Do you know that a majority of credit scores are often based on bad information? Approximately 79% of all credit reports contain errors serious enough to negatively change an otherwise decent average credit score to a poor credit score. Whether you have no credit, poor credit or average credit - The Ultimate Credit Ebook will show you, step-by-step the proven techniques and verification letters used by Lawyers and Credit Repair Specialists that will raise your credit score by up to *200 Points Guaranteed or your money back!

Stop suffering with Bad Credit.

Automate Bill Payments for a Higher Credit Score

Have you considered automating your bill payments? One of the greatest steps towards improving your credit is by paying your bills on time, and automating your bill payments means no more late fees, or missing payments when they become due - all of which can wreak havoc on your credit. Plus paying your bills online is safer, faster and much easier to track than using snail mail.

Most banks offer online bill payment in some form, if your bank does not you might want to consider reputable third party companies like mint.com or Paytrust (http://pmb.paytrust.com formerly known as paymybills.com).

To make the most of automated bill payments when trying to raise your credit score, strive to pay at least the minimum payments on your credit cards etc. before they are due.

Mortgage Lenders are Tightening their Belts

Do you have a credit score lower than 680? If your answer is yes and you are in the market for a mortgage, expect to make at least a 20% downpayment before you can qualify for the best interest rates.

The recent subprime mortgage crisis has resulted in a stricter number of guidelines from major lenders such as Freddie Mac and Fannie Mae. Under the new guidelines, before you receive a mortgage rate - lenders will review credit score and down payment information. 100% loans are still available but you will need a credit score of at least 720, preferably 730. If your income is also difficult to verify, you will need a credit score of at least 730.

If you are in the market for a mortgage, ensure that your credit score is the best it can be. With a bad credit score you are definitely in for an unpleasant surprise.

FICO 08

A new credit scoring system is coming soon which promises to be more forgiving to people who may miss an occasional payment.

Fair Isaac Corporation, creators of the FICO score will launch the new credit system which will be known as FICO 08. FICO 08 is supposed to be a better predictor of consumer defaults, a criticism of the current FICO model which failed to help prevent the sub-prime mortgage fiasco.

FICO’s credit scoring algorithm is not widely known, but what is known is:

• Credit scores will still range from 300 to 850
• Your credit history will be factored
• An occasional missed payment will not affect you as much under the current FICO system
• The amount of debt you have will be factored
• Open lines of credit will be factored
• Piggybacking (using another person’s good credit to boost your own) will no longer be allowed.

So how is FICO 08 going to affect your credit score?

You will most likely experience an increase in your credit score if you have different types of credit accounts in good standing, for example mortgages, credit cards and auto loans.
If you have many delinquent accounts, your credit score will take a hit – probably greater than before under FICO 08

Use of FICO 08 is expected to begin sometime this spring, although some lending institutions might take a wait and see approach.

Either way, don’t wait until it’s too late. Start cleaning up your credit now.

Common Credit Score Myths

Are you guilty of believing some of the following myths:

I must have a high credit score because I’m never late paying my bills

Yes, it’s important to be current in paying your bills - but a good payment history only comprises 35 percent of your overall credit score. The other factors taken into consideration when determining your overall credit score are: the amount of debt you owe (30%), credit history length (15%), number of open credit accounts (10%), and available credit types (10%).

My score will go up if I consolidate my credit cards

Yes, it is easier to pay down debt when you consolidate your credit cards, but your credit score could take a hit if you consolidate to fewer accounts with balances that are closer to the maximum available credit. You are considered a lower risk if you have multiple credit accounts, maintain current, and keep balances 25% - 35% of the maximum credit balance.

I can’t have a low score because I don’t even have any credit cards

Your credit score doesn’t care about how much you’re worth— your past borrowing history is what matters most in determining your credit score. If you have a poor or non-existent borrowing history with multiple creditors - your fico score will be lower.

It’s better to close my credit card accounts as opposed to keeping them open

Remember how a good payment history makes up 35% of your overall FICO score? If you close an account that has a positive payment history, your fico score will take a hit.

These are a few of the most common credit score myths out there. Don’t believe the hype.

Need a Quick Bump in Credit? Consider Rapid Rescoring

Let’s say you’re out shopping for a mortgage loan and you’re a few points shy of qualifying for a better rate. Don’t settle for the higher interest rate - you could probably qualify for the lower interest rate by using a rapid rescore to raise your credit score.

Rapid rescoring works by going through a lender (unfortunately this service is not available to consumers) to correct errors / or account for new, positive information in your credit report. This can result in huge savings on credit card payments, mortgage payments etc. Technically you’re supposed to be able to do this on your own, but this can take months. Lenders (e.g mortgage brokers) have relationships with the credit bureaus, and for a fee they can usually have a live person at the bureau working with them to correct errors. This can result in a credit score increase in a matter of days vs. months if you tried to fix errors on your own.

Rapid rescoring won’t clear up all the errors on your credit report, but the few additional points you can gain in as much as a week could mean the difference in hundreds in savings per month on a mortgage.

Frick’s Bill

For those of you who don’t think applying for credit at department stores can affect your credit, tell that to Frederick County Delegate Sue Hecht. She signed up for just two department store credit cards to obtain a 20% discount during her holiday shopping late last year. A few months later, during a credit review she discovered that her score had dropped. And this is someone who has her house and car paid for in full, and never leaves a balance on her monthly credit card payments.

