Google Analytics Alternative Credit Zeal - Repair & Improve Your Credit Score With Confidence: March 2017


The Big 3 Credit Reporting Agencies

The Big 3 Credit Reporting AgenciesA credit reporting agency is a repository of information that holds an individual’s credit or payment history. An individual’s credit report is created when a request for a report by a lender, credit card company or other authorized party requests it. Credit bureaus or credit reporting agencies hold the consumers credit data in their databases. The data is always there but the credit report does not really exist until it is asked for.  It is then compiled by the credit reporting agency based on the information stored in the agencies file. 
Information in a credit report is supplied by lenders, from court records, credit card companies, banks, mortgage companies and other creditors including the individual to create an in-depth credit report. A credit reporting agency or credit bureau collects and reports the credit information from these sources and retains the data until called for. An individual’s credit history is compiled and maintained by these credit reporting agencies as needed following their procedures and legal guidelines. The information held in the report is also used to calculate an individual’s credit score best a computer scoring model at the credit reporting agency.
There are three big national credit reporting agencies in the United States. Experian, TransUnion and Equifax are the three biggest credit reporting agencies.  They are not the only credit reporting agencies in the United States but they are the biggest by a considerable degree. There are many smaller, regional and even industry specific credit reporting agencies that provide clients with credit reports. There are also many different international credit reporting agencies that operate in specific regions.
These big credit reporting agencies are the ones in which most of the attention about credit reports and credit scores is focused on because they maintain the largest national databases of consumer credit information. The big three credit reporting agencies perform two similar basic services: collecting and reporting credit information. 
The 3 credit agencies are independent of one another and though they conduct their business of data gathering to compile credit reports in a similar fashion they do not operate in the same way.  This is the primary reason why consumers who obtain a credit report from the three largest credit reporting agencies get a report back with some different data. Therefore, a credit report from Experian will contain slightly different information than a credit report from TransUnion and Equifax. Not every creditor and lending institution such as credit card companies, banks or mortgage lenders report to all three credit bureaus, leading to additional difference between the three big credit reporting companies.
The majority of the credit data supplied to a credit reporting company is on a voluntary basis. A credit card company or lender can choose to supply the data or simply not choose to be burdened with the responsibility of supplying data files on their customers to the credit agencies. A common example of this is small and regional credit unions. It is likely that loans and credit accounts from these entities will not be found in a credit report.  However, thousands of creditors, lenders and other businesses do send credit information and updates to each of the credit reporting agencies, frequently once a month.
The lending institutions and other creditors that do not supply information, send updated consumer credit information to one or more of the big three credit reporting agencies.  The information often includes how much the consumer owes at that institution, the original amount of money extended, when the account was opened and the payment history.  The same lending institutions and creditors that supply information to credit reporting agencies may also be the ones requesting credit reports when a consumer applies for credit.
The big three credit bureaus also review public records for information, such as court records from bankruptcies, foreclosures and legal judgments. Information retained also includes recorded information about credit applications and credit inquiries.
TransUnion, Experian and Equifax now market their credit reports directly to consumers, in addition to its primary business of providing the reports to potential creditors. The big three agencies can be contacted at the following numbers. All of the services performed by the big three offered directly to the consumer are fee based.
Equifax, Inc. is a consumer credit reporting agency that is one of the big three credit reporting agencies.The company was founded in 1899 and is the oldest of the three agencies. Equifax is based in Atlanta, Georgia.
For general information and to order a credit report or score directly from Equifax you can contact the company at:
P.O. Box 740241, Atlanta, GA 30374
Experian is a consumer credit reporting agency, also part of the big three credit reporting companies.
General information and credit report order information can be obtained at:
888-EXPERIAN (888-397-3742)
P.O. Box 2002, Allen TX 75013
TransUnion is a consumer credit reporting agency, considered one of the big three agencies. TransUnion was created in 1968 and is based in Chicago, Illinois.
General information and to order credit report and score:
P.O. Box 1000, Chester, PA 19022

Free Annual Credit Report 

Consumers may also get one free credit report annually from each of the three major credit bureaus. To do this you simply fill out one form with all of the required identifying information and indicate which of the three bureaus that you want to receive a report from. You may request to receive your free credit report from one, two, or all three of the credit bureaus by filling out only this one form from or call 877-322-8228. Free credit reports are available only once per year.

