Posts Tagged Credit Reporting Act
How to Report an Error on Your Credit Report
justin narin asked:
Have you been turned down for a loan recently? Have you applied for store credit and been refused? Did you really want that car and find out that because of your ‘credit score’ that they would have to require an unreasonable down payment?
Credit reports are designed to help businesses evaluate the risk factor in giving you money or valuable products on a line of credit.
The Fair Credit Reporting Act promotes the accuracy, fairness and privacy of information in the files of the nation’s credit reporting agencies. The act is enforced with regard to the consumer’s rights and requiring new responsibilities for the credit reporting agencies.
For example, a reporting agency must give you a copy of your report and they must provide a list of every inquiry about your credit report within the last year.
The agencies collect data on personal identification (name, address, social security number, current employer, etc), payment histories with all current and closed lines of credit that details how much you owe, when you’ve paid on time and what, if any have been reported to a collection agency.
The final two items are all inquiries that have been made on your credit report as well as anything that is considered a matter of public record such as bankruptcies, foreclosures and tax liens.
To repair or report errors on your credit report, you must obtain a copy of your personal report and score. The reports themselves are not uniform from company to company.
Experian may not list all the data of Equifax and vice versa. So, be sure to obtain credit history reports from the same company as the creditor who turned down your application. In some states, that may require a small fee, but after September 1, 2005 all states will have to be in compliance with providing a free credit report.
Once you have the report, verify the information. Every report is also scored. Scoring is the system that creditors use to determine your credit experience. These scores are valid for all three companies and are uniform in value.
Credit scores range from 375 to 900 points, but those numbers mean little on their own. A score of 650 or better usually indicates a very good credit history. Scores between 620 and 650 are considered average, while scores below 620 may prevent a person from getting a loan. If they do receive one, it is likely one with prohibitive interest attached.
If you look at all the information on your credit report and it’s correct, then you are faced with having to improve either your payment history, lower the number of debts.
If the score is low because you possess very little credit history, investing in a secured credit card can help generate good feedback to your credit report or a co-signer who can provide the creditor with a good credit history as security for your lack of one.
Inaccurate information, however, such as reported late payments that you disagree with or a listing for a debt that is not yours is repairable. Some companies offer debt consolidation or credit repair. Before getting involved with either type, be sure you thoroughly check out the company to avoid scams.
Doing the credit repair on your own is simple enough. Write a letter, detailing the inaccuracy to the reporting company. Send the letter and copies (copies only) of any documents supporting your claim to the credit-reporting agency. Some agencies allow you to do this online through their websites; however, if you need to send them hard data it’s better to use regular postal mail.
The credit agencies are then required by law to investigate the item in question, usually within 30 days. They must forward all information to the reporting creditor and if they cannot verify the veracity of their report or the creditor does not respond, the report will then be changed and updated to reflect the data provided.
The company must then notify you in writing of the change as well as provide you with an updated credit report.
It’s important to note, that if there is an inaccuracy on Experian that there is likely a similar one on Trans Union and Equifax. Each company must be notified, separately for each item.
Also, if you have more than one item you are disputing on your credit report, then you may have to send a separate letter for each instance, to be certain that each item is addressed.
While this can be a time-consuming task at first glance, it is the best way to remove inaccuracies from your credit history and repair misinformation damage to your credit report. If you request it, the reporting agency must also send notices of any corrections to anyone who received your report in the previous six months.
If the negative information reported to your credit history is accurate, then only time can repair the damage of the negative score. Most information rolls off after 7 to 10 years, but felony convictions, information on jobs paying you over $75,000 a year or credit of more than $150,000 has no time limit.
If you had a car repossessed, you’ll have to wait about 8 years to see the repossession removed from your credit history. Open credit lines, whether the information is negative or positive, will remain active on your credit history whether you actively use the credit or not.
Applying for credit is never a fun, even for people who are considered to have good credit. There is always an inherent fear of rejection by the creditor you are applying for. If you are concerned about your credit history, keep an eye on it.
It’s recommended that you check your credit history once a year at least, because in an age of identity theft, negative credit history can be part of the collateral damage.
For more articles and suggestions, visit http://www.bills.com/credit-report-errors-articlebills/
VICTOR
Have you been turned down for a loan recently? Have you applied for store credit and been refused? Did you really want that car and find out that because of your ‘credit score’ that they would have to require an unreasonable down payment?
Credit reports are designed to help businesses evaluate the risk factor in giving you money or valuable products on a line of credit.
