Archive for December 29th, 2008
Dec
29
Credit Repair Shocking Insights
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Ian Webber asked:
Credit Repair and Credit Scores
Credit repair is on everyone’s mind these days. And credit scores are for sale everywhere. There is only one problem. None of these advertised credit scores are the same as the credit scores that lenders use when making credit decisions. Whoa. That’s right. People spend huge amounts of money to buy credit scores which they mistakenly believe are relevant to their life. What the heck is the story? You want to know? Okay. I’ll tell you!
Lenders Use FICO Scores
Lenders use a type of credit score called the FICO score. FICO stands for Fair Isaac Corporation, the creator of this important score. The credit bureaus gather consumer credit data and run their data through the FICO credit score software to produce the scores that lenders use to make decisions.
Avoid Knockoff Scores
If you are starting a credit repair project or plan to get a loan in the near future and want to know where you stand you should purchase your FICO scores. But if you buy your scores from one of the credit bureaus websites you will get the bureaus own proprietary scores. And you will be no wiser than you were before because these knockoff scores can easily be 100 points different from your FICO scores; deceptive for your loan information, and useless for benchmarking your credit repair.
It’s About Money Honey
Alas, the credit bureaus realized they could make more money by creating their own version of a credit score and selling it to the public. If they sold genuine FICO scores to consumers they would have to pay fees to Fair Isaac. Lenders demand FICO scores; it’s a simple fact, they would never settle for less. Consumers on the other hand seem to be clueless. But there is a reason that consumers are clueless, the credit bureaus don’t offer any transparency, just a sales pitch.
Credit Repair and the Right Stuff
It’s all about your FICO scores. If you are going to benchmark your credit repair effort or plan to get a loan these are the only scores that matter. And you can get them online at the website for Fair Isaac Corporation, MyFico.com. The cost is about $50 for all three scores. Now are your ready to hear how these important scores work? Here is a mixture of the information published by Fair Isaac and some practical credit repair tips from yours truly, and I do know a bit about this, so listen up.
Major Credit Repair Weight
Fair Isaac is happy to tell you that the major part of your credit score is based on two categories. These are your payment history, weighing in at a hefty 35% of your score, and your account balances, tipping the scale at 30% of your total score. This is a bare bones fact, and much useful credit repair info is left unsaid, so I guess I’ll say it. If you care about your credit scores you need to focus on your revolving balances.
Revolving Account Bombs
Revolving balances are the lynchpin of your credit scores, and hence your credit repair effort. You can have a decade of perfect credit under your belt. You may have paid off a dozen cars and made every payment on time, but if you run up your credit card balances to the max and then check your credit scores you are in for a rude awakening. Maxed out credit cards will devastate your scores. Do you want some numbers? Okay. A maxed out card can erase 100 points from your score. An over-limit card can knock 150 points off; it’s a credit repair disaster. But wait, there is more.
Credit Repair Leverage
I don’t want you to feel like this is all bad news. Revolving debt is conversely the most powerful credit repair tool you have at your disposal for pumping up your scores. FICO recognizes 5 different balance tiers: 20, 40, 60, 80, and 100 percent usage. If you are getting a loan in the near future and have the resources to pay your balances under 20% of the limit your scores will be shining.
The Rest of the Story
The other ingredients relevant to your credit repair task include the age of your accounts, coming in at 15% of your score, new credit and inquiries at 10%, and the type, or mix of credit at the final 10%. These remaining ingredients are minor and for most people will take care of themselves as life goes on. I should, however, add that it is valuable credit repair advice to avoid opening new accounts before applying for a major loan, and to keep those inquiries to a minimum. Cheers!
Copyright © 2008 Ian Webber. All Content. All Rights Reserved.
Credit Repair and Credit Scores
Credit repair is on everyone’s mind these days. And credit scores are for sale everywhere. There is only one problem. None of these advertised credit scores are the same as the credit scores that lenders use when making credit decisions. Whoa. That’s right. People spend huge amounts of money to buy credit scores which they mistakenly believe are relevant to their life. What the heck is the story? You want to know? Okay. I’ll tell you!
Lenders Use FICO Scores
Lenders use a type of credit score called the FICO score. FICO stands for Fair Isaac Corporation, the creator of this important score. The credit bureaus gather consumer credit data and run their data through the FICO credit score software to produce the scores that lenders use to make decisions.
Avoid Knockoff Scores
If you are starting a credit repair project or plan to get a loan in the near future and want to know where you stand you should purchase your FICO scores. But if you buy your scores from one of the credit bureaus websites you will get the bureaus own proprietary scores. And you will be no wiser than you were before because these knockoff scores can easily be 100 points different from your FICO scores; deceptive for your loan information, and useless for benchmarking your credit repair.
