Your credit score judges you and that is why it is important to have it as high as possible. It would be hard pressed to live in the United States and not be influenced, positive or negatively by your credit score. The obvious examples would be applying for a car loan, or mortgage. However, these days, your credit score will also determine if you will land that dream job or not. Going through life with bad credit is possible but it is also very limiting.

FreeCreditScore.com

How often Should you Monitor Your Credit Score?

Most people guard the money in their wallets closer than they do their credit score. Identity theft is rising and if you have decent credit, you are a target. There is so much riding on a good credit score that it just makes sense to make sure your score is in good shape. One of the ways to do that is to keep track of your credit score and to make sure there are no errors on your credit report.

Your credit score doesn’t change daily although daily actions can lead to significant changes in your score. Most lenders report to the credit agencies once a month and even then there won’t be a substantial change in your score, so monitoring your credit report and score every three months is a good habit. Equifax has a system in place to send an email or text alert to your cell phone if there is any changes in your FICO score or credit report. It would be wise to sign up for that service.

How to Get your Free Credit Report

A quick search online for a free credit report will send back plenty of sites with promises that are sometimes too good to be true. Although these sites can offer a free report once a year, they don’t provide a FICO credit score, which is more accurate than the generic guesses.  Most people only inquire about their credit scores if they’re are needing financing. For a fee, you can request your report and score from each of the credit bureaus: Equifax, Trans Union and Experian. It might not be necessary to have all three. Inquire with the potential lender which agency they use and then request your report from them. However, if you are buying a home, having all three reports is a good idea since most mortgage lenders use all three to make their decision.

By law, you can obtain a free credit report if you are denied credit. You are also entitled, by law, to have a copy of your credit report each year at no cost. Get in the habit of requesting your free copy each year to safeguard your credit. Scribing to a services such as the one mentioned above, will also alert you if anyone applies for credit in your name.

How to Get your Credit Score

The easiest way to receive your FICO Score is through myfico.com.

It is never too Late to Improve Your Credit Score

Your credit score is forgiving. That means that it is never too late to improve it. The whole concept of credit reports and credit scoring can be intimidating to most. However, once you realize what actions to take to improve your score, you might find the challenge both rewarding and stimulating.

Taking the necessary steps to improve your credit will be one of the best decisions you could make. Although it won’t happen overnight, with a few basic steps you will be on the path to creditworthiness.

Request your credit report from each of the credit bureaus and examine each one for any errors. If you do find something that shouldn’t be there, dispute it in writing. A good practice is to send a copy of your credit report with the error highlighted in yellow or circled. They in turn have 30 days to investigate by contacting the lender or remove disputed information from your credit report–Many errors have been found in this manner and removed–improving a person’s score.

Bring your outstanding accounts current as quickly as possible. Communicate with your lenders and ask for a payment arrangement or an extension, anything that will help you stay current and prevent them from reporting you as delinquent. If you have delinquent accounts, don’t hide–communication is the best defense to getting closer to improving your credit.

Check out <a href=”http://www.anrdoezrs.net/click-5347959-10534148″ target=”_blank”>FreeCreditScore.com</a><img src=”http://www.ftjcfx.com/image-5347959-10534148″ width=”1″ height=”1″ border=”0″/> and <a href=”http://annualcreditreport.com” target=”_blank”>annualcreditreport.com</a>.

Many people take great pride in having a credit score in the upper 700s as if it reflects the type of person they are. Your credit score says a lot about what type of spender you are and most importantly, how well you pay your bills. Although it can’t claim to reflect if you are a good friend, neighbor, husband or son, you are judged by it nonetheless. With your integrity riding on these three little numbers, it makes sense to know a little bit about how to guard them.

If you have limited access to the world, live on a farm and eat your own produce you might not need to bother with this thing called a credit score. You may need to right your own article or book to help others reach this heighten awareness. However, if you are like the mass majority, having a good credit score makes life a little easier.

Putting it in Perspective

A great credit score won’t improve your marriage, mend a broken heart or replace a good friend. However, living in the credit based United States, having a good score will help you get a better interest rate on your car insurance, help you land a dream job that you ARE qualified for and allow you to be approved for that condo that you’ve always wanted. A good credit score will also give you financial backing if you should ever need it.

