Consumer Credit Solutions
Credit history or credit report is, in many countries, a record of an individual's or company's past borrowing and repaying, including information about late payments and bankruptcy. The term "credit reputation" can either be used synonymous to credit history or to credit score.
When a customer fills out an application for credit from a bank, store or credit card company, his or her information is forwarded to a credit bureau, along with constant updates on the status of his or her credit accounts, address, or any other changes made since the last time he or she applied for any credit.
This information is used by lenders such as credit card companies to determine an individual's or entity's credit worthiness; that is, determining an individual's or entity's means and willingness to repay an indebtedness. This helps determine whether to extend credit, and on what terms. With the adoption of risk-based pricing on almost all lending in the financial services industry, this
report has become even more important since it is usually the sole element used to choose the annual percentage rate (APR).
When you receive credit card offers in the mail, examine the fine print before you accept any offer. Review the following items very carefully.
Annual Percentage Rate (APR) - determine if it varies, how the variation is determined and when can it change.
Period Rate - This is the interest rate used to figure the finance charge on your balance.
Annual Fee - Amount you pay to be a cardholder. All cards do not charge an annual fee.
Grace period - This is the number of days you have to pay your bill before finance charges begin to accrue.
Finance charges - Most lenders calculate finance charges using an average daily account balance. Look for offers that use an adjustable balance which subtracts your payment from your beginning balance.
Other fees - Ask about special fees when you get a cash advance, make a late payment or go over your credit limit.
|
The Fair Credit and Charge Card Disclosure Act requires credit and charge card issuers to include this information on credit applications. BEWARE OF
Teaser Rates - these types of rates are low for a short period of time and then escalate to a higher rate on the balance. Sometimes one late payment could cancel the teaser rate.
Offer to skip a credit payment - If your credit card company invites you to skip a payment without penalty, you may still owe finance charges on your unpaid balance and the interest will probably be adding upon purchases you made after the due date you skipped.
Be thorough in your examination of all credit card offers, it could save you hundreds or even thousands of dollars.
For more information please click on the following link:
http://www.consumeraction.gov/caw_credit_cards.shtml |
|
|
|
|
|
|
Obtaining a Free Credit Report |
|
|
|
|
Question |
|
|
Obtaining a Free Credit Report |
 |
|
|
Answer |
|
|
Normally, the four major Credit Reporting Agencies (CRAs) may charge you up to $9.50 for a copy of your credit report. However, an amendment to the Fair Credit Reporting Act requires each of the CRAs to provide you with a free copy of your credit report once every 12 months. Details on ordering are accessible through the Federal Trade Commission (FTC). You may also request a free copy of your credit report if a company takes adverse action against you, such as denying your application for credit, insurance or employment. You must request your report within 60 days of receiving notice of the action. The notice will give you the name, address, and telephone
number of the CRA that provided the negative information. The four major CRAs are Get Equifax Score Watch Now!
, Experian Triple Advantatge, Innovis and TransUnion.
You may also be entitled to one free credit report a year if you certify in writing that:
Even if you have not been denied credit, you may want to find out what information is in your credit report. Some financial advisors suggest that you review your credit report periodically for inaccuracies or omissions. This could be especially important if you are considering a major purchase, such as buying a home or a car. |
|
|
|
|
Debt Elimination Help
- Free No Obligation Quote
- Lower or Eliminate Interest Rates
- Aggressively Reduce Debt
- Professional Creditor Assistance
- Save Hundreds Each Month
- Must have a Minimum of $5,000 in Unsecured Debt
Credit scores, which are found in an individual's credit report, are figures used by banks, lenders and others to determine your ability to repay a loan. These scores are also used to determine what interest rate you'll receive on a credit card or
mortgage, amount of deposit for some utilities and whether your application to rent an apartment will be accepted.
Credit ratings are determined differently in each country, but the factors are similar, and may include:
Payment record: A record of bills being overdue will lower the credit rating.
Control of debt: Lenders want to see that borrowers are not living beyond their means. Experts estimate that non-mortgage credit payments each month should not exceed more than 15 percent of the borrower's after tax income.
Signs of responsibility and stability - Lenders perceive things such as longevity in the borrower's home and job (at least two years) as signs of stability.
Re-Aging - Through re-aging, a credit history is re-written and you are given a fresh start on that particular account. This can dramatically improve the credit score. In 2000 the Federal Financial Institutions Examination Council (FFIEC) clarified guidelines on re-aging accounts for delinquent borrowers.
Credit cards that are not used - Although it is believed that having too many credit cards can have an adverse effect on a credit score, closing these lines of credit will not improve your score. The credit rating formula looks at the difference between the amount of credit a person has and the amount being used, so closing one or more accounts will reduce your total available credit. This in turn lowers the
percentage of available credit, and the credit score will drop. The credit formula also factors in the length of time credit accounts have been open, so closing an account with several years of history is another avoidable credit mistake.
Credit inquiries - An inquiry is a notation on a credit history file. There are two kinds of notations:
"Soft" Credit Pulls:
A credit bureau may sell a person's contact information to an advertiser purchasing a list of people with similar characteristics, like homeowners with excellent credit.
A creditor can check a person's credit periodically.
A credit counseling agency, with the client's permission, can obtain a client's credit report with no adverse action.
"Hard" Credit Pulls: Hard credit inquiries are made by lenders. Lenders, when granted a permissible purpose by a borrower for the purposes of extending his credit, can check his credit history. Hard inquiries from lenders directly affect the borrower's credit score. Keeping credit inquiries to a minimum can help a person's credit rating. A lender may perceive many inquiries on a person's report as a signal that the
person is looking for loans and will possibly consider that person a poor credit risk.
|