Many consumers request all three at the same time while other consumers prefer to receive them one at a time spread out throughout the year. If you are obtaining these reports to file disputes thru the provisions of the FCRA it is probably a good idea to request all three at the same time. Keep in mind that not all three reports may be identical since not all creditors report to all three bureaus. 

What are FICO Scores

What are FICO ScoresFICO scores are one of several credit scores that are used by lenders, banks, insurers, credit card companies and other companies to measure consumer risk objectively.  A credit score can be created by different companies based on information in a credit report, but FICO® scores are the most used credit bureau scores in the world.  According to the Fair Isaac Corporation, the creator of the FICO score, more than 100 billion scores have been sold by the company and three out of four US mortgage originations are based on a FICO score. 
Most credit bureau scores are often called “FICO scores” because most credit bureau scores used in the U.S. are produced from software developed by Fair Isaac Corporation.  In fact, Fair Isaac Corporation or FICO pioneered the wide spread use of credit scoring models.  The FICO score is available through all of the major consumer reporting agencies in the United States and Canada: Equifax, Experian and TransUnion.  But not all credit scores retrieved or sold to consumers are FICO scores. 
Credit scores, including FICO scores are derived from the data in an individual’s credit report.  Different credit scoring models can be used by different companies.  And there are different credit scores and credit score modeling programs available.  There is some significance to the fact that the FICO score is the biggest and as of now has the greatest impact in credit related decision making.  The FICO score is a mathematical algorithm that is made available to the three main credit reporting agencies in a software package.
Different credit bureau scores will evaluate a credit report differently and comparing the absolute numbers between different credit bureau scores is meaningless.  A higher number from one company does not necessarily mean it indicates the borrower is less of a credit risk.  FICO scores currently range in value from 300-850.
The credit score, whether it is a FICO score or another model, is used primarily determine a numerical valuation on the quality of credit risk an individual presents.  Credit scores are designed to be a guide to future risk based solely on credit report data.  All current credit score models, including FICO scores, evaluate the data in the credit report and quantify it with a number in which the higher the number or credit score, the lower the risk.
One bit of confusion that can arise within the lending industry over FICO scores is the different named scores that are actually developed by Fair Isaac Corporation.  FICO scores technically have different names at each of the credit reporting agencies.  All of these scores, however, are developed using the same methods by the Fair Isaac Corporation.
Like an individual’s credit, a FICO score will change over time.  As your data changes within the credit report or through the credit reporting agency, so will the credit score since it is based on the data in the credit report.
It is also important to note that since each credit reporting agency will have similar but not identical information about an individual’s credit profile, therefore the FICO score or any credit score will be slightly different from each of the major credit bureaus, Experian, TransUnion, and Equifax.  This all means that an individual will have three potentially different FICO scores, one for each of the three major credit bureaus.
Remember, regardless of credit score obtained, the score is based on the information contained in the credit report.  To change a score, you have to change the underlying data the score is based on.  Any information not found in your credit report is not used to calculate a credit score or FICO score.

Cost of a Bad Credit Report

Cost of a Bad Credit Report
Your credit report can impact a many areas of your life.  Although creditors usually consider a number of factors in deciding whether to grant credit, most creditors rely heavily on your credit history.  Credit card companies, mortgage lenders, insurers and employers all use your credit report to make decisions about you and your life.  The fact is that all legitimate creditors want to know whether you are likely to be a good credit risk.  If there are inaccuracies in your credit report, it can cost you money by resulting in increased interest rates.  It could also keep you from your dream job.

