VantageScore vs. FICO

I'm hearing reports that lenders are turning to VantageScore credit results vs. FICO scores, and consumers are getting turned down for loans because of it.
FICO -- Fair Issac Co. -- has had the market cornered for years. The new VantageScore is the result of the 3 Big credit reporting firms Equifax, Experian, and TransUnion banding together to roll out their own version that they can market to banks themselves.
I've written about this in past posts. It will be interesting over the next year to see how lending institutions embrase Vantage over FICO, and if there will be a backlash from angry loan applicants.

Time, effort solves most credit problems

The passage of time makes us older and wiser... and it can help clean up your credit report if you do certain things right.
Derogatory credit information is supposed to be automatically removed from your credit record within seven years.
So, it only seems logical that one long-term option is that you simply wait this period out, then resume using credit. This is fine if you have no need of a home, a car, a job, travel plans, vacations, clothes, and you prefer to work on an all-cash basis. You will never buy anything online or by mail order, and you'll shun every mall and shopping center you pass by in your day-to-day life.
From my point of view, however, this is a very bad way to approach your credit repair strategy.
You don't need to wait more than 1-3 years to obtain new credit. But, here's the rub: you must avoid adding any more derogatory marks to your credit history. Not a single one! Today is the day you clean up your credit, once and for all. Each late payment or over-limit fee resets that 7-year clock ticking, and you're back to square one again.
The key really is quite simple: demonstrate prompt payments on every debt you owe from this date forward. No excuses, just do it.
Add to this true income stability and a healthy debt-to-income ratio, and you'll be well on your way to improving your credit in short order.
Based on my own experience of dealing with bad credit it the past, you will typically be mailed charge card and credit card applications within 12-18 months if you can show a steady income. Then, after opening and correctly using -- and not abusing these new forms of credit -- more offers will appear.
There are people who ask me: "What if my credit report still contains bad information about me after all this work to clean it up?"
My answer is: You have the right to have inaccurate derogatory information removed from your credit report. Accurate derogatory information stays put. You'll have to deal with it.
A credit report that contains errors is easy to clean up. You can use the free process provided to everyone under the FCRA (The Fair Credit Reporting Act). But you should only dispute derogatories that are in error. Disputing accurate negative credit entries may work in some instances -- as where a creditor doesn't have the time or manpower to respond to every credit bureau reinvestigation request received.
If a creditor does not respond to a written request to reinvestigate that person's credit report, according to the FCRA, the disputed information is required to be removed from that person's credit report. Pure and simple, cut and dried.
The result is that a consumer can have correctly reported derogatory credit information removed from his or her credit report quite easily. But that still doesn't make it right, and might not work in many instances.
It's been reported that half of all disputed items are removed from a credit report every time a dispute is filed. There is no limit to the number of times you can dispute the same item of credit information.
However, it's not ethically right to make a frivilous or fraudulent request to clean up your credit. The right thing to do is check your credit, sweep out the inaccurate items littering your reports, make positive entries as best you can, and commit yourself from here on out to make better use of credit and to pay all your bills on time, every month, rain or shine.
And let time help you heal the bruises of bad credit once and for all!
It can be done. I've done it. Millions of other consumers can do it, and you can do it to!

Getting Out Of Credit Card Debt

5 Steps to Credit Card Debt Reduction and Saving Money With This DIY System

By Peter Webber

Have you succumbed to the lure of credit cards and found yourself in a bit of a pickle because of it?

Pull up a chair and have a seat - Welcome to the ever growing club of consumer debt. Your biggest challenge now is to dig yourself out of this situation and avoid having to pay anyone to help you do it.

The options at this stage are usually as follow (depending on the level of credit card debt):

• Consolidate into a loan.
  
  
  
• Debt Management.
  
  
  
• Bankruptcy.
  
  
  
• Do Nothing.
  
  
  
• Just pay off the cards over as long as it takes.
  
  
  
• Make the minimum payments and keep spending.
  
  
  
• Make an effective DIY plan.
  
  
  

The more popular solutions - such as consolidation loans and debt management -we see being touted everywhere are the ones that put your money in other people’s pocket. I don’t know about you but for me becoming free from debt should not involve spending more money, or *borrowing your way out of debt*.

So how does a DIY system work?