How to Improve Your Credit Score

It may be easier to ensure that your score don’t drop than it is to improve it. With that being said, the actions that you take for this point forward will determine if you will improve your credit score or not. Many of these actions are obvious to most but still bare reinforcing.

• First, know that the worse credit score can be improved. Don’t take a defeatist attitude because that won’t help you or your score.
• Secondly, request a duplicate of your credit report from the reporting agencies—Trans Union, Equifax, and Experian. You are entitled by law to a free report every year. If you were recently denied credit, you can also request a free credit report from the reporting agency.
• Check for any errors on your report and dispute them in writing. Send a copy of the credit report to the reporting agency with the error(s) highlighted. Check back with a phone call in about three weeks to check the status of your dispute and any actions taken.
• Make up with your creditors. Communication is critical because they can’t help if they don’t know what the problem is. Ask for a payment arrangement that you can stick to and keep it. This will stop them from reporting you as delinquent and brings your accounts current.
• Your payment history weighs heavily on your credit score (35%) so make it a priority to pay your bills on time every month.
• How much debt owed is 30% of your score. So, pay down those debts as soon as possible. You want to have less debt owed. Don’t be so quick to open up new accounts this works against your credit score.
• Work with the credit you already have. How long you’ve had your open accounts looks more favorable than paying them off and closing them. So pay off the oldest ones and keep them open.
• Know that even though you have paid off a bad debt it still stays on your credit report for seven years—however, it does show as paid.

Let’s face it, rejection of any kind hurts. Being turned down for employment stings even more. You can take the necessary steps to improve your score and your confidence. Don’t beat yourself up. Get back on that horse. Learn as much as you can. When it comes to your credit report and credit score, become an expert. It may take a little more effort in the beginning but it will get easier and it will be worth it.

Your credit report reflects your payment history. Any opened accounts that are current and delinquent for the past seven years will be on your report. Your credit report will also show any inquiries for potential lenders that have requested to view your credit history. Previous address and alias is also seen on your report.

Most lenders will never see your credit report because they go by your credit score. Nevertheless, since your credit score is based on what is in your credit report it is a good idea to know what is on yours. Potential lenders, insurance agencies and potential employer may pull your report or score to determine if you are credit worthy. For insurance carriers, a bad credit report can make the difference in your insurance rate. It is common practice for employers to pull your credit score if the job involves handling money or other credit information.

How to Get Your Credit Report

There are three options to receiving your credit report.

1. By phone: You can order your credit report by phone at 877 322-8228.
2. Online: At AnnualCreditReport.com, you can get a free report once a year.
3. By mail: On the same site, you can mail a request to the address provided.

Making heads or tails out of your Credit Report

Reading your credit report can be a bit confusing. There is a lot of information on there to digest. If you are having trouble understanding your report help is available. If you have an established relationship with your banker, you could ask for assistance with reading your report. Take a copy with you when you approach him or her because due to confidentiality issues, they may not be able to print one. Another solution is to contact a nonprofit credit-counseling agency near you. Often these organizations will help you free or for a small fee. To find an agency near you please visit http://www.aiccca.org/ or http://www.nfcc.org/. The library is another free source of information. There, you will find books to help you understand your credit report and to help you dispute any errors on your report that you may find.

About Your Credit Score

The credit score is a three-digit number that ranges from 350-850. It is also referred to as your FICO score because FICO came up with the score. This little score can determine your credit worthiness and depending on the credit agencies (Experian, Trans Union and Equifax) used, you can have three different credit scores.

If you have great credit and intend on getting credit for a large purchase, you should view your credit report for any errors at least three months prior (For bad credit, at least six months.) This will give you time to dispute and correct any errors and/or take steps to improving your credit.

Improving Your Credit Score

Most people have some idea what it takes to improve their credit score because it is straightforward. Pay your bills on time and don’t spend beyond your means.  However, it is also a good idea to check for errors on your credit report at least once a year. Errors can bring down your credit score. You credit report will also show identity theft. These are accounts that have been open in your name but not by you. This too can affect your credit score. If you find anything that looks suspect, contact each credit bureau in writing, immediately.