Job opportunities are becoming increasingly dependent on credit reports and credit profiles.  Prospective employers are getting a credit report on new job applicants as a way to assess their character as well as measuring financial stress. 

Insurance premiums with insurance companies are becoming correlated to credit scores and credit reports.  Most insurance companies consider that there’s a association between good credit scores and fewer insurance claims, so you may get better rates with a higher score.  In worst cases, a low score could even mean fewer insurers are willing to offer you coverage at all.

Other services that may be dependent on a good credit score include deposits and agreements for gas service, electric utilities, cable service, phone and cell phone services.
At a minimum a consumer should make sure everything in their credit report is accurate and up to date to avoid the delays and problems a poor credit report and credit score can cause.  After that, if the credit report shows significant blemishes or a low credit score there are a few actions to take.

Check your credit report regularly.  Check your report with the three largest credit reporting agencies, Equifax, Experian and TransUnion at least once or twice a year.  If you plan on making a major purchase, such as a house or a car, review your credit reports at least 3-6 months beforehand.  If there are errors in your credit report, this will allow you time to investigate and correct any mistakes before they affect your purchase.

Know what to look for.  Make sure that in addition to late payment reports, you are aware of other damaging information that may be more difficult to spot.  Verify the balances, account status and the dates all accounts were opened.  These errors can have a big impact on your credit score, which can affect your ability to get a loan.

Typographical errors or mistakes in your address wont have a major effect on your credit score, so these inaccuracies are not important.  If you find inaccuracies, you can dispute them to have them removed from your credit record.  If the reports are accurate, they stay on your record for up to 10 years.

Report the problems in your credit report right away.  If you spot an error in your credit report, make sure that you report it immediately.  You can contact the creditor directly and if you can provide documentation, they will contact the credit reporting agency and correct the error during the next scheduled update.

If you are unable to work with your creditor to remove any inaccuracies, you can dispute errors directly to the credit bureaus.  Credit inaccuracies can be dispute online or through the mail.  Once you start dispute proceedings, the credit bureau has 30 days to investigate and correct the error.  By keeping your credit report free of errors, you will be ready for your next major purchase or transaction or any other service that is dependent on a good credit report and credit score.

What You Need to Know About Credit Counselors

Credit counseling organizations are designed for people who are so far in debt that they are facing bankruptcy. This is an important distinction. If you find yourself with poor credit and a poor credit score but are not drowning in debt, what a counselor will suggest is what you already know: be disciplined to create a workable budget and stick to it while you work out repayment plans for any creditor with which you are in arrears.  Now if you have tried to do this with little success you may benefit from the service.
We all know how easy it can be to get off track and spend a bit more than we can afford to have a decently comfortable life. There are times when we don't realize just how much credit card companies charge in interest and late fees.  A nonprofit debt consolidation program or credit counseling organization will work with your creditors to reduce or eliminate late payment charges and delinquent fees.

There is another point to consider before you decide to get involved with a credit counseling or repair company.  Once you are enrolled and under contract, this may show up on your credit report.  With this on your report, you will most likely have trouble working out any financing or loan until you complete the contract.  Credit counseling organizations can be a helpful service but make sure you understand what they can and can’t do.  They will not be able to reduce the vast majority of your debt, which would require an agreement with the creditor itself.  In addition, the payment arrangements they make may fall short of the contractual amount due on your credit cards and other debts.  These companies, even when they agree to waive late fees, will report to the credit bureaus the late payments that will be a result of the reduced payments coming from the credit counseling organization.  In these situations, your credit history and credit report will show increased delinquency levels and your credit score will most likely drop further.
The idea of a nonprofit credit counseling program should be to help the consumer become educated about how credit works and provide counseling to help them handle their finances.  They also provide services to help lower the existing debt wherever possible and work with creditors to lower your monthly payments.  In many cases, you will pay one monthly sum to them and they will disburse payments to your creditors.  There will be a fee for this service which will be added to your payment to them each month.