To break it down into 5 steps it looks something like this:

1. Address your spending habits and why you are in this situation.

To ever win with money and have a comfortable financial future you have to control your money – not the other way round. Take complete control and set yourself some realistic yet desirable goals for the future.

2. Know your options, the ins and outs of how they work – and why they are not for you.

Along the way you will be tempted by quick fix ‘make it all better’ solutions like consolidation loans and debt management. As mentioned already there is a multibillion dollar industry making a very healthy profit from consumer debt. Your DIY plan does not involve *paying to get out of debt*.

3. Know your situation.

Any debt relief system requires a bit of budgeting. As long you’ve followed the rest of the plan so far, have desirable goals and no intention of taking an easy -and expensive – way out you won’t have trouble budgeting.

The other thing to know is your credit score. There are a staggering amount of mistakes found on credit scores that result in people paying more interest than they should. If you are eligible for lower rates and 0% APR cards to move expensive balances on to – you need to know about it.

4. Minimise outgoings, Maximise income and leverage your cash flow.

If you could be paying less for utilities and day to day expenses you should. There is a very fine art of money saving that you will become very good at if you’re going to be successful at this.

Home economics, consumer education and bargain hunting can save you incredible amounts of cash that can go toward paying off your debt quicker.

If you’re really serious you can take it a step further and create a secondary source of income. Be it a second job, or using a natural skill/strength you have that can earn you money in your spare time.

With the opportunities available online it’s never been easier to find those who are seeking out some knowledge, experience and skills that you have and that they would pay you money for.

5. Form your system and put it into action.

Having followed the first 4 steps and laid some sturdy foundations you are now in a position to develop a quite powerful ‘snowball’ plan. That is a system that gains momentum as you execute it.

This step is completely dependant on the first 4 steps and generating an extra figure that you can assign to snowballing your credit card debt. As the debts get paid off the figure grows and subsequently clears the rest of the debts a lot quicker – saving you a tidy amount of interest in the process.

It is very possible use a DIY plan and enjoy great success from it, yes it takes a bit of hard work and discipline on your part but the alternatives just cost you more and keep you in debt for longer.

It’s your money, it’s your life – if you want to truly own them both then you have to take control – not give it over to someone else. Control or be controlled, the choice is yours...

Peter Webber is the creator DIY debt relief systems such as the 100% DIY Credit Card Debt Busting System - http://www.smash-credit-card-debt.com - that enables you to take control of your finances and beat credit card debt a lot quicker than paying for expensive consolidation loans or debt management schemes.

Article Source: Peter Webber

Raise Your Credit Score 100 Points

Clean Up Your Credit Report and Raise Your Credit Score 100 Points

By Vincent Dail

Your credit report contains information about where you work, live and how you pay your bills (On time or not). It also may show whether you've been sued, arrested or have filed for bankruptcy with in the last 10 years. Companies called consumer reporting agencies (CRA's) or credit bureaus compile and sell your credit report to businesses all over the world.

Many financial advisors suggest that you periodically review your credit report for inaccuracies or omissions. This could be especially important if you're considering making a major purchase, such as buying a home. Checking in advance on the accuracy of information in your credit file could speed the credit-granting process, clean credit is a must.

Because businesses use this information to evaluate your applications for credit, insurance, employment, and other purposes allowed by the Fair Credit Reporting Act (FCRA), it's vitally important that the information in your report is complete and accurate.

Whenever you apply for any type of credit or financing, a credit report is pulled from at least one of the three major credit bureaus. You want a clean credit report to be pulled. While there are hundreds of smaller credit bureaus around the country, virtually every credit bureau is affiliated with either Experian, Trans Union, or Equifax.

Getting Your Clean Credit Report

If you've been denied credit, insurance, or employment because of information supplied by a credit reporting agency, the FCRA says the company you applied to must give you the agency`s name, address, and telephone number. If you contact the agency for a copy of your report within 60 days of receiving a denial notice, the report is free. In addition, you're entitled to one free copy of your report a year.

If you simply want a copy of your report, call each credit bureau listed since more than one agency may have a file on you, some with different information.

The three major national credit bureaus are:

Equifax, P.O. Box 740241, Atlanta, GA 30374-0241; (800) 685-1111.

Experian (formerly TRW), P.O. Box 2002, Allen, TX 75013; (888) EXPERIAN (397-3742).