Take Pride in Your Credit Score

Most people take pride in their high credit scores, as they should. However, along with that pride should come protection. You should protect yourself because having a credit score also makes you a target for identity theft.  You can safeguard against this by reviewing your credit report at once a year. However, you can also request to be alerted via email or text if there is any significant changes made on your credit report.  Contact each credit bureau for more information on alert services.

Equifax.com or call 1-800-525-6285

TransUnion.com or call 1-800-680-7289

Experian.com or call 1-888-397-3742

Your credit score should be very important to you because those three numbers will dictate your car insurance rate, whether you will be approved for a mortgage, if you will be accepted without a down payment for an apartment and even if you will be hired on some jobs. Your credit score can be pulled for just about anything these days. That is why it should be extremely important to you. If you have bad credit than chances are you have experienced being denied credit and that’s doesn’t feel nice.

Your score is determined by a formula that weighs how you pay your bills, how many open accounts and delinquent accounts you may have, how old these accounts are and how many inquiries for new accounts you have on your credit report. Your creditors report to one or more credit agencies (Equifax, Experian or Trans Union) each month with this information. If you are late with making payments this is reported as well as if you haven’t made your payment. This formula, usually the FICO method, determines based on your pattern what you score will be. It will range from 350-850, with the higher number meaning you are a better risk to potential creditors. An average and good score is 750 or more.

Improving your Credit Score

It is never too late to want to improve your credit score. However, it will take time. It will not happen within a few weeks—several months is more realistic. The same way that it took time to damage your credit score, it will take time to improve it. So, beware of those companies that claim miracles. Although there are legitimate companies that can help you with improving your credit history, the majesty will need you to do it. With that said, you can do it yourself. Be prepared to change your spending habits and how you pay your bills and you will see a significant improvement in your credit score within 9-12 months.

• Request a copy of your credit report from Annualcreditreport.com. There, you can get a free copy from each credit agency. It is federal law that allows a free copy of your credit report each year. It is important to know what exactly is on your credit report before you can start to improve your credit score.
• Check for errors on all three reports. There is a good chance that you will find differences between each report. If you do find an error, circle it and send a copy with your letter of dispute to the respective credit agency (TransUnion, Equifax, and Experian). They have 30 days to investigate your dispute (at which time they contact the creditor with the disputed information) or it has to be removed. If however, the creditor responds with proof that the information if correct it remains on your report. However, you can also request that an explanation be placed on file too explaining why you feel it is an error. This is provided to potential lenders.
• After the errors are disputed and cleared up, it is time to work the delinquent accounts. Take a deep breath and dig in, all delinquent accounts need to be addressed—even if that means that you call and set up a payment arrangement that is agreeable to both parties. The most important thing is to make contact so that you can get these account satisfied and current as soon as possible. Don’t agree to something you know you cannot keep. Be honest and do what is in your financial power to do.
• Set a budget and still to it. This might be the most challenging step because there will be times (many times) that you will want to make a purchase that you can’t afford. Remind yourself of your goal. These impulse-shopping habits must be erased. You will feel much better after you rebuild your credit score.
• Pay your bills on time every month. This cannot be stressed enough. This counts as 35% of your credit score.

To help you on your quest to improve your credit score you might find “Building a Better Credit Report,” put out by the Federal Trade Commission, full of helpful information. This report outlines your rights as a consumer and the steps needed to take to get your score back on track. There, you will also find a sample of a dispute letter.

The First Step

The first step in repairing your credit it to know that what’s on your credit report is accurate. Each year you can request a free credit report from AnnualCreditReport.com. Beware of other companies pitching a free report because if you have to fork over your credit card number than it isn’t free. Take a good look at your credit report when it arrives to ensure that the information about you is true. Check for identity theft (accounts open in your name but not by you). Also check for late payment information reported, if you can prove that you paid on time you can have this information corrected. If you do find information that is incorrect, write to the reporting agency, Equifax, Trans Union, or Experian with a copy of proof. It is a good idea to send a copy of your report with the information highlighted in red or yellow. The credit-reporting agency has 30 days to investigate and you should hear back in a couple of weeks. However, be proactive. If you haven’t heard anything in about three weeks call them.

