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Posts Tagged ‘credit score’

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Credit Bureau Blues? Contest That Debt!

February 17th, 2010 by Matthew C. Keegan | 4 Comments | Filed in Credit Reports

Credit reports contain important information concerning you including where you reside, work, in addition to particulars in relation to your credit history. Lenders, employers, landlords, hospitals, and various parties can easily acquire copies of your credit reports to discover your creditworthiness.

housing crisisIn a June 2004 survey, the Public Interest Research Group (U.S. PIRG) discovered that one in four credit reports contained serious enough errors to deny consumers credit, keep them from getting an apartment, or be denied employment.

Obtain your credit reports. You found an error on one credit report, but you should check your other two reports to determine if this same mistake continues to be included on those as well. Experian, Trans Union, and Equifax are the three credit reporting bureaus.

You can obtain one free copy annually of each credit report by visiting AnnualCreditReport.com. Review each report; errors must be reported directly to the respective credit bureau.

File a credit report dispute. According to the Federal Trade Commission (FTC), both the credit bureau and the information provider must correct inaccurate or incomplete information appearing on your report. In your case the information provider would be a lender who insists that you owe them money.

Send a dispute letter to the credit bureau explaining why you believe certain information is incorrect and include copies of supporting documents such a copy of your loan showing that it has been paid off. Visit the post office and request that your letter be sent by certified mail with return receipt requested in order to ensure that the consumer reporting company received it. Keep copies of your dispute letter and enclosures for your records. Repeat this step with each credit bureau only if that information appears on their reports.

Wait thirty days. Once you have filed your dispute, the credit bureau has to investigate your claim, something they must complete within thirty days if your claim has merit. They will contact your lender and provide to them a copy of your dispute letter and supporting documentation for their review. Once the investigation is complete, then the credit reporting bureau must give to you their findings in writing.

If ruled in your favor, then the credit bureau will also issue to you a free, corrected copy of your credit report. You will also be supplied with contact information of the information provider. You can also request that the credit bureau, at their own expense, notify everyone who has looked at your credit report within the past six months that a dispute has been settled in your favor. For employment purposes, that right extends for two years.

Follow up with the credit bureau. If the credit bureau determines that the debt has not been settled, then you can arrange with your lender to make payments or a settlement. You may also want to ask the credit bureau to place a statement of your dispute in your file and in future credit reports. That way people who obtain copies of your credit report know that you have addressed the issue.

Considerations

A sample dispute letter is available on the Federal Trade Commission site. Send your letter and supporting documents to the address provided by the credit reporting bureau.

Cautions

Make sure that the information in your credit reports is accurate before applying for a loan, buying insurance, or applying for a job. The dispute process can delay everything else until your situation has been resolved.

Resource

The New York Times: BASIC INSTINCTS; Credit Reports: They’re Free But Flawed


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Bad Credit Auto Loans Advice

January 21st, 2010 by Matthew C. Keegan | 4 Comments | Filed in Autos Express, Consumer Tips, Credit Reports

You have seen the ads: if you have bad credit, we can provide a car loan for you! Unfortunately, if you take them up on their offer you could end up paying a very higher interest rate for your loan, costing you a mint in financing charges.

Before you trade in your old gas guzzler, make sure that your credit is in good shape.

Experian, one of the three credit reporting bureaus, says that a person whose credit score is above 700 “usually suggests good credit management.” They also say that most scores fall between 600 and 750 which means that if your score is below 600 then you pose a greater lending risk. (see Experian.com: What is a Good Credit Score?)

But bad credit does not mean you cannot get a new or used car. What it does say is that if you are patient and work first on improving your financial picture, then you can get an affordable loan to cover the cost of your new ride.

Let’s take a look at some steps you might want to take in a bid to improve your credit score:

Pull your credit reports. Did you know that you are entitled to one free copy annually of your credit reports? AnnualCreditReport.com is a site managed by the three credit reporting bureaus—Trans Union, Experian, and Equifax—where you can obtain copies of your reports.

All three reports contain important consumer information about you including your credit accounts, loan balances, payment history, job and personal information, and other details.

Review your credit reports. Examine your credit reports closely to make sure that the information contained in each is accurate and up to date. Wrong or outdated information can pull down your credit score, perhaps enough to affect what lenders will charge you for your car loan.

Nolo advises consumers to “complete the form the credit bureau provided to dispute entries in your report. List each incorrect or out-of-date item and explain exactly what is wrong.” After thirty days, that information must be removed from your credit reports if in error. (see Nolo.com: How to Clean Up Your Credit Report)

Obtain your credit score. Through AnnualCreditReport.com, you can obtain your credit score too. Unlike your credit report, you will need to pay a fee for this service.

Trans Union and Equifax offer credit scores through this service (Experian requires you to obtain it through their website), so choose just one company and pay that fee. This information will serve as a baseline score going forward, a number you will want to improve as you fix your credit.

Analyze your debt. In addition to reviewing your credit reports for mistakes or outdated information, these reports can give you a good indication of what is holding down your credit score.

You cannot do anything about negative, but correct bad credit information such as defaulting on a loan or filing for bankruptcy. Those events will show up on your credit reports for at least seven years. But if you have made late payments to your creditors, landlord, or utility companies then work toward making your payments on time while also paying more than the minimum balance on your credit cards each month.

Give it time. Certainly, if you want or need a new car right now there is not much to stop you from applying for a loan. But consider this: if you are considered to be a sub-prime borrower, then you could pay two or three times the going rate for your car loan. Better for you if you were to delay your purchase until your score improves.