Trans Union, P.O. Box 1000, Chester, PA 19022; (800) 916-8800.

Correcting Errors For Clean Credit.

To protect all your rights under the law and to keep your credit clean contact both the CRA and the information provider.

First to get clean credit reports, tell the credit reporting agency in writing what information you believe is inaccurate. Include copies (please keep your originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request deletion or correction. Always keep copies of your dispute letter.

They must reinvestigate the items in question, usually within 30 days, unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the information provider. After the information provider receives notice of a dispute from the CRA, it must investigate, review all relevant information provided by the CRA, and report the results to the CRA. If the information provider finds the disputed information to be inaccurate, it must notify all nationwide CRAs so they can correct this information in your file. Disputed information that cannot be verified must be deleted from your file, then you will recieve a clean credit report, with that item removed.

If your report contains erroneous information, the CRA must correct it(clean credit).

If an item is incomplete, the CRA must complete it. For example, if your file showed that you were late making payments ( 30 days or more), but failed to show that you were no longer delinquent, the CRA must show that you're current.

If your file shows an account that belongs only to another person, the CRA must delete it.

When the reinvestigation is complete, they must give you the written results and a free copy of your clean credit report, if the dispute results in a change. If an item is changed or removed, they cannot put the disputed information back in your file unless the information provider verifies its accuracy and completeness.

Also, if you request, they must send notices of clean credit report corrections to anyone who received your report in the past six months. Job applicants can have a corrected copy of their clean credit report sent to anyone who received a copy during the past two years for employment purposes. If a reinvestigation does not resolve your dispute, ask the CRA to include your statement of the dispute in your file and in future reports.

Second, in addition to writing to the credit agency, tell the creditor or other information provider in writing that you dispute an item. Again, include copies (please not originals) of documents that support your position. Many providers specify an address for disputes. If the provider then reports the item to any credit reporting angency, it must include a notice of your dispute. In addition, if you are correct that is, if the disputed information is not accurate the information provider may not use it again, thus you will have a clean credit report.

When negative information in your report is accurate, only the passage of time can assure its removal. Accurate negative information can generally stay on your report for 7 years.

Clean Credit: There are certain exceptions:

Bankruptcy information may be reported for 10 years.

Information about criminal convictions may be reported without any time limitation.

Credit information reported in response to an application for a job with a salary of more than $75,000 has no time limit.

Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Criminal convictions can be reported without any time limit.

Credit information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.

Adding clean credit accounts to your file:

Your credit file may not reflect all your clean credit accounts. Although most national department stores and all-purpose bank credit card accounts will be included in your file, not all creditors supply information: Some travel, entertainment, gasoline card companies, local retailers, and credit unions are among those creditors that don't report clean credit.

If you've been told you were denied clean credit because of an insufficient credit file or no credit file and you have accounts with creditors that don't appear in your credit file, ask the CRA to add this information to future reports. This will help get you on the road to a clean credit report. Although they are not required to do so, many CRAs will add verifiable accounts for a fee. You should, however, understand that if these creditors do not report to the CRA on a regular basis, these added items will not be updated in your file.

For More Infomation Visit: http://www.credit-repair-specialist.com For The Very Latest, Articles And Tips On Credit Repair and To Raise Your Credit Score Yourself Visit http://www.raise-your-credit-score-yourself.com

Article Source: http://EzineArticles.com

Parts Of Your Credit Report & What Each One Means

Guest Editorial By Cathy Taylor

So you ordered a copy of your credit report to check for inaccuracies and get the most from your credit score. Now how do you read it? Your credit report is read and used by any number of people you deal with on a daily basis, from your landlord to your employer to a potential lender. Fortunately, it has gotten easier to order a copy of your report, but it's not so easy to understand what all those abbreviations and numbers mean once you've got it.

Log onto your computer and order your free yearly copies from all three agencies and check for the availability of the annual reporting program in your area at the same website: www.annualcreditreport.com . Each report will contain different information because retailers and creditors only report to the agency in their area or with whom they have an agreement.

Once you have your credit report in your hands, you will see that it is divided into four main sections:

• Consumer information

• Account histories

• Public records

• Inquiries

Double check the accuracy of your identifying information. This will include your name, address, phone number, previous addresses, date of birth, and Social Security number (SSN).

