Credit Secrets & Tips Blog

Upon receipt of your dispute letter, the credit bureau first reviews and considers the relevant information you have submitted regarding to the nature of your dispute.

If the review doesn’t resolve your dispute and further investigation is required, notification of your dispute is provided to the creditor, including the relevant information you submitted.  The creditor reviews the information provided, conducts an investigation and reports the result back to the credit bureau.

The credit bureau then makes deletions, or changes to your credit file based on the creditor’s investigation result.  The name, address, and the telephone number of the creditor is shown under the result section on the cover letter that comes with the copy of your revised credit file.

If you still disagree with an item after it has been verified, you may send second or third dispute letter with additional documents to support your dispute.

You may also send a 100 words brief statement, explaining the nature of your dispute.  Your statement will become part of your credit file and will be disclosed each time that your credit file is reviewed.

You have the right to request that the credit bureau sends your revised credit file to any company that received your credit file in the past 6 months for any purpose or in the past 2 years for employment purpose.

Remember, the credit bureau is not necessary to do so unless you ask!

As a rule, credit score analyze the credit related information on your credit report.  How they do this varies.  Since FICO scores are frequently used, here’s how these scores assess what is on your credit report:

1.  Your payment history - about 35% of a FICO score

Have you paid your credit account on time?  Late payments, bankruptcies and other negative items can hurt your credit score.  But a solid record of on-time payments help your score.

2.  How much you owe - about 30% of a FICO score

FICO scores look at the amount you owe on all your accounts, the number of accounts with balance, and how much of your available credit you are using.  The more you owe compared to your credit limit, the lower your score will be.

3.  Lengthy of credit history - about 15% of a FICO score

A longer credit history will increase your credit score.  However, you can get higher score with a short credit history if the rest of credit report shows responsibility credit management.

4.  New credit - about 10% of a FICO score

If you recently applied for or opened new credit accounts, your credit score will weight this fact against the rest of your credit history. FICO score distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. 

If you need a loan, do your rate shopping within a focused period time, such as 30 days, to avoid lowering your credit score.

5.  Other factors - about 10% of a FICO score

Several other minor factors also can influence your score.  For example,  having a mix of credit type on your credit report - credit cards, installment loans such as a mortgage or an auto loan, and personal lines of credit - is normally for people for with longer credit histories and can add slightly to the credit score.

Predatory lenders do not have horns and tails.  They seems like nice, friendly, helpful people.  They are trained to gain your trust. So how will you know one?

1.  None of your questions get answered, or the answers don’t really make sense.  A good lender can explain your loan in everyday language. 

2.  The lender pressures you to sign things before you’re ready or rush you through the paperwork.  A good lender won’t pressure you. 

3. The ledner doesn’t explain or tell you about all the costs for getting a loan. A good lender will explani the costs and the service you’re geting. 

4. Things change at the closing. You’re not getting the loan your were promised.  A good lender will honor their commitments. 

5. The ledner wants you to borrow more money than you need.  A good lender will let you decide how much money you borrow. 

6. The lender makes you feel like you don’t ave other choices, as if other lenders won’t give a loan.A good lender will let you know you have other options. 

7. The lender gives you a quick yes, but it may not be the best loan for you.  A good lender will take time to explore your options with you. 

8  You have a feeling somethings just not right.  Follow your instincts.  A good ledner makes you feel informed and confident.

Don’t let a predatory lener pressure you into a costly loan. The best advice is walking away from those lenders.   If you have questions about your loan, visit www.dontborrowtrouble.com for free advice.

Credit and charge card fraud costs cardholders and issuers hundreds of millions of dollars each year. While theft is the most obvious form of fraud, it can occur in other ways.

For example, someone may use your card number without your knowledge.  It’s not always possible to prevent credit or charge card fraud from happening.

But there are a few steps you can take to make it more difficult for a crook to capture your card or card numbers and minimize the possibility.

1.  Sign your cards as soon as they arrive.

2.  Carry your cards separately from your wallet,in a zippered compartment, a business card holder, or another small pouch.

3.  Keep a record of your account numbers, their expiration dates, and the phone number and address of each company in a secure place. Keep an eye on your card during the transaction,and get it back as quickly as possible.

4.  Void incorrect receipts.

5.  Destroy carbons.

6   Save receipts to compare with billing statements.

7.  Open bills promptly and reconcile accounts monthly, just as you would your checking account.

8.  Report any questionable charges promptly and in writing to the card issuer.

9.  Notify card companies in advance of a change in address.

10. Don’t lend your card(s) to anyone. Don’t leave cards or receipts lying around.

11. Sign a blank receipt. When you sign a receipt,draw a line through any blank spaces above the total.

Pre-approved cards are the result of one bank who now has you as a customer, and sells your name to another bank or a series of banks so they can offer you their credit cards.

Here’s how it usually works:

Many smaller banks want to be credit card issuers but, because of limited facilities for credit card processing, it is sometimes difficult for a smaller bank to cash in on the credit card boom.