Learning New Habits

Now that your report is accurate, it is time to bring your accounts current. A good place to learn how to repair your credit and to increase your credit score is from the source itself—FICO. Lenders use some variation of the FICO model to determine your credit worthiness so it just makes sense to follow the advice from Myfico.com to get started on the right place to good credit. MyFico.com suggests the following steps to repair your credit:

• Pay your bills on time—this might seem obvious but there is a good reason you should do this besides it is just morally right. How you pay your bills weighs about 35% on your FICO score. That’s right, if you pay your bills on time, you have at least a third of the score beat.
• How much debt you owe is the next biggest chuck of your score and that is 30%. Even though you are paying your bills on time, if your credit cards are to their limit lenders may look at this as a potential hazard. Pay those cards down as soon as humanly possible. One trick that might make an impact on your credit score is to have lenders increase your credit limit. This is not so you can spend more, it looks better because you are not at the max of your credit limit.
• Don’t chase those lower credit cards. Opening new accounts and closing older ones can hurt your score even though you may be getting a better interest rate. A secured card is also a good idea when repairing credit or starting credit. Your credit limit is based on how much you have in a savings account with the lending bank or company. As you make your payments on time every month, it is reported to the credit bureaus, which helps to rebuild your credit score.

As you can see, it takes time and effort on your part to repair your credit. There is really no need to pay someone else to do what ultimately is up to you to do. The information is out there and it doesn’t always cost to get it. If you are purchasing a course or an eBook on how to repair credit, know that you are paying someone for taking the time to do the research that you can do yourself. However, there are those companies that will call your creditors on your behalf for a fee. You can do this too. Whichever paths you decide to take make sure to do your homework before issuing your credit card number. Check reviews of that course or eBook. Contact the BBB to see what complaints have been filed, if any. Then, take the steps to repair your credit and avoid those companies promising overnight success.

Credit makes the world go round, or at least it makes life a little easier. Although there exist those people who don’t like or use credit, most people live on some form of credit, whether it is a car loan or a mortgage. If you need credit, there are actions that you can take to be approved.

What is Credit?

Credit is really a loan. If you apply for a credit card, finance a car, or buy a home, you are asking for a loan. Your credit history follows you and it can haunt you for seven years (sometimes 10) if it is bad. There are companies that track your credit history—Equifax, Trans Union and Experian. There is no hiding from them. How well you pay your loans back will determine how good your credit history and score are. Your credit score is three little numbers that potential lenders look at to determine if they will grant you that loan or not. A good score will get you into many doors and a bad score will cause doors to slam in your face. You are probably getting a good idea that credit is important.

No Credit

If you are just starting out in life, meaning you are 18 and really just getting your feet wet with responsibilities you won’t have a credit history. This can be almost as frustrating as having bad credit because you will be denied credit just as often. The reason is lenders do not have anything to base your credit worthiness on. You must establish credit and there are a few ways that you can do that.

• Open a secured credit card. Secured cards as they are also called is a saving account. Your credit limit is based on the amount in your savings. Most banks offer this type of card and if you already have a bank account, it is easiest to open one there. The lending institution will report to the credit bureaus each month and this will help to build your credit history. You can start a secured account for as little as $250.
• Ask mom or dad to co-sign on an account. Their good credit history will get you the car loan and by co-signing, they are agreeing to pay back the loan if something should go wrong. In the mean time with every monthly payment, your credit history is building.  Your parents could also make you an authorized user on their credit card account. This is called “piggybacking” and if their credit is good, your credit will get a boost up too.
• Apply for a local department credit card. These stores are more lenient when it comes to issuing cards to a newbie. When you have shown that you can maintain the local department store credit card, you can apply for a major credit card.

Repair Bad Credit

Bad credit is more popular than you might think. Life has an interesting way of throwing a curve ball and someone with great credit can now be looking down the barrel of bankruptcy. Just yesterday, you were at the top of your hill, with a great job, nice home, fancy car and the ability to shop every now and again. Today, the hill looks like a mountain of debt because you lost your job. You try to keep up with the payments but soon you are faced with paying the priority bills first, mortgage, utilities, car note and then credit cards. It becomes a slippery slope. You begin to change your views about people with bad credit.

So what can you do? There is hope for people with bad credit but the flight will not be swift. It takes time to rebuild your credit worthiness but it is possible.