The Fair Credit Reporting Act promotes the accuracy, fairness and privacy of information in the files of the nation’s credit reporting agencies. The act is enforced with regard to the consumer’s rights and requiring new responsibilities for the credit reporting agencies.
For example, a reporting agency must give you a copy of your report and they must provide a list of every inquiry about your credit report within the last year.
The agencies collect data on personal identification (name, address, social security number, current employer, etc), payment histories with all current and closed lines of credit that details how much you owe, when you’ve paid on time and what, if any have been reported to a collection agency.
The final two items are all inquiries that have been made on your credit report as well as anything that is considered a matter of public record such as bankruptcies, foreclosures and tax liens.
To repair or report errors on your credit report, you must obtain a copy of your personal report and score. The reports themselves are not uniform from company to company.
Experian may not list all the data of Equifax and vice versa. So, be sure to obtain credit history reports from the same company as the creditor who turned down your application. In some states, that may require a small fee, but after September 1, 2005 all states will have to be in compliance with providing a free credit report.
Once you have the report, verify the information. Every report is also scored. Scoring is the system that creditors use to determine your credit experience. These scores are valid for all three companies and are uniform in value.
Credit scores range from 375 to 900 points, but those numbers mean little on their own. A score of 650 or better usually indicates a very good credit history. Scores between 620 and 650 are considered average, while scores below 620 may prevent a person from getting a loan. If they do receive one, it is likely one with prohibitive interest attached.
If you look at all the information on your credit report and it’s correct, then you are faced with having to improve either your payment history, lower the number of debts.
If the score is low because you possess very little credit history, investing in a secured credit card can help generate good feedback to your credit report or a co-signer who can provide the creditor with a good credit history as security for your lack of one.
Inaccurate information, however, such as reported late payments that you disagree with or a listing for a debt that is not yours is repairable. Some companies offer debt consolidation or credit repair. Before getting involved with either type, be sure you thoroughly check out the company to avoid scams.
Doing the credit repair on your own is simple enough. Write a letter, detailing the inaccuracy to the reporting company. Send the letter and copies (copies only) of any documents supporting your claim to the credit-reporting agency. Some agencies allow you to do this online through their websites; however, if you need to send them hard data it’s better to use regular postal mail.
The credit agencies are then required by law to investigate the item in question, usually within 30 days. They must forward all information to the reporting creditor and if they cannot verify the veracity of their report or the creditor does not respond, the report will then be changed and updated to reflect the data provided.
The company must then notify you in writing of the change as well as provide you with an updated credit report.
It’s important to note, that if there is an inaccuracy on Experian that there is likely a similar one on Trans Union and Equifax. Each company must be notified, separately for each item.
Also, if you have more than one item you are disputing on your credit report, then you may have to send a separate letter for each instance, to be certain that each item is addressed.
While this can be a time-consuming task at first glance, it is the best way to remove inaccuracies from your credit history and repair misinformation damage to your credit report. If you request it, the reporting agency must also send notices of any corrections to anyone who received your report in the previous six months.
If the negative information reported to your credit history is accurate, then only time can repair the damage of the negative score. Most information rolls off after 7 to 10 years, but felony convictions, information on jobs paying you over $75,000 a year or credit of more than $150,000 has no time limit.
If you had a car repossessed, you’ll have to wait about 8 years to see the repossession removed from your credit history. Open credit lines, whether the information is negative or positive, will remain active on your credit history whether you actively use the credit or not.
Applying for credit is never a fun, even for people who are considered to have good credit. There is always an inherent fear of rejection by the creditor you are applying for. If you are concerned about your credit history, keep an eye on it.
It’s recommended that you check your credit history once a year at least, because in an age of identity theft, negative credit history can be part of the collateral damage.
For more articles and suggestions, visit http://www.bills.com/credit-report-errors-articlebills/
VICTOR
Report Card for the Fair Credit Reporting Act
Stuart Hunter asked:
“It is the purpose of this title to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title.”
In the words of the U.S. Congress, the previous paragraph is the purpose of the Fair Credit Reporting Act (FCRA). In short, the Fair Credit Reporting Act is designed to help protect consumers against unfair practices within the credit reporting system.
While the mission of the FCRA was a noble one, a quick look around today’s credit society shows the results have fallen well short of expectations. What follows is how the FCRA has failed to produce a fair credit system for today’s consumers.
Detailing the Failures of the Credit Reporting System
1) Accuracy – It is well documented that credit reports contain errors but it bears repeating. Recent studies show that almost 80% of all credit reports contain factual errors such as duplicate listings, incorrect dates, tradelines placed on the wrong person’s credit reports, and omitted positive credit accounts.
