National Debt Relief - BBB Accredited Business - Get Relief From Credit Card Debt, Medical Bills And Unsecured Loans

Small Mistakes That Are Costing You A Good Credit History

credit history definitionIf you are confused about your credit score, then the best place to start is to understand your credit history.

Simply put, this is a record of all your credit transactions. Take note that it does not record all your financial transactions. It will only record credit that is under your name. So no matter how much money you have in your bank account, it will not matter in your credit report. All it will really care about are the debts that are piling up and being borrowed under your name.

Although this is not the end all and be all of your financial situation, whatever is on your credit history will have a huge impact on your personal finances. This is why it is very important that you take care of what is placed in this report. You need to make sure that there is adequate information and that it will show how you are responsible with your credit accounts.

Unfortunately, there are statistics that show how illiterate some people are when it comes to their credit report and everything connected to it. According to, the survey done by the American Bankers Association revealed how people are confused about their credit report and credit scores. They think that they are the same.

Well they are not. Your credit history and your credit report can be likened with each other but a credit score is an entirely different concept. Your credit report contains the history of your debts. Whatever is on your history will be the basis when computing for your credit score. This score will determine the financial opportunities and products that you can avail.

It is very important that you educate yourself about your credit report, because any confusion that you may have about it might jeopardize the credit score that will be derived out of it. There are many things that you need to know and let us start with the financial habits that could be ruining your credit history.

These little mistakes may be bringing your credit score down

When something ruins the history stated in your credit report, you can bet that it will affect your credit score. Although the bulk of the information you will get from the Internet involves credit card debt and how it can ruin your credit history, you should know that it goes beyond that. There are so many other causes of your credit downfall. So let us identify the entries that could be viewed as credit report problems. Knowledge of what they are could help you avoid committing these mistakes.

  • Late home rental payments. Although they are not required to submit reports to the major credit bureaus, they are not banned from it. If you are regularly late on your rent, your landlord might report you – that can taint your credit history.
  • Making car rental reservations. When you plan on renting a car, one of the requirements that will be asked of you is your debit or credit card. Either of the two will help guarantee that any damage that you will inflict on the car can be covered. However, you need to know that using any of the two have different effects on your credit history. If you use your debit card, the rental company will be prompted to conduct a credit inquiry on you. The same is not true if you use your credit card. An inquiry on your credit report will have an effect on your score so be careful about this. The best way to go about this is to reserve the vehicle using your credit card and then settle the bill with your debit card.
  • Unpaid medical bills. This is actually not a small mistake but given the frequency of this debt, it deserves to be mentioned. According to, 43 million Americans are currently burdened with delinquent medical bills. This data came from a report released by the Consumer Financial Protection Bureau (CFPB). It revealed that one out of five credit reports are tainted by outstanding balances on medical debt. This type of debt is something that you cannot avoid when you need it the most. But despite that, it can be just as destructive as an unpaid credit card debt. Do not ignore this debt and try to negotiate how you can pay it off.
  • Unreturned library materials. This may come in as a surprise. If you borrow a book or even a DVD from the library and you fail to return it, you will be charged with penalties. Some people know about this penalty but do not think twice about it because it is actually quite small – $0.25 a day. However, if your fine reaches $25, it will be fined further with $7.95. Most people, by the time it reaches this amount would have forgotten about it. But the library will make sure you will not because this is about the same time that they will forward your account to a collections agency. That could end up being a bad mark on your credit history. Think about it. If the lender sees that you cannot even pay a small amount, how do you think they will feel about lending you a bigger loan?
  • Delinquent tax payments. We all know how aggressive the IRS can be when it comes to collecting taxes. You can be sure that even if you run from your tax obligations, the IRS will track you and make you pay. Not to mention the record that they will place on your credit report. It can really take a downward spiral very fast.
  • Unfulfilled gym memberships. When it is time to cut back on expenses, one of the most common suggestions include gym memberships. If you fail to fulfill the terms of this contract, you will just be opening another way for your credit history to be tainted. Just pay off your obligations from this membership contract and cancel it. There are so many ways to stay fit without having to pay anything.
  • Ignored traffic tickets and violations. Whether it is a traffic violation or a parking ticket, these can be a cause for your credit report to receive bad marks too. While it will not be a devastating downfall, it will still reflect a great deal about your credit behavior.

How to rebuild your credit report

A lot of us have gone through financial hell in the past few years and we have our ruined credit reports to show for that. The good news is, this is one problem that you can recover from. Here are some tips that we can give you to help build, or rebuild a good credit history.

  • Choose the type of credit you will use. If your intention is to work on having a good credit history, then you need to use the right credit accounts. One of the accounts that you can use is an affordable secured credit card.
  • Understand the simple rules of good credit behavior. When you start using credit again, you need to implement the right credit behavior. This includes paying on time, paying no less than the minimum requirement, etc.
  • Be selective of how you use your credit. If it is not necessary, then do not buy it using your credit card. Also, make sure that you can afford to pay your dues and able to minimize the interest that you will pay on it.
  • Monitor your credit report every now and then. According to, your credit repair should begin with this. Make sure you get a copy of your credit report and check if there are errors on it. If there are, you need to dispute it. Sometimes, you exhibit the right credit behavior but after becoming a victim of identity theft, you end up with a botched credit history.

Here is a video from the Bank of America to help you with tips on how to build your credit from scratch.

4 Possible Reasons Why You Have A Credit Report Error

magnifying glass on credit reportIf you find a credit report error, you need to act on it fast. The after effects of the Great Recession left a lot of Americans suddenly concerned about the state of their credit. And you really should be. Your credit report holds a lot of weight on your financial life – especially when you are relying on loans to get your ahead on your financial goals. So if you ever find an error in your own report, make sure you know what to do.