• Take a good hard look at what you can pay and what you can’t.
• Communicate with your lenders to see if they offer an affordable payment arrangement.
• Get a second job to help pay off debt sooner.
• Ask for increase in an existing credit limit if possible, if you need more credit. Only do this if you know you can make these payments on time every time.
• Avoid opening new credit accounts and focus on bringing current accounts current.

Be Responsible

Starting out with new shiny credit cards can be exciting. You feel all grown up and legally you are but that doesn’t mean you know how to control your spending. It is your responsibility to protect your credit history. That means only spend when you know you can make the payments, never lend your card(s) to a friend or family member and pay all other bills on time. Stick with one or two major credit cards rather than opening several credit card accounts.

Are you Credit Worthy?

Would you loan a friend money who you knew had a track record of not paying his debts? Maybe you would because you know he is a good person but banks and other companies that extend credit don’t care if you are a good person or not. They are concerned with one thing; are you good for it. Will you make your payments on time to ensure that the lending party will get their money back? When you think of it this way, it might soften the blow if you are denied credit. Being denied credit is not the end of the world. You do have options available to you.

When you apply for a car loan or a credit card, you are asking the issuer to loan you money, that you agree to pay back monthly at a certain interest rate. These lenders want to lend credit because they make money from the interest. The more credit extended the more money they make. How do these lenders determine who is worthy and who isn’t? They pull your credit report.

Your credit report includes your work history, previous addresses, other lines of credit and how you pay your bills. It also shows any bankruptcies, charged off accounts, monetary judgments and tax liens. This report paints a picture for potential lenders. He or she will determine based on your credit report if you would be a good risk. However, these days it is much easier for lenders to go by your credit score. Everyone has at least three credit scores because there are three major reporting credit agencies, Equifax, Trans Union and Experian. Your credit score can vary between each agency because they weigh differently the factors from your credit report when determining a score. However, these agencies all use a form of FICO to determine the score.

Being denied Credit Because of Bad Credit

The only real way to repair bad credit is to pay off your debt. There are credit-counseling companies out there that will assist if you need to set up payment arrangements with your creditors. American Consumer Credit Counseling is a legitimate company that can assist with repairing your credit. Beware of companies promoting credit repair because of the high rate of frauds out there. Contact the BBB if you have any doubt before going with a credit counseling company.

Being Denied Credit Because of No Credit

Being denied credit because of no credit can be almost as frustrating as having bad credit. However, the quickest way to gain a credit history is to open a secured credit card. Many banking institutions offer secured credit cards as well as credit card companies. If you already have a bank account, you could inquire with your bank about building your credit. Give them the opportunity to discuss the products that they offer to help build credit. Make sure that you pay your bills by the due date and this will also help to build a credit history for those companies who report good payment history to the credit agencies.

Being Denied Credit Because of an Error on Your Credit Report

It is possible to be denied credit due to an error on your report. If you feel you’ve been falsely denied credit you will want to pull a copy of your credit report to see want is on it. By law, you are entitled to a free copy of your credit report from the reporting agency that gave the information. You will write to the agency (Equifax, Trans Union or Experian) of the error and they have 30 days to investigate your dispute or they must remove it from your credit report. If they are not able to resolve the dispute to your satisfaction, they will add your note to your file so that potential lenders will see your argument of what happened.

It is a good Idea to keep an eye on your credit report to make sure that it is accurate. To receive a copy of your credit report you will need to contact each agency with a request, which should include proof of ID.

 How Does it Work?

If you’ve ever applied for a car loan or a credit card online and was approved or denied instantly, it is because of credit scoring. Based on your social security number a potential lender can find out your credit score and approve or deny you credit in less than 60 seconds.

Credit scoring is made possible because of a formula used to predict how you will pay your bills in comparison to over 10 thousand other people in your same life category. For instance, if you are young and have no established credit, you will be grouped and compared to the like. The same holds true, if you have established credit and have had some trouble paying your bills, a prediction would be made based on a similar group of your peers. There are several formulas in place to make this prediction and lenders can use whichever they choose. However, the most used is FICO. Until 2009, all three major credit agencies used a variation of the FICO method, but as of 2009, Experian no longer is under contract with FICO.