These studies also indicate that 25% of credit reports containing errors significant enough to result in a credit denial.
How fair is a credit system that can cause a person to get declined for a loan or force them to pay higher interest rates than are necessary based on their actual credit risk? True, you have the right to dispute these inaccurate items with the credit bureaus, but this chore is not necessarily easy or foolproof. Depending on the nature of the erroneous items on your credit reports, credit repair can be a frustrating and time consuming ordeal that you are forced into because of no fault of your own.
2) Relevancy – While they do not say it directly, the credit bureaus’ creation of the VantageScore is evidence enough that the current FICO based credit scoring models are not as relevant as they could be. According to Experian spokesman Donald Girard, the VantageScore is “the most sophisticated, highly predictive scoring model that’s available in the marketplace” and as a consequence the much more popular FICO score is less predictive.
One of the flaws in the FICO score that the VantageScore tried to fix is the impact that very old credit accounts have on the credit score. According to Dr. Bonnie Guiton Hill, advisor to President Bush on consumer affairs, “it is our understanding that computer models that predict credit worthiness find most information that is more than two years old nonessential.” This is why newly created scoring models like the VantageScore are beginning to ignore credit information that is over three years old. It does not serve to accurately determine your credit risk.
So why have lenders been so slow to adopt scoring models such as the VantageScore? They claim it is because FICO is ingrained in the current credit system and has stood the test of time. A more cynical answer is that these lenders are not willing to sacrifice the huge profits they make from charging higher interest rates on loans granted to people who are a relatively low credit risk.
Of course, this cynicism is not simply the result of a general and unfounded grudge. It is born from the observation that seemingly every quirk and inconsistency in the credit reporting system falls in favor of the lenders. For example, when looked at logically, it makes sense to close unused credit cards. Not too long ago, financial experts suggested people do exactly this to make your credit score look better by showing your lack of need for unsecured credit.
But now we know that closing those accounts can actually lower your credit score because FICO rewards you for having multiple accounts and a large amount of credit at your disposal. So while closing accounts seems to be the financially responsible thing to so, it is probably more than an odd coincidence that this behavior which makes you a less profitable consumer for banks and credit card companies it punished by FICO.
The same goes for paying off installment loans early and voluntarily lowering credit limits. Both of these actions seem inline with what we would expect from the ideal consumer, but neither will have a positive impact on your credit score. Early payment of installment loans, another common goal of a financially responsible consumer that diminishes the profits of lenders, is not noted on your credit reports. And contrary to what you would think, lowering credit limits would lower your credit score because as alluded to above, you are rewarded for having multiple credit accounts and lots of credit at your disposal.
But by another quirk of the FICO credit scoring model, you are rewarded for having multiple credit accounts, but you are punished for seeking new credit. Consumers are told that inquiries are added to your credit reports each time you apply for credit so other lenders can see that you may be overextending yourself or crashing. But isn’t it convenient that inquiries will lower your credit score at the exact time when you are looking to qualify for new lines of credit? FICO wants you to have multiple lines of credit, but in trying to appease the scoring model, you will temporarily lower your credit score allowing lenders to charge you higher interest rates.
It seems no matter what you do, the deck is stacked against the consumer.
So while the VantageScore is a step in the right direction, it is still a long way from producing truly relevant results. This is because the VantageScore maintains many of the same scoring quirks exhibited by FICO and still uses the same basic, and very limited, variables for determining your credit score such as payment history, amounts owed, and length of credit history.
Your credit score is found by taking these variables as recorded in your credit reports, plugging them into a predictive model, and calculating a single three digit number. A late payment for example will be entered into the formula and will lower your credit score a set amount based on the amount of time it was late and how long ago the late payment was reported.
The fundamental flaw in this model, however, is that there is no accounting for why the payment was late. Whether you were late in making a payments because the lender did not send you a bill, because the bills were sent to the wrong address, because you wrote the wrong amount on the check, because your checks bounced, or because you blew all your money on illegal drugs; it is all the same in the eyes of the credit scoring model. Even if you have a sloppy lender to blame for your late payments, your credit worthiness in the eyes of lenders will be the same as a person saddled with a serious drug addiction.
3) Proper Utilization – Given how common it is for a credit score to be a gross misrepresentation of a person’s credit worthiness, it could be argued that the pervasiveness of credit scores in the financial market is improper. But in today’s society, the use of credit scores goes well beyond determining loan amounts and interest rates.
Employers, landlords, insurance companies and others may request to see your credit score. In today’s society your ability to get a certain job, rent an apartment, or qualify for reasonable insurance premium can all be dependent on your credit score.
