0011

SageStream is a legitimate credit bureau. It mirrors the data found on LexisNexis, making it crucial to review both reports for consistency and accuracy. SageStream is utilized by various industries, including automobile lenders, utility companies, cell phone services, retail stores, and credit card companies. Therefore, ensuring the accuracy of all reported information about you, including your name spelling, is crucial. Unlike other scoring systems like FICO or Vantage scores, SageStream employs its own credit scoring system, ranging from 001 to 999. This unique scoring system diverges from traditional methods, possibly to differentiate itself and avoid confusion with other credit scores.

SageStream LLC

PO Box 503793

San Diego, CA 92150

Phone: 1-888-395-0277

Clarity Services: Unveiling Creditworthiness Beyond Traditional Scores

Clarity Services specializes in predictive analytics for individuals with below-prime credit. With the claim of being a “crystal ball” for predicting future payment behavior, Clarity possesses the largest subprime database in the industry, comprising over 62 million consumers. While conventional credit bureaus assess risk based on past payment history, Clarity focuses on financial and personal stability to determine creditworthiness. Factors such as residential stability, employment consistency, and credit application behavior are analyzed to gauge stability. Longer job tenures are generally viewed more favorably.

Employment History: Are you frequently changing jobs, possibly due to being terminated or unreliable work history? On the other hand, do you have a stable and consistent employment record over an extended period, ideally at least one year, but preferably longer without any yearly job changes for the past five consecutive years?

Credit Applications: Have you recently submitted a high volume of credit applications? A large number of inquiries, particularly for multiple credit cards, raises red flags. Similarly, have you applied for multiple mortgage loans, possibly across various online platforms? It’s common to shop around with two or three different mortgage lenders to find the best home loan option. In this scenario, multiple hard inquiries within a certain timeframe are typically combined and treated as a single inquiry by the credit scoring models.

Credit Score Impact: During times when preserving your credit score is crucial, this combined inquiry treatment is beneficial. Three separate hard inquiries can significantly impact your credit score. If your current score is on the cusp of dropping or rising into the next credit scoring tier, you want to avoid a decrease. A lower score can lead to a higher interest rate on loans. Let me illustrate with an example…

The table shows the interest paid on a $20,000 car loan over 5 years across different credit score ranges, we’ll use the average interest rates provided by Experian for each credit score range. Here’s the breakdown of the average interest rates.

Now, let’s calculate the total interest paid for a $20,000 car loan over 5 years (60 months). The formula to calculate the total interest paid on a loan is:

Total Interest = P \times r \times n - P

Where:

( P ) is the principal amount ($20,000)
( r ) is the monthly interest rate (annual rate divided by 12)
( n ) is the total number of payments (60 for a 5-year loan)

Using this formula, we can calculate the total interest paid for each credit score range. Here’s the table with the calculated total interest for each credit score range:

Examine the different credit score tiers and the corresponding total interest amounts. If you have an excellent credit score, say 786, you will pay $3,037 in total interest for that auto loan. When shopping for a car loan, your credit happens to be pulled three times by lenders. Each credit inquiry slightly lowers your credit score. If those inquiries cause your score to drop into the next lower tier, it could result in paying $741 more in total interest on the loan. So, a decrease of just 6 credit score points in this example would cost you an additional $741 in interest charges.

According to Clarity, individuals with prolonged job and address stability, who experienced temporary financial setbacks resulting in late payments, are not perceived as high-risk borrowers. They are seen as trustworthy individuals who endured a temporary hardship. Conversely, frequent changes in residence and excessive credit applications may raise doubts about reliability, as individuals might vanish before fulfilling their payment obligations. If your credit profile is less than perfect, consulting your Clarity Report is advisable.

Clarity Services, Inc.

address: PO Box 5717

Clearwater, FL 33758

Phone: 1-866-390-3118

ChexSystems: The Essential Tool for Uncovering Hidden Financial Histories

ChexSystems is a consumer reporting agency that focuses on tracking debit account history rather than credit accounts. During the process of applying for a mortgage or purchasing a home, lenders may obtain a title report that can reveal information not typically found in credit reports.