Next, for each account history, or trade line, you will see the following information:

• Date you opened the account

• Type of credit account (either installment, such as a car loan or mortgage, or revolving, such as a credit card)

• Name(s) on the account

• Total loan amount, credit limit, or highest card balance

• Amount you currently owe

• Amount of your monthly payment

• Account status (either open, closed, inactive, paid, or other)

• How promptly you have paid on the account

Credit agencies vary as to how they word various sections of the report and should provide you with a guide to reading their versions. One agency might report in the last column of an account history that you paid “on time” or “30 days late.” Another agency might use a numeric code to rate how well you paid off a debt. R1 is the code used for an excellent repayment history on a revolving charge account. I1 is the code used for an excellent repayment history on an installment account. Obviously, the higher the number next to either the R or I, the lower your repayment history is rated. So an R4 would indicate a history of late payments.

The public records section will include any tax liens, bankruptcies, judgments, or other financial-related legal matters. Depending on the type of action taken, these damaging records may stay on your credit report for up to 7 to 10 years.

The last section lists the inquiries made on your credit. Hard inquiries are those requests to pull your credit when you apply for such things as loans or lines of credit for services. Soft inquiries result when companies sending out promotional items to pre-qualified individuals check your history or when your current creditors check your payment status. The soft inquiries only show up on the report that you order, not on reports pulled by lenders.

While too many inquiries in a short period of time can signal a red flag to a lender, most credit scoring models are least affected by this portion of your report.

Check your report for any errors and report them immediately in writing. If you need more information about how to reach the three main credit bureaus, please go to www.apscreen.com.

Don't forget that the credit agency providing your report is also a great source of information on not only reading your credit report, but raising your credit score.

Cathy Taylor is a marketing consultant with over 25 years experience.
She specializes in internet marketing, strategy and plan development,
as well as management of communications and public relations programs
for small business sectors. She can be reached at Creative Communications:
creative-com@cox.net or by visiting http://www.apscreen.com

Article Source: http://EzineArticles.com

Credit cards on your credit report

DEBTSMART®:

Which credit cards look better on your credit report?

by Scott Bilker

Editor's Note: Guest Author Scott Bilker is the founder of DebtSmart.com and the author of Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. You can send your questions about money, credit, loans, mortgages, or debt, to him at: Scott Bilker, PO Box 563, Barnegat, NJ 08005-0563 or online at: http://www.debtsmart.com/askscott .

Scott is a frequent contributor to our sister site: http://findhow2.com

Scott,
Let me start off by saying I love this website! I have a couple of questions. I have been told that certain credit cards (e.g. Capital One, Cross Country, and others like those) do not carry a lot of weight on your credit report. I was always under the impression that all credit cards carried the same weight. What is the truth?
My next question concerns paying them off. I would like to pay off my credit cards. Should I just pay them off and try not to use them? (I have tried this before and failed). Or should I just go ahead and cancel them.
I am really getting sick and tired of credit cards and I want to stop using them because they put too much pressure on me. Please advise.
Thanks,Nichole

Great questions! It certainly does make sense that some credit cards will look better on your credit report. However, I would think that it depends on who's looking. I'm sure that each bank has their own criteria for deciding how to "score" your report based on its contents. (FYI, you can get a free copy of your credit report each year from AnnualCreditReport.com.)
In fact, my suspicions of this are proved correct after speaking with Norm Magnuson, President of Public Affairs, from the Consumer Data Industries Association.

Scott: "Are there certain types of credit cards that look better on a credit report."
Norm: "The lenders make that decision."
Scott: "Can you tell if a secured or unsecured credit card is listed on a credit report, and does that affect your score?"
Norm: "No, they don't designate secured or unsecured."
Scott: "So all lenders have their own criteria."
Norm: "Oh, absolutely. All 10,000 lenders develop their own underwriting criteria. Some, because of their interest rates, and other factors, are willing to provide cards or loans to consumers that might be less credit-worthy than others. With all of the competition out there, you ought to shop around for credit."
Scott: "That's a fact! The only way these banks are going to get new people is to steal them from other banks."
Norm: "They do that by providing better terms and rates."
Scott: "As far as your credit report goes, is it better to have higher limits or lower limits?"
Norm: "Limits don't matter as much as utilization rate. Percent outstanding to credit limit. The ideal is about 33% to 34%."
Scott: "Do you mean ideal for scoring?"
Norm: "Yes. The less credit you have outstanding, relative the limit, the better off you are."
As far as paying off your credit card goes, that's always a good plan. I do, however, recommend that you do not close your accounts. You may need them to make the banks compete for your business in the future. You don't want to be at the mercy of any one bank.
I do understand that you've tried to do that in the past. That is, keep your zero-balance cards and not use them. You mentioned that this failed. I'm guessing you mean that you continued to spend on those credit cards after they were paid off. What I do is put all credit cards with a zero balance in a file. I call that file the "credit-card graveyard," where I leave cards that are not intended for use. This helps avoid any sort of impulse purchasing. Later, if I decide that I really do need to use one, I just "exhume" a card.