Improper is a subjective term, but being passed over for a job because of completely irrelevant and possibly inaccurate negative credit items in your credit reports that are plugged into a flawed credit scoring model to produce a credit score that is not indicative of your actual credit worthiness fits the bill.
The FCRA Made Improvements, but there is Still a Long Way to Go
The FCRA’s failure to produce a system where the “accuracy, relevancy, and proper utilization” of your information is protected has resulted in a credit reporting system that is hardly “fair and equitable” to you as a consumer. But in defense of Congress, the FCRA has been heavily influenced by deep-pocketed industry lobbyists. In fact, when the FCRA was originally passed in 1971, Senator William Proxmire, one of the bills primary sponsors, felt defeated at what had become of his original intentions for the bill.
Since that time, the FCRA has been amended to become more and more consumer friendly, but there is still a ways to go and as was the case in 1971, those in the credit industry are still keenly interested in maintaining the status quo.
While the credit bureaus are no longer able to record information about you such as your ethnicity and religion, they also are not required to collect other personal information that is relevant to your credit worthiness. If you are a model citizen who has worked with the same company for 10 years, has a perfect criminal record and makes more than enough money to cover your expenses, it is fairly obvious that you are more worthy of credit than a career criminal who is a continual burden on the system. But none of this information is recorded by the credit bureaus or used when calculating your credit score. If you and the career criminal have the same types of accounts on your credit reports, your credit scores will be the same.
Also, while you now have the ability to see what information is contained within your credit reports, you do not have the ability to learn any more than the very basics of how this information is used to formulate your credit score. What impact will paying off a past due debt have on your credit? Which credit cards should be paid down first? What effect will shopping for a new loan have on your credit score? We have vague, observation based answers for these questions, but the exact formula is unknown and is subject to change at any time.
Finally, you have the right to dispute the questionable items in your credit reports, but you don’t have the right for this process to be easy or necessarily effective. Depending on your unique situation, credit repair can be as easy as submitting an online form or as difficult as tracking down creditors, fighting with collections agencies, and possibly involving legal intervention. The very entities who profit most from inaccurate credit reporting are the ones who played such a big role in watering down the FCRA and continue to resist consumer attempts to add equity to the credit system. It is these entities you are forced to contend with when working to enforce your right to a fair and accurate credit report.
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“It is the purpose of this title to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title.”
In the words of the U.S. Congress, the previous paragraph is the purpose of the Fair Credit Reporting Act (FCRA). In short, the Fair Credit Reporting Act is designed to help protect consumers against unfair practices within the credit reporting system.
While the mission of the FCRA was a noble one, a quick look around today’s credit society shows the results have fallen well short of expectations. What follows is how the FCRA has failed to produce a fair credit system for today’s consumers.
Detailing the Failures of the Credit Reporting System
1) Accuracy – It is well documented that credit reports contain errors but it bears repeating. Recent studies show that almost 80% of all credit reports contain factual errors such as duplicate listings, incorrect dates, tradelines placed on the wrong person’s credit reports, and omitted positive credit accounts.
These studies also indicate that 25% of credit reports containing errors significant enough to result in a credit denial.
How fair is a credit system that can cause a person to get declined for a loan or force them to pay higher interest rates than are necessary based on their actual credit risk? True, you have the right to dispute these inaccurate items with the credit bureaus, but this chore is not necessarily easy or foolproof. Depending on the nature of the erroneous items on your credit reports, credit repair can be a frustrating and time consuming ordeal that you are forced into because of no fault of your own.
2) Relevancy – While they do not say it directly, the credit bureaus’ creation of the VantageScore is evidence enough that the current FICO based credit scoring models are not as relevant as they could be. According to Experian spokesman Donald Girard, the VantageScore is “the most sophisticated, highly predictive scoring model that’s available in the marketplace” and as a consequence the much more popular FICO score is less predictive.
One of the flaws in the FICO score that the VantageScore tried to fix is the impact that very old credit accounts have on the credit score. According to Dr. Bonnie Guiton Hill, advisor to President Bush on consumer affairs, “it is our understanding that computer models that predict credit worthiness find most information that is more than two years old nonessential.” This is why newly created scoring models like the VantageScore are beginning to ignore credit information that is over three years old. It does not serve to accurately determine your credit risk.
So why have lenders been so slow to adopt scoring models such as the VantageScore? They claim it is because FICO is ingrained in the current credit system and has stood the test of time. A more cynical answer is that these lenders are not willing to sacrifice the huge profits they make from charging higher interest rates on loans granted to people who are a relatively low credit risk.
