Simple Techniques to Remove Derogatory Items From Your Credit Report

Your credit score reflects your credit worthiness in addition to your ability to service the loan. A low credit rating usually means there are some negative items you should get disputed and removed. One of the worst items that might be listed in your credit report is a derogatory comment. Lenders immediately check the derogatory comment section when evaluating an application for either secured or unsecured loans. Therefore you should know your rights in handling these negative comments.

Several types of derogatory comments and its effect on your credit report:

• Bankruptcies and foreclosures: they are the most damaging, especially since they can be listed for up to 10 years. It is also difficult and time consuming to remove.
• Collection accounts: they can exist on credit reports for around 7 years, but these can be removed.
• Past due entries: commonly happen when people miss deadlines on their car loans, credit cards, or medical bills. These comments can also be removed.

Simple techniques to remove a credit history’s “unfavorable” comments:

• Fix your bad habits. For example, make loan payments on time. Avoid paying later than 30 days.
• Consult professional credit repair agencies. They specialize in fixing people’s credit problems technically.
• If a written agreement was not signed between the lender (you) and the creditor, a dispute can be raised with the credit bureaus. The creditor must respond to your inquiry or show written proof within 30 days. Failing which, those negative comments will be removed by the credit bureaus.
• Credit repairs can also be done personally if you have enough knowledge in managing debt.

While very difficult t complete remove all derogatory terms and create a perfect credit report, there is still a very good chance to improve your credit rating by following the techniques mentioned above. It will be easier to obtain loans with favorable terms and conditions once the credit report is cleaned up.

Dangers Of Debt Settlement: California Consumers Risk Free Fallin' FICO Scores

When thinking about the potential benefits to be found within debt settlement California consumers should be aware that there are also several drawbacks also contained within the debt relief method, and some borrowers are inevitably going to find that the disadvantages rather significantly outweigh the hope of unsecured bill reductions. For one thing, the resultant negative marks on credit reports – an unhappily inevitable consequence of the process, especially during the initial stages – wouldn’t be suitable for many consumers in the position of trying to maintain a comfortable existence for their families while trying to eke out a living paycheck to paycheck. Are you planning to apply for home mortgages or student loans within the next two to three years? If so, you might well have to rethink about some of your presumptions about debt settlement negotiations, regardless of how seemingly perfect the approach may appear.

The deleterious credit report related repercussions of debt relief through debt settlement (California, more than most states, prizing credit reports) could even dissuade households worried about borrowing money in the immediate future for such relatively minimal expenses as water heaters or used automobiles that nevertheless remain outside of the domestic budget absent external assistance. By the culmination of proceedings – once you have fulfilled the remuneration of the negotiated down credit card debt accounts according to the carefully stipulated agreement with banking representatives – the credit agencies should change the designation of the unsecured loan balances formerly left to default as “settled”. However, that’s still somewhat less impressive than “paid in full”, and the scoring models assigned to every Golden State citizen’s credit report will indirectly reflect the partial level of compensation.

No matter that the debt management plan was mutually acknowledged by both the lenders and borrowers (or their proxies in debt settlement), California settlement clients must come to grips with the strong likelihood that their FICO points shall drop precipitously. To make matters some degree worse, consumers who have managed to maintain reasonably untarnished credit reports and resultant credit scores despite outstanding credit card debt totals well beyond their capacity for repayment in full would be judged poor candidates for the debt settlement companies worried about the success rates. That’s right, as tragically ironic as it may seem for those heads of household who’ve labored long and hard and against all odds to keep their FICO numbers artificially buoyed, the firms specializing in this approach toward debt relief would be wise to respectfully decline to work with borrowers madly juggling accounts to prop up their scores above seven hundred or even six hundred.

As a matter of fact, now that the newly proposed debt settlement California State legislative restrictions seem all but assured to pass into law by the start of 2012, even the firms that in the past would have perhaps taken a flier on the shakier settlement arrangements will be loathe to spend the time on negotiations for candidates trailing an excellent history of repayment given the proposed restrictions on fees assessed. For businesses defining their debt relief efforts as “debt settlement”, California law shall soon disallow any monetary charges levied on consumers prior to actual reduction of credit card debt totals, and the lenders are considerably more reticent about shaving even a cent from the balances owed unless they fear the borrowers are barely able to avoid bankruptcy following months without communication. Under certain scenarios, ignoring billing statements and letting credit scores flounder may be worth the risks, but we cannot pretend this would be an easy choice for any Californian consumer.