It’s About Money Honey
Alas, the credit bureaus realized they could make more money by creating their own version of a credit score and selling it to the public. If they sold genuine FICO scores to consumers they would have to pay fees to Fair Isaac. Lenders demand FICO scores; it’s a simple fact, they would never settle for less. Consumers on the other hand seem to be clueless. But there is a reason that consumers are clueless, the credit bureaus don’t offer any transparency, just a sales pitch.
Credit Repair and the Right Stuff
It’s all about your FICO scores. If you are going to benchmark your credit repair effort or plan to get a loan these are the only scores that matter. And you can get them online at the website for Fair Isaac Corporation, MyFico.com. The cost is about $50 for all three scores. Now are your ready to hear how these important scores work? Here is a mixture of the information published by Fair Isaac and some practical credit repair tips from yours truly, and I do know a bit about this, so listen up.
Major Credit Repair Weight
Fair Isaac is happy to tell you that the major part of your credit score is based on two categories. These are your payment history, weighing in at a hefty 35% of your score, and your account balances, tipping the scale at 30% of your total score. This is a bare bones fact, and much useful credit repair info is left unsaid, so I guess I’ll say it. If you care about your credit scores you need to focus on your revolving balances.
Revolving Account Bombs
Revolving balances are the lynchpin of your credit scores, and hence your credit repair effort. You can have a decade of perfect credit under your belt. You may have paid off a dozen cars and made every payment on time, but if you run up your credit card balances to the max and then check your credit scores you are in for a rude awakening. Maxed out credit cards will devastate your scores. Do you want some numbers? Okay. A maxed out card can erase 100 points from your score. An over-limit card can knock 150 points off; it’s a credit repair disaster. But wait, there is more.
Credit Repair Leverage
I don’t want you to feel like this is all bad news. Revolving debt is conversely the most powerful credit repair tool you have at your disposal for pumping up your scores. FICO recognizes 5 different balance tiers: 20, 40, 60, 80, and 100 percent usage. If you are getting a loan in the near future and have the resources to pay your balances under 20% of the limit your scores will be shining.
The Rest of the Story
The other ingredients relevant to your credit repair task include the age of your accounts, coming in at 15% of your score, new credit and inquiries at 10%, and the type, or mix of credit at the final 10%. These remaining ingredients are minor and for most people will take care of themselves as life goes on. I should, however, add that it is valuable credit repair advice to avoid opening new accounts before applying for a major loan, and to keep those inquiries to a minimum. Cheers!
Copyright © 2008 Ian Webber. All Content. All Rights Reserved.
Dec
29
Credit Repair Truth or Dare
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Jim Kemish asked:
Credit Repair and the Great Illusion
Credit repair is a discovery process. The vast majority of consumers in the United States are intimidated by the thought of credit repair. The credit bureaus are viewed in the same light as the Internal Revenue Service; a temperamental and potentially ruthless big brother. Oddly enough, this perception could not be farther from the truth. It turns out that the credit bureaus are quite tame and even reasonable, if you know how to manage them.
Protecting the Myth
Like the Wizard of Oz, the credit bureaus live happily behind the curtain of illusion, benefiting from the aura of power. Let’s dispel the myth a bit to spark your credit repair efforts. The credit bureaus are not government entities, nor do they have any government blessing. They are big business, and exist to make money. And they do a great job of it. They are well managed, well focused, and extremely profitable. And in spite of the fact that they have become indispensible intermediaries and guardians of your precious credit score, any communication from you is an unwanted burden on their bottom-line.
Credit Repair and the Truth
So, what went wrong? If the credit bureaus are doing such a great job of running their operations why are there so many errors in consumer credit files? Why is credit repair even needed? There is no contradiction here. Profitability and competence in no way guarantee an accurate product. In fact, by moderating the effort that goes into quality control the credit bureaus demonstrate their business savvy and bolster their bottom line. Does this seem outrageous? After all, your financial life depends on your credit scores. Shouldn’t the credit bureaus be held to the highest level of accuracy when it comes to such important data? Yes and no.
Legislation Cuts Both Ways
Because of the importance of the product they offer, the credit bureaus have been on the business end of countless lawsuits. In fact, a day does not go by when a non-compliance lawsuit is not filed against one of the three major credit bureaus. The importance of credit repair and the groundswell of consumer concern have not escaped the notice of federal lawmakers. The law that governs the credit reporting industry and provides legal leverage used by professional credit repair services is called the Fair Credit Reporting Act (FCRA). There is much in the way of consumer protection built into the FCRA, but there is just as much protection for the credit bureaus.
Credit Repair to the Rescue
The law simply demands of the credit bureaus that reasonable steps be taken to maintain quality. And here is the essential point for all of those interested in credit repair to be aware of; reasonable steps may be determined by the credit bureaus based on the costs associated with implementation. In other words, if it costs too much to fix, it’s going to stay broken. But, not to worry, you are not without a remedy. Credit repair to the rescue.