Of course, this cynicism is not simply the result of a general and unfounded grudge. It is born from the observation that seemingly every quirk and inconsistency in the credit reporting system falls in favor of the lenders. For example, when looked at logically, it makes sense to close unused credit cards. Not too long ago, financial experts suggested people do exactly this to make your credit score look better by showing your lack of need for unsecured credit.
But now we know that closing those accounts can actually lower your credit score because FICO rewards you for having multiple accounts and a large amount of credit at your disposal. So while closing accounts seems to be the financially responsible thing to so, it is probably more than an odd coincidence that this behavior which makes you a less profitable consumer for banks and credit card companies it punished by FICO.
The same goes for paying off installment loans early and voluntarily lowering credit limits. Both of these actions seem inline with what we would expect from the ideal consumer, but neither will have a positive impact on your credit score. Early payment of installment loans, another common goal of a financially responsible consumer that diminishes the profits of lenders, is not noted on your credit reports. And contrary to what you would think, lowering credit limits would lower your credit score because as alluded to above, you are rewarded for having multiple credit accounts and lots of credit at your disposal.
But by another quirk of the FICO credit scoring model, you are rewarded for having multiple credit accounts, but you are punished for seeking new credit. Consumers are told that inquiries are added to your credit reports each time you apply for credit so other lenders can see that you may be overextending yourself or crashing. But isn’t it convenient that inquiries will lower your credit score at the exact time when you are looking to qualify for new lines of credit? FICO wants you to have multiple lines of credit, but in trying to appease the scoring model, you will temporarily lower your credit score allowing lenders to charge you higher interest rates.
It seems no matter what you do, the deck is stacked against the consumer.
So while the VantageScore is a step in the right direction, it is still a long way from producing truly relevant results. This is because the VantageScore maintains many of the same scoring quirks exhibited by FICO and still uses the same basic, and very limited, variables for determining your credit score such as payment history, amounts owed, and length of credit history.
Your credit score is found by taking these variables as recorded in your credit reports, plugging them into a predictive model, and calculating a single three digit number. A late payment for example will be entered into the formula and will lower your credit score a set amount based on the amount of time it was late and how long ago the late payment was reported.
The fundamental flaw in this model, however, is that there is no accounting for why the payment was late. Whether you were late in making a payments because the lender did not send you a bill, because the bills were sent to the wrong address, because you wrote the wrong amount on the check, because your checks bounced, or because you blew all your money on illegal drugs; it is all the same in the eyes of the credit scoring model. Even if you have a sloppy lender to blame for your late payments, your credit worthiness in the eyes of lenders will be the same as a person saddled with a serious drug addiction.
3) Proper Utilization – Given how common it is for a credit score to be a gross misrepresentation of a person’s credit worthiness, it could be argued that the pervasiveness of credit scores in the financial market is improper. But in today’s society, the use of credit scores goes well beyond determining loan amounts and interest rates.
Employers, landlords, insurance companies and others may request to see your credit score. In today’s society your ability to get a certain job, rent an apartment, or qualify for reasonable insurance premium can all be dependent on your credit score.
Improper is a subjective term, but being passed over for a job because of completely irrelevant and possibly inaccurate negative credit items in your credit reports that are plugged into a flawed credit scoring model to produce a credit score that is not indicative of your actual credit worthiness fits the bill.
The FCRA Made Improvements, but there is Still a Long Way to Go
The FCRA’s failure to produce a system where the “accuracy, relevancy, and proper utilization” of your information is protected has resulted in a credit reporting system that is hardly “fair and equitable” to you as a consumer. But in defense of Congress, the FCRA has been heavily influenced by deep-pocketed industry lobbyists. In fact, when the FCRA was originally passed in 1971, Senator William Proxmire, one of the bills primary sponsors, felt defeated at what had become of his original intentions for the bill.
Since that time, the FCRA has been amended to become more and more consumer friendly, but there is still a ways to go and as was the case in 1971, those in the credit industry are still keenly interested in maintaining the status quo.
While the credit bureaus are no longer able to record information about you such as your ethnicity and religion, they also are not required to collect other personal information that is relevant to your credit worthiness. If you are a model citizen who has worked with the same company for 10 years, has a perfect criminal record and makes more than enough money to cover your expenses, it is fairly obvious that you are more worthy of credit than a career criminal who is a continual burden on the system. But none of this information is recorded by the credit bureaus or used when calculating your credit score. If you and the career criminal have the same types of accounts on your credit reports, your credit scores will be the same.