This information can include:

Previous foreclosures or short sales
Bankruptcies
Tax liens
Liens from contractors, service providers, or professionals who performed work on your property and were not fully compensated
Judgments for unpaid bills, including credit card debt

These negative records are linked to your Social Security number and can persist even if they are not listed on your credit report. It is crucial to disclose any adverse financial events from the past decade openly. A knowledgeable loan officer can verify these details with a title company and provide guidance on the appropriate course of action. Falsifying mortgage applications constitutes felony fraud and should be avoided.

If you have been rejected when trying to open a bank account, it might be due to information in your ChexSystems report. You can obtain your ChexSystems Consumer Report annually for free and request your ChexSystems score, which they provide at no cost. However, this score is different from traditional credit scores and follows a unique scoring system ranging from 100 to 899, with higher scores indicating lower risk to lenders.

To order via mail: Chex Systems, Inc. Attn: Consumer Relations

7805 Hudson Road, Suite 100 Woodbury, MN 55125

To order online: www.chexsystems.com

To order by phone or discuss any concerns: (800) 428-9623

Safeguarding Your Financial Identity: Key Steps to Resolve Disputes and Protect Against Fraud

The most common reason for disputes on Consumer Disclosure Reports is identity theft. This can involve unauthorized activities such as check writing, ATM withdrawals, or even opening a joint account through signature forgery. By the time you notice these activities, the damage is often extensive. If you’re a victim of identity theft, your initial step should be filing a police report.

Another significant cause of negative ChexSystems Reports is merged identities, which occurs when another individual’s banking data is erroneously associated with yours due to similar names. It is crucial to review your Consumer Disclosure Report for accuracy in your name, address, date of birth, and social security number. If you find any discrepancies, submit a copy of your ID along with an explanatory letter and request for correction.

It is important to note that any communication with ChexSystems must be truthful and accurate. If you’ve had a check returned due to insufficient funds, contact the bank where the issue occurred and inquire about a “pay for delete” arrangement. Where they may agree to remove the incident from your ChexSystems consumer report upon settlement of the outstanding balance. Do not deny it because banks are not legally obligated to grant this request. But many will agree if approached politely and directed to the right person.

Another significant cause of negative Chex Reports is merged identities, occurring when another individual’s banking data is erroneously associated with yours due to similar names. Review your Consumer Disclosure Report for accuracy in name, address, date of birth, and social security number. If discrepancies exist, submit a copy of your ID along with an explanatory letter and correction request.

Reset Your Financial Future: Overcoming Credit Challenges and Embracing New Banking Opportunities

Negative information on a Consumer Disclosure Report has the life span of five years. Your credit report is seven years for most negative items. You don’t to wait the full duration before opening a new checking account and moving forward financially.

Mistakes are part of life’s lessons; it’s better to learn from them rather than resent them. Some individuals, open accounts without grasping basic financial management principles. The next thing you know issues begin popping up like unchecked spending and account mismanagement. then worry sets in.

Stress levels rise, it’s terrible. You can take the opportunity to acknowledge past errors and commit to making positive changes moving forward. Today is a new day to begin building a better financial track record.

You can check into alternative option if you are having trouble opening a new account.

Look for banks or credit unions that don’t rely on ChexSystems or credit reports. GTE Financial’s Go Further Checking, or Varo is an online branch of Bankcorp Bank
Another approach is to start with a savings account at a small or medium-sized local bank or credit union. Demonstrating responsible savings habits can pave the way for eventually opening a checking account, especially if you consistently increase your savings balance over time.

Fundamental rules:

Never spend more than you have.
Avoid dangerously low balances.
Maintain a cushion of funds in your checking account as a safety net, separate from your regular balance.

This buffer, can be $100 or more, serves as a precaution against overdrafts, fees, and the inconvenience of bounced checks. If tracking your balance is challenging, error on the side of caution and maintain a higher cushion.

The use of personal checks has decreased significantly with the rise of digital payment methods like online banking, and mobile payment apps. Checks remain useful in certain situations where digital payments might not be an option, such as paying rent, settling debts between individuals who prefer not to use cash, or making payments where electronic transfers are not feasible.