If You Want to Take the Next Step

Understand Your Rights before you look for a credit counseling company.  Most programs assess your financial situation, taking into account your monthly liabilities, expenses, and assets. They then work with your creditors to work out a payment schedule to pay down the debt. Once an agreement is in order, you will pay the credit counseling company a set amount each month and the company will in turn pay your creditors taking a piece of the payment as a fee. Just because an organization says it’s “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate.
You can expect a start-up fee and a monthly maintenance fee, and although it may only be $10-15, this can add up fast, adding to your debt.  Beware of credit counseling companies who use your first payment as the total cost of the start-up fee, which could amount to several hundred dollars.
The reason most people sign with a credit counseling company to have them work with creditors to stop those recurring fees and new late fees and penalties.  These companies may not do much more than that.  You still need to make the painful decisions to cut your expenses – like turning off the cable service for a period or selling a second car and taking the bus.  You will still pay old late fees, interest charges, and most of the original balances on your charge accounts, as well as whatever fees the credit counseling company charges.
Reputable companies can truly help those who are in danger of foreclosure and bankruptcy. Non profit debt consolidation programs may help someone get out of debt faster or help alleviate some of the difficulty in handling credit card and debt payments as well all help educate individuals on how to handle credit and debt.   Credit counseling can help those with credit issues become more educated about debt and how it affects your life, and teach you how to stay debt free.  This will hopefully show you how to avoid financial problems in the future.  You will receive one-on-one advice from a certified credit counselor who will work with you and your budget to design a payment plan that is unique to your situation.  Credit counselors know the particulars of creditors rules and policies.  This gives them an inside track when it comes to negotiating with your creditors.
Individuals who are jeopardy of foreclosure or need to file bankruptcy can find a state-by-state list of government-approved organizations on the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees.
The term “nonprofit” does not mean free.  Being nonprofit does not make them a better choice when it comes to helping you consolidate your debts.  You should always do your homework and find the company and program that is right for you.
If you’re in trouble, but not on the brink of bankruptcy, consider working with your creditors directly to create a payment plan or try to consolidate debt on one single card at a low fixed rate.  You’d be surprised at how many options are available to you if you take the time to look around and ask questions.  The conversations are uncomfortable and debt consolidation is no fun, but remember banks and lenders want your business and will usually work with you.

Credit Repair Scams

When a person falls behind on their debt, things can be overwhelming.  They may be laden down with harassing calls from debt collectors.  Or worse, they might even have to go to court because a creditor, fed up with not getting their money, decided to take legal action.  A person’s difficulties with debt are even more exacerbated if they are trying to buy or rent a house because of their bad credit report and credit scores.  For all of these reasons many will be tempted to turn to credit repair companies.  However, this may not be a wise choice. Credit Repair Scams
When consumers have problems with credit, excessive debt and a bad credit profile or credit report there are a number of techniques that can be used to help the situation.  Some of the solutions involve credit counseling, debt consolidation and credit repair.  These are not the same processes.  Credit repair companies generally engage in the sole process of removing bad credit in someone’s credit report and more often than not they either do not accomplish the job and / or charge exorbitant fees to do this.  These services are generally very ineffectual and costly and are designed to take advantage of consumers in financial trouble.
The biggest issue with credit repair services and agencies is that if they do ‘fix’ one’s credit they are using means that a person could do themselves for free.  This involves sending dispute letters, something that is easy to do.  A basic dispute letter will inform a creditor that they must provide documentation proving a person owes money to them.  They must also correct any errors that are listed in the letter.  If the creditor fails to do either of these things, it is possible that a person can get any debt associated with them erased. 
This process is without question time consuming and has to be performed in a fairly precise manner to make sure the debts is identified properly, the letter is sent according to the standards established by the Fair Credit Reporting Act and that the proper follow up is completed.  The amount of work involved may warrant the need for a assistance or may not, the problem with most all credit repair companies is that there fees are excessive and there results are generally underwhelming.
So, if sending dispute letters is so easy, why do people still go to credit repair companies?  It’s usually because they believe the credit repair company has access to means that they don’t have access to.  This is just not true.  Even credit repair companies that are legal are limited to just sending out dispute letters.  Consumers can do this themselves, even if they don’t know how to write one.  This is because numerous sample dispute letters are available all over the Internet.
Some credit repair companies also use a scam technique known as file segregation to try to ‘fix’ the credit of their customers.  The process of file segregation begins with the credit repair company asking the customer to get an employee identification number, (known as EIN).  This is a form of identification that works like a Social Security number; it is often assigned to employees.  Anyway, once an EIN has been obtained, the customer uses it to establish a new credit identity.  Different contact information is used to make it harder for creditors to track the customer down. 
The problem with trying to fix credit in this manner is that it is considered fraudulent.  An individual cannot establish a new identity with the intent to escape debt associated with a previous identity.  And though having an EIN is perfectly legal, things appear fraudulent because of the way different addresses are used.  When the government notices what is going on, it is possible that individuals associated with the scam, (who are actually the victims), get criminally prosecuted.  The credit repair companies may also get in trouble, but who cares what happens to them.
All in all, the process of credit repair is one that may take time and requires attention to detail.  However, some debtors will be either lucky enough or have the right information and may actually get some of their credit expunged through the process of sending dispute letters.  But the likelihood of getting all of one’s debt eliminated through an expensive credit repair company is unlikely.  The one real solution is being patient, work on the debts yourself, pay back bills over time, consider debt consolidation or even bankruptcy if the bills are more than what one can handle and do your own research to solve the problem.  The tools to fix your credit and debt problems are easily available to you.