What is a Good Fico Score and What Does it Mean?

You might ask yourself these questions. The general rule is the higher the FICO score the better and if it is high you could wind up saving lots of money. When lenders decide to give you a loan, your FICO score is used as an indication of risk. The lesser risk you are, the lower the interest rate you will have to pay. The lower the interest rate, the more money you will save over the life of a loan.

The FICO Score range is 300 to 850 and it is broken down as:

300 – 499 bad credit,

500 – 619 low credit,

620 – 679 average credit,

680 – 699 good credit,

700 – 850 excellent credit.

An example of how this will save you money is to look at a 30 year mortgage. With Person A having an excellent FICO score and Person B having an average score. When Person A applies for a $200,000 30 year mortgage they get a very nice interest rate around 6 % and a monthly payment around $1200. When Person B applies for the same loan, they get an interest rate around 7.5% and a monthly payment of $1400. The difference is $200 per month. This does seem like much, but it really is. Over the life of the loan, 360 months at $200 per month, it equals $72,000. That is a huge savings by Person A.

Furthermore, if Person B had any lower of a FICO score, they more than likely would not even get a loan. 620 is often used as a cut off point by lenders. This means if you are below that most institutions won’t touch you and you will have to borrow from a sub prime lender. The interest rates provided by this group of lenders is often much higher than even the average FICO score rate. You could pay in the double digits for interest, making the consequences of having a bad FICO score really costly.

You should always be looking to protect and increase your FICO score. From the example above, the $200 a month could really make a difference in a person’s life. This is especially true if the money is invested. The person saving that $200 a month also has fewer worries. They have the flexibility to deal with changes in the economy and inflation.

Identity Theft: They Caught Him

His hard earned money? Gone. Creditors on his back everyday. The cops knocking on his door. His family strained to the breaking point. He didn’t do anything wrong but my business partner’s life got turned upside down afew years back. He became a victim of what is now the fastest growing crime in the world. Identity theft.

According to the Federal Trade Commission, since 1999 over 27 million people in the US alone became victims of this epidemic 10 million more last year. Harris InterActive,a marketing research company, reports that between 2002 and 2003 more roughly 19,178 people per day fell victim.

Your identity can be stolen in many ways. For my partner, the thief gained access to his social security number and address then applied for a series of loans in his name. When the bills came due, guess who the creditors and law enforcement held accountable?

He and his family felt the full impact. Identity theft can cripple and even destroy a person’s life. The time loss trying to recover your identity as well as the out of pocket expense U.S.Treasury Secretary John Snow calls identity theft “the greatest threat to consumers and far more insidious and harmful to our national welfare than many people realize.”
The internet doesn’t make it any better with its almost limitless access to information but a great deal of identity theft still comes from the offline world. Wherever it comes from the goal stays the same. To get your personnal information and steal what belongs to you for as long as possible.

In many cases, this can lead to the victim filing for bankruptcy or worse. As reported by the Orlando Sentinel, one man whose identity got stolen recently spent 54 days in jail before authorities realized their mistake.

Yet even when the thief finally gets caught, victims find out all too often the worse part still lies ahead. The recovery of their identity. For my partner, that meant never ending battles with the same credit bureaus that previously gave him good ratings.

They destroyed his credit almost overnight eventhough he did everything they told him to get it restored. The agencies refused to clear his record and instead, started sharing his information with each other. His mortgage rates went thru the roof. He paid more for everything but still got declined. With all of this came the burden and fear of him not knowing if he would ever recover his identity.

Six years later he finally did. He started working with a company that within 90 days restored his credit. His mortgage rate dropped and he went back to paying full price for everything like the rest of us.

And like my partner, all of us risk becoming victims. In San Antonio Texas, television station KENS 5 spoke with a man convicted of identity theft who warned “Don’t take for granted what you have because anybody could take it away – I mean at the snap of a finger.”