Sample Credit Repair Letter

Guest Editorial: "Sample Credit Repair Letter"
By Patsy Rose

This article includes a sample credit repair letter. Letters like these are sent to a credit bureau or credit reporting agency to report inaccuracies on your credit report. If you are surfing the web looking for information about credit repair, you will find free credit repair sample letters at several sites, but you will also find that there are software programs with “fill in the blank” type letters. Whether you choose to pay for a sample credit repair letter or use a free one, the process is the same.

A credit repair sample letter is actually one of several steps in the whole credit repair process. Before the letter writing can begin, you will need to obtain copies of your credit report. A recent law has made it easier for consumers to access their credit reports. There is a new website, new phone numbers and addresses for the credit bureaus. All of this information and a sample credit repair letter is available at the official website of the Federal Trade Commission.

Once you have your credit reports, you will need to check them for inaccurate information and report the inaccuracies to the applicable credit bureau. This is also referred to as a dispute or disputed information. Whether you use the exact wording shown here or the wording used in another credit repair sample letter, the important thing is to be unemotional and state the facts.

Sample Credit Repair Letter:

Today’s Date

Some sample credit repair letters suggest that you include your name and address at this point, others include it at the end. The FTC’s credit repair sample letter suggests the use of the phrase “complaint department”. The use of that phrase, as well as where to put your name and address seems to be a personal choice.

Address of the Credit Bureau which is reporting the inaccurate information:

Equifax

PO Box 740256

Atlanta, GA 30374-0241

Trans Union

PO Box 2000

Chester, PA 19022

Experian

PO Box 2104

Allen, TX 75013

Re: Credit File Problem

To Whom It May Concern: (Dear Sir or Madam)

I recently reviewed a copy of the credit file your company maintains in my name. While doing this, I identified the following problem(s): (The sample credit repair letter suggested by the FTC is written a little differently.)

I have enclosed the following documentation that supports my claim:

If you have any “proof” that the information is inaccurate, (statements, cancelled checks, the “proof” depends on the individual item) list it here and enclose a copy (not the original). If it is not possible to provide “proof”, for instance if you do not believe that you ever had an account with a listed company, simply state what information you are trying to correct and leave out the line about documentation.

Please investigate and correct this (these) problem(s) as quickly as possible and send a corrected copy of my credit report to my home address.

You may want to include a copy of the inaccurate credit report with the disputed information circled or highlighted. If you are disputing several items, you can use one letter for all or one letter for each. The credit bureaus may be less likely to consider a claim frivolous if you send one letter for each disputed item. They are not required to investigate disputes which they consider “frivolous”.

A sample credit repair letter closes formally, using “Sincerely” and your signature.

If you do not receive a response from the credit bureau within 30 days, you can send a follow-up letter. A follow-up credit repair sample letter follows. The date, greeting, closing and addresses would be the same. The body of the letter would be something like this:

On (applicable date), I contacted this bureau regarding the inaccurate information in my credit file. I have waited a reasonable amount of time and have received no reply regarding my dispute. Please correct this information immediately.

You may want to include a copy of the original letter, credit report and any documentation that you originally sent. If the credit bureaus do not respond to your requests; if you cannot achieve results using this or another form of credit repair sample letter, contact an attorney, preferably one that specializes in credit repair issues. For more information about the sample credit repair letter, visit the Credit Repair Blog.

The writers and editors are dedicated to providing accurate credit repair information. Visit us at http://creditfixnow.blogspot.com

Article Source: http://EzineArticles.com/?expert=Patsy_Rose

You can learn more credit repair tips at FindHow2.com.