Useful links:

Understand Your Rights with Credit Repair Companies

Understand Your Rights with Credit Repair CompaniesIf your finances are spinning out of control it may make sense to get some help.  The first task is always to help yourself.  Stop and assess your debts and credit history and work on a new path of debt management and credit repair on your own.  No matter how difficult credit and debt problem may become, the first step is stop and evaluate what the problems are.  Look over your budget, review your bills and review your credit report.  Read about all the tools and techniques to reduce debt payments and clear up previous bad credit your self.  When this is too overwhelming, outside help maybe needed. 
Reputable credit counselors can offer advice to help improve your money management skills, manage the debt you have amassed and develop a budget you can live on.  They are certified counselors and will take the time to develop a plan that is customized to your situation.  They help you take the steps you need to make to get your finances back in shape.
Credit repair organizations are not federally regulated and less than half of all states have any local regulations.  Scams and fraud are out there.  It is important to remember that while this organization can help you climb out of debt, they are in it to make money or cover their costs depending how the program – paid for by the fees you pay them to help you.  Obviously if you are already in debt, this will increase your expenses.
If you are on the brink of bankruptcy this may be your only course of action.  As of October 17, 2005, you must get credit counseling from a government-approved organization within six months before you file for bankruptcy relief.  So if you are looking for a credit repair organization, be sure you are very careful in making that selection.  You can find a state-by-state list of government-approved organizations on the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees.
By law, credit repair organizations must give you a copy of the Consumer Credit File Rights Under State and Federal Law before you sign a contract.  This is document with a lot of small print but the law contains specific protections for you.  Credit repair companies cannot:
Make false claims about their services.  Face facts, you will not get out of the trouble you are in overnight no matter what they promise.
Charge you until they have completed the promised services.  Beware of any upfront fee that sounds questionable.
Do anything for you until they have your signature on a written contract and a three-day waiting period has expired.  During this time, you can cancel the contract without paying any fees.
Be sure you get a written contract that spells out your rights and obligations, and read it carefully.  Look for:
  • The payment terms for services, including their total cost spelled out clearly.
  • The description of the services to be performed should be detailed.
  • The contract must specify how long it will take to achieve the results they expect to get for you.
  • The contract must spell out any guarantees they offer.
  • The company’s name and business address – there are a lot of internet-based companies that may only collect a fee and disappear.