What’s been developed is an interconnect system where large banks will process credit card applications and issue the credit cards for the little banks.

For example, let’s say that Mini Savings & Loan wants to get in on the Plastic Pursuit.

However, Mini does not have the facility or the staff to process credit card applications and issue credit cards. What Mini has to do is contract the service with Maxim Bank.

Since Maxi has several banks that they provide this service to, Mini Savings & Loan is just a welcome addition to their roster of client banks for whom they process and issue credit cards.

When you apply for a credit card at Mini Savings & Loan, your application is actually forwarded to Maxim Bank who runs a credit check and, granting you have good credit, issues you your choice of VISA or MasterCard with Mini Savings & Loan’s name on it.

However, since Maxim is the issuing bank and it has your credit on their file, they can very well send you an application for their own credit card. They can also sell your name to their other client-banks who can offer you their credit cards on a pre-approved
basis.

Another source that sells your name is the credit bureau. Because they can program their computers to search for names of existing credit card holders with clean and healthy files, they can provide issuing banks with a premium mailing list of people to whom the banks can send pre-approved credit card applications.

There are a wide variety of myths floating around about what you should and shouldn’t do to improve your credit reports and credit scores. This post provides you the truth about credit:  
 
1.  Your score will drop if you check your credit

Fortunately, this one is definitely not true. Checking your own report and score is counted as a “soft inquiry” and doesn’t harm your credit at all. Only “hard inquiries” from a lender
or creditor, made when you apply for credit, can bring your credit score down a few points.

Worried about damaging your credit while shopping around for a loan? Multiple inquiries for the same purpose within a short amount of time (a few weeks) are grouped together into a less damaging period of inquiry.

2.  Closing old accounts will improve your credit score

To close or not to close, that is the question. Many people advocate closing old and inactive accounts as a way for improving your credit.

In most cases, closing accounts will actually have the opposite effect. Canceling old credit accounts can lower your credit score by making your credit history appear shorter. Think twice before closing the oldest account on your credit report.

If you want to reduce your levels of available credit, ask for your credit limits to be lowered or close newer accounts instead.

3.  Once you pay off a negative record, it is removed from your credit report.

Negative records such as collection accounts, bankruptcies and late payments will remain on your credit report for 7-10 years.

Paying off the account before the end of the set term doesn’t remove it from your credit report, but will cause the account to be marked as paid.  It is still a good idea to pay your debts, it can improve your credit score, but the major improvement will come when the record expires.

4.  Being a co-signer doesn’t make you responsible for the account

When you open a joint account or co-sign on a loan, you are taking on legal responsibility for the account. Any activity on these shared accounts, good or bad, will show up on both people’s credit reports.

If you co-sign for a friend’s auto loan and they don’t make the payments, your credit profile will be hurt by their actions and visa versa. The only way to stop this double reporting is to refinance the loan or to have the creditor officially remove you from the account.

5.  Paying off a debt will add 50 points to your credit score.

Your credit score is calculated using a complex algorithm that takes into account hundreds of factors and values. It is very hard to predict how many points you can gain by changing one factor.

For a person with a high credit score, just one late payment can cause a significant drop. If a person has a low credit score, it may not cause a large drop at all.

There is no magic way to improve your credit score, just keep paying your bills on time, reducing your debts and removing negative inaccuracies from your credit report.  Good financial behavior and time are the two most important factors for your credit score.

For most people, financial health doesn’t depend on how much they earn, but how much they spend.  To find out where your money is going, start carrying a pocket-size spiral notepad with you all the time, and write down every purchase you make, including the amount. 

Even if it’s a soft drink form the convenience store, or a trip to drive-thru at a fast-food restaurant, record it in your notepad. After two weeks, review your notes and ask yourself if you really need all the things you buy.

Upon close inspection, most people are surprised to find out where their hard-earned money is going.  If this is true for your case don’t dismay - almost everybody wastes moeny to some degree.  It’s important to understand that every purchase we make - excluding such absolute necessities as food, rent, and gas for the case - is a choice.

Consider the following examples of how changing some small habits can affect your wallet’s health:

(1).  If you smoke one pack of cigarettes each day, then consider quitting smoke. it would save you nearly $1,500 each year.

(2). If you make it a habit to take long, hot shower, then take a shoter shower.  Water heating is the third largest enrgy expense in your home.

(3). If you drink 64 oz. of bottle water each day, then why cann’t you purify your own water.  It could save $60 each month.

(4). If you have magazine subscriptions delivered to you home, the visit the library or read magazines online.  Do you know the average American family spends more than $100 every year on magazine.

(5). If you buy a snack from a vending machine each day from work, then consider bringing your own snack from home.  It could save you an average of $30 per month.

(6). If you leave the air conditioner or heater on all day, then turn it down when you away from home.  For each 1 degree, you’ll save up to 5% on your heating/cooling cost.

(7).  If you drive even short distances, then walking or biking instead.  According to AAA, mortorist pay an average 68.9 cents per mile.