The FICO method gives the highest credit score as 850. The higher your score the better risk you are. An average score of 720 or above is considered a good score. Using these numbers, say for example you are applying for car insurance and you have a credit score of 600 versus someone in your same category with a score of 750, your rate may be higher. However, your same score of 600 with Equifax may be a different score with the other two credit reporting agencies, which could result in a different rate depending on which credit bureau the insurance company uses.

VantageScore

The variation in credit scoring may be solved with VantageScore. VantageScore is a new credit model put together with the help of the three major credit bureaus. Much like the grading system in school, each person will have a grade from A-F. The credit scoring system will range from 501 being an F and 900-990 being an A. Having the same score across the board is the main advantage of using VantageScore.

No matter which credit scoring method used, it is vital that you take your credit score seriously. Your credit score has a direct impact on your way of life. Although it is possible to function with a low credit score, life is much easier with a higher score. This can be seen with the previous examples but if you need more proof consider that you can be turned down for employment based on a low credit score. In addition, your score can influence where you live because when applying for an apartment they can turn you down for bad credit.

How to Improve your Credit Score

In order to improve your credit score you must first know your score and what’s on your credit report. Once you have your report in hand, the first thing is to make sure all information is correct. If you find any errors, write to the credit bureau with proof of the error. Next, make your payments on time. This is very important because payment history weighs the heaviest on both FICO and the VantageScore methods. Arrange with creditors a payment schedule to help pay past due/outstanding bills owed and get them current as soon as possible. Your credit score is forgiving over time. The more payments that you make on time–over time– the better your score will be.

How is Your Score Determined?

Your credit score is determined by a mathematical formula and although there are tons of these formula models around, most companies use the FICO scoring model, which gauge between 300-850. The higher your score is the better risk you are–likewise the lower the score the higher the risk. Until 2009, each person had three FICO scores because there were three major credit reporting agencies using the FICO model, EquiFax, Trans Union and Experian. Experian is no longer under agreement with FICO. Although there are five categories that make up a credit score, each person’s score is determined based on their circumstances individually. That means that a new person with no credit history is not weighed the same as someone with an established credit history. Instead, the newbie is grouped and weighed against those in the same circumstance—tens of millions to be exact.

Five Categories that Make up a Credit Score

There are five categories used to make up a credit score. Payment history and debt owed are two categories that weighed most heavily.

• How you make your payments and any delinquent accounts goes into the Payment history category and is 35% of the pie.
• Outstanding Balances (30%)—how much you owe is a factor that is considered. For instance, if you have several open accounts with a large outstanding balance spread between them this might be viewed as a higher risk.
• How long have you had credit (15%)—how long have you had your open lines of credit and their activity.
• Types of Accounts (10%)—revolving and installments
• New lines of Credit (10%)—how many new lines of credit and/or attempts to get new lines of credit is also weighed. This includes hits to your credit report from utility companies.

Note: Your age, marital status, address, employment or race does not influence your credit score.

Certain Behaviors will Influence your credit score negatively. Bankruptcy, foreclosures, late payments and maxed out credit cards will make the best scores take a nosedive.

What determines a Good Credit Score?

Unfortunately, one company’s view of a good score may not be the same for another company. It is safe to say that the higher the number the better but getting a line of credit still is determined by the criteria of the particular company issuing that line of credit. For example, a score of 750 is considered a good score by most standards, but you could still be denied credit if the criteria for a particular company is 800-850. Although TransUnion and EquiFax use the FICO method, they use different versions, which will result in two different scores for the same person. Because there are many factors that can make a score drop, it is a good idea to keep track of where your score is frequently. TransUnion and EquiFax will provide your actual score for a fee. There are also free score estimators online that will help you determine your FICO score.

How to Check Your Score

By law, each person is entitled to a free credit report once a year from each reporting agency. However, that does not mean that you have a right to the score for free. You have to pay a fee to get your actual score from myFico.com or you can use the free tools to get an estimate.

Is it Unfair or Just Reality?

It may seem unfair to many people that your credit score can determine how much you are charged for car insurance, your interest rate on a loan and if you are turned down on your next job application but it is a reality. Thankfully, credit scoring is forgiving, which means that you can take action to improve your score and to safeguard it.