He would know. The ways of stealing an identity have turned this crime from nuisance to worldwide crisis.

Free Credit Report – What Is An Employer Looking For In A Credit Report?

If you’ve ever applied for a job or are in the process of looking for a job now you may be wondering why your future potential employer wants a copy of your credit report. Of course you always want to maintain a good credit report and FICO or credit score because there are many ways it can be used for or against you including with potential employers.

A credit report to an employer is just another means of gathering more information about you and gives them background information. They can find various ways on your credit report to verify what you’re reporting on your resume. For example, you may have included past employment information on a credit card or loan application and they want to see if it matches, if you have left something out or have used different dates.

If you’re applying for a job that involves handling money such as bank tellers, financial loan officers or any finance-related business or cash handling businesses such as restaurants or retail operations they’ll want to check you out thoroughly.

Also if you’re thinking about working in any kind of business where you would be handling valuables such as jewelry that could easily be hidden you may go through a more thorough background check including your credit report and credit score.

A prospective employer will look for bankruptcies, although they cannot reject you for this, to see how you’ve handled your money and finances in the past.

They’ll always certainly try to match your past employment history with what you’re reporting on your resume so make sure you get your dates right. You don’t want to be rejected because you forgot what dates you worked for a particular business or company.

Employers will check your credit report for any evictions from past housing. Of course some landlords and property management companies don’t report evictions but a good reason to see what’s on your current credit report for yourself so you know just where you stand.

They’ll also look for any repossessions, foreclosures or reports from collection agencies and verify your social security number.

A big concern they have is theft by employees. To cut down on this they look for bounced checks on your credit report or any other indications you’re not honest.

Your employer does have to get your written permission to take a look at your credit report. So make sure you get a copy of your current report and look it over so you know what’s in it. You can get a free personal, online annual credit report in an instant. Even if you had one a year ago you want to get a free report now. You want to look over your credit history to know where you stand.

To answer the question what is an employer looking for in a credit report this is basically it although there are a few other things. Get you credit report as soon as possible so you’ll be fully informed when you apply for a job and it’ll pay off for you. You don’t want to be turned down on the basis of something in the report that you aren’t aware of or just overlooked.

Finding Catalogues with No Credit Check

It’s hard to shop if you ha ve your hands tied at home or if you don’t have a car to take you where you want to go -especially if the new furniture you have been waiting for or that new piece of technological hardware just came out. In this situation, people choose to shop through catalogues and sometimes opt to pay weekly instead. It looks easy, but let’s say that your credit score is far from stellar and you want to apply for their catalogue credit cards. Would you still want to buy the things that you want? If so, what would you do then?

In this case, those with a bad credit history would find applying for this kind of loan difficult. Luckily, there are loans that skip credit checks altogether, but these have higher interest rates than most. Additionally, those that go for catalogue credit cards would find their purchases limited to that vendor only. However, the process is easy this way, not to mention quicker. Mostly, companies would only ask for identification and an address, and correspondence usually takes less than 24 hours.

Short-term loans like these, as mentioned previously, high interest rates, and a missed payment can definitely mess up your credit score. It’s not surprising to see an interest rate of over 20 per cent in your loan, but long-time catalogue shoppers don’t mind much. Think of it as the price paid for both convenience and delivery. Thus the phenomenon that is online shopping starts to make sense -those two factors are the main characteristics that draw customers in, and it’s hard to break this cycle despite the awareness of the high interest rates.

Will catalogue shopping drive you deeper into debt and ruin your financial status altogether? Not necessarily. It is useful and convenient, but you have to be responsible over the things you want to spend your money on. Do you really want to buy a vase online when you can find the exact same design on a vase displayed at a garage sale next door? Probably not, so smart shopping is a must here. But if you are in a substantial amount of debt and really need to buy that brand new couch for your living room, it’s pretty easy to find catalogues with no credit checks online. No employment verification is needed, and it’s not all that hard to garner approval from these sites.