It is a little known fact that credit card companies can increase your interest rates whenever you open a new account. Should consumers be penalized for applying for department store cards in order to receive discounts? Maryland Delegate C. William Frick thinks otherwise and has a bill designed to protect consumers against scenarios like this.

Frick’s bill would prevent credit card companies from imposing penalties, such as higher interest rates, based on factors other than customers not fulfilling the terms of their contracts, which require things like making payments on time.

Sign up for our newsletter to stay informed on developments with this bill.

Are you a Junior? Merged Files may be giving you a Bad Credit Score…

Bad credit information can get on your credit report in many ways. This post will examine the issue known as “merged files” - which is what happens when your credit reports contain inaccurate or incomplete information, such as:

• an incomplete address
• you have a jr. at the end of your name - you could be confused with your namesake father
• a very common firstname and surname, such as a John Smith etc

The possibility of suffering from Merged files is very great if you have a common name, because the credit bureaus could easily insert credit information that doesn’t belong to you in your credit file. Of course you could correct the information with the credit bureaus, but the time lost could cost you in more ways than one. The credit bureaus would like to have you believe that the possibility of file mergers are rare - but this couldn’t be any further from the truth. Read more

Freezing Your Credit Report

In 2007, more than 8 million people were victims of identity theft. As a result, an increasing number of Americans are freezing their credit reports in an attempt to combat identity theft. Freezing your credit information can be an effective way of prevent identity thieves from damaging your credit by obtaining new loans or credit cards in your name. A major disadvantage of freezing your credit is that you will also be denying access to potential creditors who may need to use your credit score to determine your rates, such as insurance companies, potential landlords or employers.

When should I freeze my credit report?

It’s best to consider freezing your credit report if you are not going to be looking for a job, applying for insurance, credit or any other major purchases that you would need credit. A freeze essentially locks down your credit reports, and so no lender or creditor can get access to your credit reports without your permission. And this includes your credit scores. So without access to your credit reports or your credit scores, it’s highly unlikely that they would extend credit to someone who’s trying to commit identity theft on you. Read more

The Five Most Common Credit Report Errors

The Big Three credit bureaus - Equifax, Esperion and Transunion - all use different methods to determine credit scores, often resulting in mistakes such as false delinquencies or accounts that don’t belong to you. These are enough to result in a denial of credit to someone with an otherwise fair credit score - and a poor credit score can prevent you from getting a job or paying higher insurance rates.

The Five most common credit mistakes are:

1. Mixed or mismerged files: Mixed or mismerged files occur when credit information relating to one person is placed in the file of another, thus creating a false description of both people’s credit histories. Mismerging occurs most often when two or more people have similar names, Social Security Numbers (SSNs), or other identifiers (for example, when information relating to Jane A. Doe is put in Jane B. Doe’s file).

Mixed files occur largely because the credit bureaus computers do not use sufficiently rigorous criteria to match consumer data precisely, even when such unique identifiers as SSNs are present. For example, credit bureaus will include information in a persons file even when the SSNs do not match, but other information appears to match. Thus, they have been known to mismerge files when people have similar names and share seven of nine same digits in their SSN.

2. Identity Theft: Identity theft is the fastest growing crime in this country and presents a serious source of inaccuracies in the credit reporting system. But are you aware that credit bureaus - due to their loose matching procedures are to blame for a significant part of identity theft? For example, if an impostor has only adopted the victim’s first name and SSN but not his or her last name or address, the algorithm used by the credit bureaus to “merge” information often will incorporate the impostor’s information into the victim’s file at the time the credit bureau compiles the report. Once the fraudulent debt is reported, often after default and non payment, and especially when collectors begin attempting skip trace searches, the account ends up merged into the victim’s file even though many of the identifiers do not match.

Banking business practices are also to blame, with low security controls in place for the granting of credit. Most people can open credit cards over the telephone, without ever requiring written consent making it easier for criminals to impersonate you. Read more

Raise Credit Score | How to Improve your Credit Score

Are you aware that a poor credit score can:

• Prevent you from applying for a job - employers often check credit reports before hiring, especially in the financial industry or if you will be handling money
• Starting a business - you will be ineligible for trade lines from suppliers or credit lines from a bank
• Obtain utilities in your name - cable, telephone, electric and gas companies may require a co-signer, or require a hefty “deposit” upfront
• Buy a house or rent an apartment - bad credit will mean a higher interest rate or a larger security deposit

The following steps and advice will show you how you can raise credit score or improve your credit score.

Improving Credit Score

1. Always, and I mean always, pay your bills on time. Paying the minimum amount due on credit cards will help you avoid late fees - but you should always pay more than the minimum due, better yet you should pay off the entire balance if you’re able. Also send in your payments BEFORE the due date, to avoid late payments. Here’s an automated checking and savings account that will help you make those payments on time
2. Get a copy of your credit report. You need an accurate picture of where you currently stand credit wise. The only way you can do that is by obtaining your credit score for a fee from the three major credit bureaus, along with copies of your credit reports. Yes you can obtain your credit reports from free from the federal government sanctioned website www.annualcreditreport.com - but your credit reports will not contain your credit scores. The best way to obtain your credit scores from all three bureaus along with your credit reports is from MyFico. Click here to get your reports and credit scores from MyFico
   Read more

   Comments Off