Also, while you now have the ability to see what information is contained within your credit reports, you do not have the ability to learn any more than the very basics of how this information is used to formulate your credit score. What impact will paying off a past due debt have on your credit? Which credit cards should be paid down first? What effect will shopping for a new loan have on your credit score? We have vague, observation based answers for these questions, but the exact formula is unknown and is subject to change at any time.
Finally, you have the right to dispute the questionable items in your credit reports, but you don’t have the right for this process to be easy or necessarily effective. Depending on your unique situation, credit repair can be as easy as submitting an online form or as difficult as tracking down creditors, fighting with collections agencies, and possibly involving legal intervention. The very entities who profit most from inaccurate credit reporting are the ones who played such a big role in watering down the FCRA and continue to resist consumer attempts to add equity to the credit system. It is these entities you are forced to contend with when working to enforce your right to a fair and accurate credit report.
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Why Credit Reports are Relevant to Owner Financing & How to Proceed
Nate Hananger asked:
Most people don’t jump with excitement when the hideous task of obtaining a credit report arises. Regardless of who it’s for, it’s just not a fun activity. Some even avoid it like the Ebola virus. But when one is considering owner financing as an incentive to attract more buyers, they may very well dig their own financial grave if such a crucial necessity is overlooked.
First of all, let’s put this common fear at ease for anyone who is conservative or non-confrontational in such business matters as selling their home. You, as a homeowner advertising their home, have a legal right to investigate the creditworthiness of any potential buyer thanks to the federal Fair Credit Reporting Act. This law, as well as the Federal Debt Collection Practices Act (FDCPA), is what credit rights of U.S. consumers are based on.
The “big three” credit reporting agencies in the country can easily assist you with obtaining a credit report: Experian, Equifax and TransUnion. You will need permission from the person whose credit you are pulling, their full name, date of birth and social security number. Furthermore, an individual can acquire their personal credit report from most financial institutions free of charge so long as they are working with them.
Beware of buyers who are uncomfortable with sacrificing a point of two in order to obtain their report. In the event you decide to sell your home to someone whose financial background you know nothing about, you face the potential risk of creating a low-valued promissory note (which you will struggle to sell) or even foreclosing on the payor from them falling behind. It makes no sense to put yourself into a bind that can easily be avoided by doing your due diligence.
A credit report will reveal a great deal of useful information about the buyer-in-question. This includes (but isn’t limited to) their name, alias names, employment history, credit history, account history & balances, liens, foreclosures, bankruptcies, child support, pending & rejected loan or credit card applications and so forth.
A realistic minimum credit score for 1st position notes or deeds of trust is 650. It should be raised to at least 700 for any instrument in the 2nd position. Investors who purchase debt instruments view lower credit as a higher risk because they depend on the payor to make the payments on time in order for them to realize a return on their investment.
Anyone who is thinking about carrying back a note, for a person who will then owe them money, should do the rational thing and research what that person already owes and how they have handled debt throughout the past. Such a decision could most certainly determine whether or not you get paid.
Caffeinated Content
Most people don’t jump with excitement when the hideous task of obtaining a credit report arises. Regardless of who it’s for, it’s just not a fun activity. Some even avoid it like the Ebola virus. But when one is considering owner financing as an incentive to attract more buyers, they may very well dig their own financial grave if such a crucial necessity is overlooked.
First of all, let’s put this common fear at ease for anyone who is conservative or non-confrontational in such business matters as selling their home. You, as a homeowner advertising their home, have a legal right to investigate the creditworthiness of any potential buyer thanks to the federal Fair Credit Reporting Act. This law, as well as the Federal Debt Collection Practices Act (FDCPA), is what credit rights of U.S. consumers are based on.
The “big three” credit reporting agencies in the country can easily assist you with obtaining a credit report: Experian, Equifax and TransUnion. You will need permission from the person whose credit you are pulling, their full name, date of birth and social security number. Furthermore, an individual can acquire their personal credit report from most financial institutions free of charge so long as they are working with them.
Beware of buyers who are uncomfortable with sacrificing a point of two in order to obtain their report. In the event you decide to sell your home to someone whose financial background you know nothing about, you face the potential risk of creating a low-valued promissory note (which you will struggle to sell) or even foreclosing on the payor from them falling behind. It makes no sense to put yourself into a bind that can easily be avoided by doing your due diligence.
A credit report will reveal a great deal of useful information about the buyer-in-question. This includes (but isn’t limited to) their name, alias names, employment history, credit history, account history & balances, liens, foreclosures, bankruptcies, child support, pending & rejected loan or credit card applications and so forth.