Credit Repair and the Bureaucracy
As frustrating as it may be to discover that there such a margin of error allowed in an industry that has so much power over your life, there are ways you can make sure that your credit report shines. All the credit repair tools you need are built into the same tome of law, the FCRA. Many people think of the FCRA as the consumer protection law that was designed to force the credit bureaus to provide more accurate data. It’s not so.
Looking More Closely
A close reading will reveal the fact that the overriding focus of the consumer protection built into the FCRA provides consumers with basic legal rights to rectify credit reporting errors. This is a radical difference from forcing the bureaus to be accurate. The true message of the FCRA is, look out for you, because no one else will.
How Bad is it?
If the FCRA puts so much of the burden of accuracy on the consumer, it means, by inference, that in the absence of consumer participation credit reports are likely contain errors and require credit repair. And that is exactly what has occurred. Fully seventy-five percent of consumer credit reports contain errors. Fifty percent contain errors significant enough to cause those afflicted to pay premium interest rates and even get denied for loan requests.
The Law is Your Sword
Credit repair, as a result, is as an essential process in your life as a regular physical examination or tuning up your car. Credit repair is far more than a credit rejuvenation for those with past credit issues, it is a necessity for everyone. If you don’t have the time to manage the credit repair process on your own, hire a professional. It’s important, it’s your credit, take care of it. Good luck!
Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.
Credit Repair and the Great Illusion
Credit repair is a discovery process. The vast majority of consumers in the United States are intimidated by the thought of credit repair. The credit bureaus are viewed in the same light as the Internal Revenue Service; a temperamental and potentially ruthless big brother. Oddly enough, this perception could not be farther from the truth. It turns out that the credit bureaus are quite tame and even reasonable, if you know how to manage them.
Protecting the Myth
Like the Wizard of Oz, the credit bureaus live happily behind the curtain of illusion, benefiting from the aura of power. Let’s dispel the myth a bit to spark your credit repair efforts. The credit bureaus are not government entities, nor do they have any government blessing. They are big business, and exist to make money. And they do a great job of it. They are well managed, well focused, and extremely profitable. And in spite of the fact that they have become indispensible intermediaries and guardians of your precious credit score, any communication from you is an unwanted burden on their bottom-line.
Credit Repair and the Truth
So, what went wrong? If the credit bureaus are doing such a great job of running their operations why are there so many errors in consumer credit files? Why is credit repair even needed? There is no contradiction here. Profitability and competence in no way guarantee an accurate product. In fact, by moderating the effort that goes into quality control the credit bureaus demonstrate their business savvy and bolster their bottom line. Does this seem outrageous? After all, your financial life depends on your credit scores. Shouldn’t the credit bureaus be held to the highest level of accuracy when it comes to such important data? Yes and no.
Legislation Cuts Both Ways
Because of the importance of the product they offer, the credit bureaus have been on the business end of countless lawsuits. In fact, a day does not go by when a non-compliance lawsuit is not filed against one of the three major credit bureaus. The importance of credit repair and the groundswell of consumer concern have not escaped the notice of federal lawmakers. The law that governs the credit reporting industry and provides legal leverage used by professional credit repair services is called the Fair Credit Reporting Act (FCRA). There is much in the way of consumer protection built into the FCRA, but there is just as much protection for the credit bureaus.
Credit Repair to the Rescue
The law simply demands of the credit bureaus that reasonable steps be taken to maintain quality. And here is the essential point for all of those interested in credit repair to be aware of; reasonable steps may be determined by the credit bureaus based on the costs associated with implementation. In other words, if it costs too much to fix, it’s going to stay broken. But, not to worry, you are not without a remedy. Credit repair to the rescue.
Credit Repair and the Bureaucracy
As frustrating as it may be to discover that there such a margin of error allowed in an industry that has so much power over your life, there are ways you can make sure that your credit report shines. All the credit repair tools you need are built into the same tome of law, the FCRA. Many people think of the FCRA as the consumer protection law that was designed to force the credit bureaus to provide more accurate data. It’s not so.
Looking More Closely
A close reading will reveal the fact that the overriding focus of the consumer protection built into the FCRA provides consumers with basic legal rights to rectify credit reporting errors. This is a radical difference from forcing the bureaus to be accurate. The true message of the FCRA is, look out for you, because no one else will.
How Bad is it?
If the FCRA puts so much of the burden of accuracy on the consumer, it means, by inference, that in the absence of consumer participation credit reports are likely contain errors and require credit repair. And that is exactly what has occurred. Fully seventy-five percent of consumer credit reports contain errors. Fifty percent contain errors significant enough to cause those afflicted to pay premium interest rates and even get denied for loan requests.
The Law is Your Sword
Credit repair, as a result, is as an essential process in your life as a regular physical examination or tuning up your car. Credit repair is far more than a credit rejuvenation for those with past credit issues, it is a necessity for everyone. If you don’t have the time to manage the credit repair process on your own, hire a professional. It’s important, it’s your credit, take care of it. Good luck!
Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.