Work actively to pay down your debt, resist taking out new credit, pay your bills on time and within six to twelve months you can pull your credit reports and obtain your credit score again. By then, your score may have improved enough to where you can get a car loan at a favorable rate.

Considerations

  • When it comes time to get a car loan, shop around. Credit unions generally offer a lower rate than commercial banks.
  • Put more money down. If you have bad credit, then make a larger down payment. If you assume a greater portion of the risk, then lenders may adjust their terms accordingly.
  • The look, feel, and smell of a new car is enticing. However, your car can lose as much as one-third of its value within the first year of ownership. You may do better finding a late model used car whose price reflects its depreciation.

Adv. – If you’re planning to buy a new car, then you’ll want to get price quotes or find a dealer to arrange for a test drive. You may also want to arrange for your own auto financing which can save you hundreds of dollars on your next car loan.


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Get Qualified to Rent a House

January 8th, 2010 by Matthew C. Keegan | 3 Comments | Filed in Consumer Tips

If you are planning to rent a house, your credit report will most likely be pulled by your landlord or property manager to determine whether you pay your bills on time. If your credit report is spotty, containing problems such as bad debt, personal bankruptcy, or a history of late payments, then your application for tenancy could be turned down.

homeQualifying to rent a home means employing certain techniques before you fill out an application for rental, steps which if followed can increase the chances that your application will be approved.

Check your credit – How is your credit? That step is easy to find out and an important one too: creditors as well as employers and landlords want to know if you have established good borrowing and repayment practices, positive traits which give people reason to lend you money, offer you a job, or allow you to rent a home.

Your credit reports can be obtained for free by visiting AnnualCreditReport.com and requesting one copy each of your credit reports from the three credit reporting bureaus. Experian, Trans Union, and Equifax are required by law to give you on demand one free copy of your credit report annually.

Fix your credit – Obtain your credit reports and examine each one to make sure that the information about you is correct. If there are mistakes, follow the credit reporting bureau’s instructions for making corrections. Wait at least thirty days to obtain a follow up free copy of your amended credit report.

Find a home to rent – With your credit report cleaned up, now is the time for you to look for rental property. Once you have found a home that meets your requirements, speak with the property manager or landlord about the home. Discuss monthly payments, deposit money, and other requirements.

Negotiate a better deal if possible, especially if there are a significant number of available rental properties near you. Search Realtor.com to find out how many homes are for rent in your area, checking Craigslist.org for the same. You are in a much better position to obtain favorable lease terms if your credit is good and the number of vacancies is high.

Read your mortgage application carefully and ask questions if you do not understand one or more terms. Find out if garbage collection, water, and heat is included as part of your rent. If not, ask the landlord to provide examples of recent bills so that you will know what these costs will run. Finally, if you have bad credit, but are approved as a tenant, your utility companies may only offer to you service with a large deposit down.

Smart Tips

The landlord or property management agent should disclose to you on your rental application that they will be performing a credit check. You may be charged for this service.

If you are a low income renter, you may qualify for rental assistance through a government program such as HUD’s Section 8 Housing Choice Voucher Program.

Caution

If your credit needs improvement, there are people who can help you with credit repair. However, some of these services are scams; follow FTC guidelines on how you can repair your credit yourself.

Adv. — Have you checked your credit report lately? How about your FICO score?  Employers, landlords, banks, mortgage companies and other lenders base your creditworthiness on a three digit score. Take control — check your credit report today!


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Self Employed? Home Loans For You!

November 2nd, 2009 by Matthew C. Keegan | 1 Comment | Filed in Home Financing

For the self employed, you know one important way to hold down your tax obligations is to find as many deductibles as possible. After all, you work hard — why allow Uncle Sam to take more money from you then “he” should? One way to limit your pay out is to buy a home.

Loan Documentation

fall leavesUnfortunately, one of the more difficult things for you to do is to document your income, something that most lenders required in today’s economic environment. A few years back, lenders would have issued no-documentation mortgages, but those practices died with the mortgage collapse of 2008.

Home loan brokers will want you to substantiate your income in a number of different ways. If you pay yourself, then you can show your last two or three pay stubs as well as W2 forms for the past two years. However, that may not be possible for some self employed people particularly if you take money out of your business as a disbursement, not salary.

Financial Information

If that’s your situation, then you understand that you’ll need to work with a mortgage broker who understands the unique needs of the self employed. Some lenders are fine with less documentation, however they are likely to want you to provide some financial details about yourself including the following:

  • Your checking and savings account statements for at least the last three months.
  • Copies of your federal and state income tax returns for the past two or three years.
  • A copy of your business’s articles of incorporation in addition to business checking account statements.

Don’t worry about being rejected, especially if you have very good credit. Lenders are in the business of lending people money and they can only make money off of you if you borrow from them. Consequently, every loan applicant is treated as a possible client and lenders will bend over backwards to try to find a way for you.

Credit Reports

Keep in mind that your mortgage lender will obtain all three copies of your credit reports and credit scores from Experian, Equifax and Trans Union to help them make their determination. You may be asked to come up with a larger down payment, particularly if your income fluctuates. That doesn’t mean you won’t be approved for a home loan, rather that the lender wants you to assume a greater portion of the risk.

Finally, if you are not getting the satisfaction you expect, try a different mortgage broker. Some brokers are very tight with their lending requirements while others are cautious, but still willing to take a risk on you if you have a track record of very good credit.

Adv. – Mortgage interest rates remain near historic lows.  Whether buying new and refinancing your current home, you’ll want to take advantage of low rates before inflation kicks in. Please stop by PickMyMortgage.com or SayLending.com to find the best home financing options available.


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