They are also used by some who may not have access to banking technology or prefer a more tangible method of payment. Additionally, checks can serve a role in business transactions, particularly among small businesses or in industries that have longer-standing traditions of using checks.

Navigating the Fine Print: Understanding Your Bank’s Checking Account Rules and Overdraft Policies

In the checking account agreement for banks are all slightly different from the next. But overall, have similar terms and conditions. They are written with the banks interest in mind. Sometimes overdrafts fees happen and confuse the owner of the account about why the fee was applied. So here are some of the terms that are hard to read in those checking account agreements that have been overlooked.

For instance, if you postdate a check, the bank can choose to process the check before the date specified, and if there aren’t enough funds in the account to cover the check at that time, it could result in the account becoming overdrawn. In such cases, the bank might charge an NSF fee for the returned check, and if they choose to cover the check anyway (resulting in an overdraft), they may also apply an overdraft fee. Similarly, banks could endorse checks on your behalf if you forgot to sign the check.

ATM deposits might not always go through immediately and could cause issues like bounced checks. Cashier’s checks or money transfers need more time to process, so it’s best not to assume you can use that money right away. Also, banks have daily cutoff times for making deposits, if you make a deposit after the bank’s daily cutoff time, your money won’t be available as quickly as you assume. It’s good to know when your bank’s cutoff time is.

Overdraft protection plans come with their own set of limits, including how much they cover and how long they last. It’s important to carefully check the specifics of your plan because it might not cover as much as you think.

Mastering Credit Scores for Empowered Financial Decisions

Published May 2, 2024 | By fvdqfqmy

Ordering Your Credit Report

1

Annual Credit Report Request Service

P.O. Box 105281

Atlanta, GA. 30348- 5281

Click here to Download the sample letter for Ordering your reports

3 digits will indicate whether or not a consumer will be responsible and fulfill financial obligations. Can you handle credit or is it too overwhelming? This number is based on all the information that is found in your credit profile. Your credit profile changes all the time. Data is added and removed from your profile all the time. This results with a different number. The number can be from 300 to 850. The higher the number, the less of a risk you are. Within this range, there are 5 tiers.

800-850 Excellent
740-799 Very Good
670-739 Good
580-669 Fair
300-579 Very Poor

When Your Credit Score Really Matters

Your credit score is important to know in several key situations where your financial health and capability are assessed by others. Here are some of the main circumstances when knowing your credit score is particularly crucial:

Applying for a Loan or Mortgage: Lenders will check your credit score to determine your eligibility for a loan and the interest rates you will be offered. A higher score generally means more favorable loan terms.
Credit Card Applications: When you apply for a new credit card, issuers will look at your credit score to decide whether to approve your application and to set the terms of your credit, such as your limit and interest rate.
Renting a property: Many landlords use credit scores to assess potential tenants’ reliability. A higher score might improve your chances of securing a rental and could reduce the requirement for a larger security deposit.
Employment Screening: Some employers check credit scores as part of the background check process, especially for positions that involve financial responsibilities or handling money.
Insurance Premiums: Insurers may use what’s called a credit-based insurance score to determine your premiums for auto and homeowners’ insurance. A better score can lead to lower premiums.
Planning Financial Goals: Knowing your credit score can help you understand your financial standing and guide you in improving your financial health, which is beneficial for long-term planning like buying a house or saving for retirement.
Before a Major Purchase: Checking your score before making large purchases or undergoing significant financial transactions can give you a better sense of what financial products you might qualify for and help you negotiate better terms.

Do not get hung up on your credit score. Your credit score doesn’t exist until your credit is pulled. The FICO’s scoring model will analyze the data in your credit file at that point in time and calculates your credit score. Unless you’re shopping for a home loan or an auto loan, your credit score is similar to a one-time use.

Sometime in the following month your file will be updated. If your credit score is pulled, it will automatically be calculated. It will be a different score.

It’s assumed that credit reports are 100% correct. A lender will not review your credit report with you to make sure everything is correct when you apply for a loan. Your current creditors do not check to make sure there are no overlooked errors in your file when they update it before they report to the credit bureaus.