A realistic minimum credit score for 1st position notes or deeds of trust is 650. It should be raised to at least 700 for any instrument in the 2nd position. Investors who purchase debt instruments view lower credit as a higher risk because they depend on the payor to make the payments on time in order for them to realize a return on their investment.
Anyone who is thinking about carrying back a note, for a person who will then owe them money, should do the rational thing and research what that person already owes and how they have handled debt throughout the past. Such a decision could most certainly determine whether or not you get paid.
Caffeinated Content
The Importance of Checking Your Credit Report
Paul Hata asked:
Want to know your financial creditworthiness? Have a credit check and determine your personal credit score.Credit check is usually done to verify whether you are eligible for a loan or on any other forms of credit based on your past credit performances.
This will reveal your past as well as your previous credit transactions with different lenders and how you deal with it. Thus, a credit check is the reflection of your past credit performance. It works like a report card, which reveals whether you have pass or fail in a particular subject.
Credit checks are done by lending institutions such as credit card companies and banks on individuals who wish to apply for a loan or any form of credit. In addition, credit checks could also be done by a homeowner whether an individual would be a good tenant or not, as reflected by his or her past credit performance. Insurance firms also run credit checks on individuals who wish to avail of their insurance policies.
You can obtain your credit report containing credit-related information from any of the three major credit-reporting agencies. Furthermore, you can obtain your personal credit reports for free as stated in the FCRA or the Fair Credit Reporting Act. Under this Act, every individual is entitled to receive a free credit report from any of the three major credit-reporting companies in the United States once a year – Experian, Equifax, and Trans Union.
Your free credit report contain your personal information (such as your name and address), how you paid your past and previous bills, and any delinquencies you have committed such as late payments as well as if you have filed for bankruptcy.
To obtain your free credit report, you need to fill up the required form through a centralized credit report website on any of the three major credit bureaus in the United States. You will be required to provide some basic information, which includes your name, permanent address, your social security number, and your birth date.
Your credit report is important in securing yourself against any attempts of identity theft such as credit cards misuse and other forms of fraud. In addition, you must update your credit report regularly as lending institutions would be using such reports to determine if you are worthy enough to be awarded with the loan you have applied for.
After you received your free credit report, you should read each section carefully. All aspects must be included in computing your credit score. So make sure you have paid attention to all of them. Check your report for any discrepancies and make sure that you have not missed any payments at all. Your credit report also comes with the list of individuals or business entities that you have requested credit information from. You may also check to see if such names or entities are familiar with you.
Your free credit report would be used in running a credit check to you when applying for a loan or any other forms of credit. Thus, make sure that it is free of discrepancies or erroneous entries. Keep in mind that this report will reflect your credit performance – ensure that you do not stumble anywhere so that your loan application would always be a success.
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Want to know your financial creditworthiness? Have a credit check and determine your personal credit score.Credit check is usually done to verify whether you are eligible for a loan or on any other forms of credit based on your past credit performances.
This will reveal your past as well as your previous credit transactions with different lenders and how you deal with it. Thus, a credit check is the reflection of your past credit performance. It works like a report card, which reveals whether you have pass or fail in a particular subject.
Credit checks are done by lending institutions such as credit card companies and banks on individuals who wish to apply for a loan or any form of credit. In addition, credit checks could also be done by a homeowner whether an individual would be a good tenant or not, as reflected by his or her past credit performance. Insurance firms also run credit checks on individuals who wish to avail of their insurance policies.
You can obtain your credit report containing credit-related information from any of the three major credit-reporting agencies. Furthermore, you can obtain your personal credit reports for free as stated in the FCRA or the Fair Credit Reporting Act. Under this Act, every individual is entitled to receive a free credit report from any of the three major credit-reporting companies in the United States once a year – Experian, Equifax, and Trans Union.
Your free credit report contain your personal information (such as your name and address), how you paid your past and previous bills, and any delinquencies you have committed such as late payments as well as if you have filed for bankruptcy.
To obtain your free credit report, you need to fill up the required form through a centralized credit report website on any of the three major credit bureaus in the United States. You will be required to provide some basic information, which includes your name, permanent address, your social security number, and your birth date.
Your credit report is important in securing yourself against any attempts of identity theft such as credit cards misuse and other forms of fraud. In addition, you must update your credit report regularly as lending institutions would be using such reports to determine if you are worthy enough to be awarded with the loan you have applied for.