So if you’re quite the home buddy or if you’re a full-time mother babysitting three children, it would not hurt to try catalogue shopping, and this is possible even with a bad credit score. It saves a lot of time, and it is very convenient for those who want their stuff delivered right to their doorstep. The only feasible disadvantages of catalogue shopping is that they can have sky-high interest rates, and some of the catalogue credit cards are only usable with one company. Still, if it appeals to you, it provides you with an interesting and an overall time-saving and hassle-free way to shop.

Mortgage Loans After Bankruptcy – Ways To Boost Your Fico Score

After a bankruptcy is discharged, many lenders will offer you a home loan. In most cases, these lenders do not require new lines of credit or a high credit rating. Buying a home with good or fair credit has its advantages. These individuals likely obtain better mortgage rates and qualify for a range of home loans. Here are a few tips on ways to raise your credit score before applying for a mortgage.

Pay Creditors on Time

The habit you adopt for paying creditors can have a negative or positive effect on your credit report. If bills are regularly paid on time, your score will soar. Yet, paying a bill one day late may decrease your credit score by as much as 10 points.

If possible, pay bills a couple of days before the due date. Waiting until the due date to pay credit card bills will not have a negative effect on your score however, you may gain a few extra points with early payments.

Maintain Low Credit Card Balances

Following a bankruptcy, it is essential to open a new line of credit. This can be in the form of a credit card, gas card, retail store card, etc. If applying for a new credit card, avoid high balances. Ideally, consumers should keep credit cards at approximately 25% of the limit. Keeping a large balance will lower your credit score.

Stay Away from Credit Inquiries

Although credit inquiries are inevitable, especially when trying to re-establish credit, avoid applying for too many credit accounts. Many consumers are unaware of the damaging effects of inquiries. However, one inquiry can lower your credit score by 10 to 12 points. Because credit scores are already low following a bankruptcy, it is very important to keep inquiries to a minimum.

Carefully Monitor Credit Report

When attempting to boost your credit score, regular credit report monitoring is important. Homebuyers hoping to get approved for a prime rate mortgage will need a credit score of at least 680. After a bankruptcy, it will take time to achieve a high credit rating. However, if you take immediate steps to boost your score, it may be possible to get approved for a low rate mortgage within 24 months.

Check FICO Credit Score Free and With No Hassles

Knowledge is a very powerful instrument. Being aware of something can help anyone stay on top of the game and have a clear plan of what to do in the future. This holds true even when dealing with finances. It is not enough to be able to maintain a decent pay and to allocate resources accordingly. Credit is an important part of one’s financial status; thus, it is essential to know once credit score. What keeps others from doing this is fear of shelling out funds for obtaining their credit report. Luckily, there are ways to check FICO credit score free. Here’s how.

There are several options as to how one can check FICO credit score free. The first is to obtain it directly from the three credit bureaus. However, this may take time and there is a short window for the free trial offer. Thus, with this option, one might not be able to obtain a credit report without exceeding the free trial period. In addition, it would take more time signing up for each of the three credit bureaus just to obtain all three reports. The only advantage is that one can obtain his credit score directly from the three bureaus, nothing else.

Another alternative in order to check FICO credit score free is by signing up for such online services. Nowadays, one can easily find a website that offers to provide free credit report from all three credit bureaus with just one sign up. Since there are a lot of sites offering these services, one should be able to choose using the following considerations: safety, quality of service, credit repair services. If one is serious in getting a good credit score, obtaining one’s current credit report is only the first step. Once it is obtained, one should be ready to take action in terms of correcting or disputing incorrect items in order to get a better credit rating in the future.

Once one is able to check FICO credit score free, he will be able to know where he currently stands. Banks and creditors check one’s credit score in order to determine whether a person is qualified for a loan and mortgage. In addition, one’s credit score will determine the applicable interest rates for a particular loan or mortgage. This is why one should first obtain a copy of his credit report before applying for any loan. Once the credit report has been sent to a bank and is used to evaluate a loan, it will take a long time to dispute an incorrect item.

There are a lot of advantages when one has the initiative to check FICO credit score free. The most important aspect is that one will be able to fully control his finances and will be able to get the best rates for a loan or mortgage. In these trying times, lower interest rates really mean a lot and it can help someone take control of his finances better. In addition, it would be frustrating to know that one is paying a higher interest rate just because he failed to check or get a copy of his credit report prior to applying for a loan.