Evidence shows that the majority of credit reports contain all types of errors. But you’ll never have anyone inform you of errors. Who would even know if your date of birth is wrong on one of your reports? The agency that reviews credit reports and verifies every piece of information on consumer reports is 100% accurate, does not exist. But yet the law states inaccurate information cannot be added to a consumer’s credit file.

The Hidden Errors: Credit Report Inaccuracies

Here are statistics from a study that was conducted by the National Association of State Public Interest Research Groups.

79% of credit reports contain errors.
54% include personal information that is incorrect.
22% of reports have loans that were listed twice.
8% of reports were missing positive credit information that boosts credit scores.
30% of reports included open accounts that had been closed and paid off. But this can help you if it is a closed account that has been paid-as-agreed. If the closed account has late payments, then it will work against you.

Where is the law at in these situations? Well, the law is waiting for the consumer to request action. Until then, the credit bureaus are not required to do anything. Nothing happens unless a consumer exercises their rights. Unfortunately, consumers are not the credit bureaus customers. We are customers of the furnishers. The furnishers are the credit bureaus customers.

The credit bureaus are just taking the information reported to them and updated the credit files. So, the fault is put on the furnishers. Now the credit bureaus are in the position of taking sides. Do they side with the consumers? Or do they side with their customers?

They are going with whatever their customer says. That is very important,

Practical Tips for Credit Management

If you do these three things,

keep your overall balance below 10% when all credit cards combined and individually keep card balances under 10%.
Pay on time.
pay off balance when it is due, eliminating the possibility of having a balance roll over to the next month.

You will never have to worry about your credit score. You will know that your score is top notch.

Your job is to review your reports. Every three months request one of the three reports you get for free. Making sure your file has not merged with someone else’s file. You’re also checking for possible identity theft. Making sure all your accounts are accounts that you opened. Keep vigilant about identity theft.

Step 1

The first thing you want to do if you have reports from the credit bureaus that are not more than a year old, review them for any inaccuracies. Otherwise you need to order them. This time you want all three reports. After you clean your report, and you know your credit file is 100% accurate. The following years you can order 1 free report every three months to remain vigilant.

If you didn’t know, reporting information to the credit bureaus is voluntary. So, your three reports may not be the same across the board. Maybe one of your creditors only reports to TransUnion. Your other reports will not have that specific account on them. The credit bureaus are just businesses who collect, store, make available, and sell information about consumer’s creditworthiness. The furnishers who report to the credit bureaus pay them to report. The furnishers are then able to use their databases of consumers and they can then market their financial products to targeted consumers.

Quick overview of the credit bureaus origins

In the retail sector back in the 1800’s small agencies that were local to their area, started collecting information on the creditworthiness of customers and then selling it. That’s when the idea of collecting information about individual’s creditworthiness was formed. In 1899, the Retail Credit Company began collecting and selling customer credit information to businesses.

In 1975, the company became Equifax. TransUnion popped up in 1968, And Experian was a firm that started in 1960 over in the U.K., who expanded their offices to the United States.

Computer technology in the 1960’s and 1970’s allowed credit files to transition into the way credit information is handled today. The FCRA was passed in 1970 because there was an increase of concern with consumer’s about the privacy and accuracy of this data. It is 2024, 55 years later and we still have privacy and accuracy issues.

Back to step 1 in repairing your credit. Request your credit report directly from the credit bureaus through the mail. Before you can dispute any information with a credit bureau, you need to have your official credit report, as it serves as the basis for your challenges. Reports obtained from loan officers or other 3rd party websites won’t cut it; they are the middleman, and you cannot be sure that the information is the same as the credit bureaus.

The free scores these sites provide are not FICO scores. In the credit and mortgage industries, FICO scores are the standard. You can now purchase your consumer FICO score from FICO. Credit scores that are not FICO scores are only good for using as a gauge for your upward progress for credit repair. Such as VantageScore 3.0 and credit monitoring service websites. Do not rely on them because you will set yourself up for a big disappointment.

Use the address below and send a letter to get your credit reports.