After you received your free credit report, you should read each section carefully. All aspects must be included in computing your credit score. So make sure you have paid attention to all of them. Check your report for any discrepancies and make sure that you have not missed any payments at all. Your credit report also comes with the list of individuals or business entities that you have requested credit information from. You may also check to see if such names or entities are familiar with you.
Your free credit report would be used in running a credit check to you when applying for a loan or any other forms of credit. Thus, make sure that it is free of discrepancies or erroneous entries. Keep in mind that this report will reflect your credit performance – ensure that you do not stumble anywhere so that your loan application would always be a success.
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Personal Credit Report via The Internet
Posted by admin in Non Fiction on August 21, 2008
Mika Hamilton asked:
Many people are under the assumption that personal credit reports are private and can not be accessed by anyone else. However, this is simply not true.
A credit report is comprised of different information. All the information mentioned in your credit report is very important. Not only can your credit be tracked but in some cases so can your investments.
For example, there will be some identifying information like your name, address, Social Security number, date of birth and employment information. The Fair Credit Reporting Act states that your personal credit report can be obtained for any purpose. Businesses, friends, family, and future employees can take a look at your credit report at anytime.
There is at least another case to consider which will help consumers. The private citizens can access the personal credit report of any business that they are considering using in the future.
This loophole has created a huge market for the top three credit bureaus. They can easily sell your credit report for a full profit to anyone with or without your permission.
The reason why the Credit Reporting Agency has these rules that basically work against customers right is because people do not know that their personal credit reports can be obtained so easily, and the people who do know do not care.
Another problem arises from this lack of privacy – that criminals can access your credit report and then use your credit information including your name, address, and social security number. The best way to make sure you are not being taking advantage of is to obtain a copy of your own personal credit report and check it for errors.
Ignoring problems will only lead to more problems. Credit Bureaus are not very forgiving of identity fraud. If your credit score is low it can take a long time to repair and you have no real alternative but to wait and be patient.
As technology advances there will continue to be problems with criminals accessing personal credit reports and use them in illegal ways. Unless, we speak to our governmental officials, our credit and private information will be readily available to anyone who can pay the 9 dollars to access it. According to state law, all credit reporting agencies are required to provide you with two free copies of your personal credit report. You can do this by phone or online with Annualcreditreport.com, Equifax.com, and Experian.com. Remember to know your rights as a private citizen, and understand that information you believe to private may not be. Being educated and informed is the best way to prevent identity fraud and save your credit score.
Credit scores can affect your ability to just about anything including investing. People with local credit scores are considered high risk to investment companies and they would rather not deal with people who they may lose money too in the long run. Make sure your credit report is correct and up to date before you start investing.
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Many people are under the assumption that personal credit reports are private and can not be accessed by anyone else. However, this is simply not true.
A credit report is comprised of different information. All the information mentioned in your credit report is very important. Not only can your credit be tracked but in some cases so can your investments.
For example, there will be some identifying information like your name, address, Social Security number, date of birth and employment information. The Fair Credit Reporting Act states that your personal credit report can be obtained for any purpose. Businesses, friends, family, and future employees can take a look at your credit report at anytime.
There is at least another case to consider which will help consumers. The private citizens can access the personal credit report of any business that they are considering using in the future.
This loophole has created a huge market for the top three credit bureaus. They can easily sell your credit report for a full profit to anyone with or without your permission.
The reason why the Credit Reporting Agency has these rules that basically work against customers right is because people do not know that their personal credit reports can be obtained so easily, and the people who do know do not care.
Another problem arises from this lack of privacy – that criminals can access your credit report and then use your credit information including your name, address, and social security number. The best way to make sure you are not being taking advantage of is to obtain a copy of your own personal credit report and check it for errors.
Ignoring problems will only lead to more problems. Credit Bureaus are not very forgiving of identity fraud. If your credit score is low it can take a long time to repair and you have no real alternative but to wait and be patient.
As technology advances there will continue to be problems with criminals accessing personal credit reports and use them in illegal ways. Unless, we speak to our governmental officials, our credit and private information will be readily available to anyone who can pay the 9 dollars to access it. According to state law, all credit reporting agencies are required to provide you with two free copies of your personal credit report. You can do this by phone or online with Annualcreditreport.com, Equifax.com, and Experian.com. Remember to know your rights as a private citizen, and understand that information you believe to private may not be. Being educated and informed is the best way to prevent identity fraud and save your credit score.
Credit scores can affect your ability to just about anything including investing. People with local credit scores are considered high risk to investment companies and they would rather not deal with people who they may lose money too in the long run. Make sure your credit report is correct and up to date before you start investing.
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