According to a report published on, the FTC (Federal trade Commission) revealed that one in every five consumers found an error in their credit reports. That means an estimate of 40 million consumers encountered problems with their reports. 5% or 10 million consumers had severe credit report mistakes that could make them pay more in terms of loan interest rates.

The same report mentioned that consumers found a lot of errors in their credit data. This includes finding an entry that did not belong to them. That could mean identity theft problems. On one side, some people said that they had a more simple credit report error – merely needing an update.

4 ways you can get an error in your credit report

But regardless of the error that you find, you need to correct that. But before you can deal with an error in your credit report, you need to find out what caused it in the first place. There are a couple of reasons to lead your data to be ruined – one more severe than the other.

Here are 4 reasons why you have a credit report error.

  • Your own mistake. We are all bound to make mistakes – even when it comes to our own information. This is why you have to be very careful about how you will fill out application forms for credit accounts or any loan that you want to make. Sometimes, there are cases when you need to write on the form by hand. If your handwriting is all over the place, whoever will encode your data might make a mistake. So make sure that if you are filing out something or providing your information, you double check what you are placing. Because that may end up as a serious error in your credit report. Try to be consistent in the information that you will provide. If it is your mistake, then you may want to call the financial institution that you submitted the information to so you can correct the mistake. You may have to call the credit bureau too so you can update your information.
  • The bank, lender, creditor, or similar entities’ mistake. These are the mistakes that are sent by the people you provided information to. These are the ones that submit the information to the credit bureaus. If it was not yours, then you may want to check out if the bank or the entity that submitted your information made a mistake. In the event that they are responsible for the credit report error, it might be harder for you to track if they did correct the mistake or not. Sometimes, you may have to go through the investigation to prove that they did make the mistake or not – at least, that depends on the institution. In any case, make sure that you follow up your case until the mistake in your credit report is edited. There are also cases wherein you are in the midst of a dispute and the creditor or utility company marked it off as a late payment or something. You may want to resolve this so your records can be corrected.
  • The credit bureau’s mistake. If you find a credit report error and you are sure that you did not make a mistake and the same is true for the bank, then it is probably the fault of the credit bureau that is collecting your data. These bureaus collect millions of data and despite a sophisticated database, they are bound to make mistakes too. They can mix the files or misreport your information. The repercussions of these errors could be severe – so make sure you dispute the mistake as soon as possible. At any case, their process is not fail-safe so always be on your guard.
  • The case of identity theft. If none of the other three checks out, then you may be a victim of identity theft. This is when someone else takes your personal and financial information to buy things and make you pay for it. In other words – they will steal from you. According to an article from, there were 13.1 million cases of identity theft reported in 2013. In fact, they claimed that one American falls victim every two seconds. The thing about this is, only you can spot this credit report error. As long as it is done under your name, the credit bureau will put it in your report. But if you send them a letter to dispute an entry, that is the only time they will investigate. If you do not file a dispute, then the record will stay on your report and the crime will go unpunished.

The key to correct an error in your credit report is to know about it first. If you are not aggressive in your credit monitoring, these mistakes will not be corrected. No matter how careful you are with your money, a tarnished credit report can haunt you and keep you from pursuing your financial goals.

Problems that could arise when your credit report has errors

If you have a credit report error, you could be facing a couple of problems. Here are some of the things that you could encounter.

  • Wrong credit score. According to, people only bother to check their credit score when they are about to buy a home. If you do have an error in your credit report that you did not correct, you might find that it is enough to ruin your chances of getting your dream home. That wrong entry in your report may be responsible for you having a low credit score. We all know that a low score could mean the disapproval of your loan. If you are approved of the loan, you may be asked to pay a higher interest on it. Not only that, insurance companies can also ask you to pay higher premiums. These look into your credit score so make sure you keep it high by correcting any error that you see on your report.
  • Paying for debts you do not owe. In case your credit report error is caused by identity theft, you might find yourself paying for an account that you never borrowed. This is especially true if it took you a long time to discover the theft. The longer it takes for you to report an error, the harder it will be to prove that you did not open that credit account. Debt effects can be very devastating – much more if it was a debt you never got in the first place.
  • Missing out on opportunities. A credit report error can also make you miss out on a lot of financial opportunities. For instance, employers usually look at your credit report before hiring you. Potential business partners also look at this data to determine how well you manage your finances. A bad credit history could bring your reputation down.

In the end, that one credit report error could end up leading you to a lot of financial problems in the future. Make sure that you monitor your credit report regularly and dispute any incorrect information that you find – and do it immediately.

Wake Up, People! You Absolutely Must Know These Things About Your Credit Score

Video thumbnail for youtube video 6 Tips For Simplifying Your Financial LifeA study done in 2013 revealed some amazing facts about how ignorant many Americans are regarding their credit scores and credit reports. For example, 2/5ths of those surveyed did not know that credit card companies and mortgage lenders use credit scores to determine their eligibility for credit. Another 2/5ths incorrectly believed that personal characteristics such as marital status and age are used to calculate credit scores. Between 25% and 33% did not know when it is that lenders must inform borrowers of the credit scores used in their lending decisions. More than 25% do not know how to raise or maintain their scores. And 36% incorrectly believed that credit repair agencies are usually or always helpful in improving credit scores and correcting errors in credit reports.

Wake up, people!

If you don’t understand credit scoring and credit reports you could be facing big trouble. If you’re not aware of this, you definitely need a good credit score to qualify for an auto loan, a mortgage and other financing. And if you make just one misstep such as forgetting to pay a credit card bill, you could be on the slippery slope to serious credit problems.

Do you know who compiles your credit reports?

Your credit reports are compiled by the three major credit bureaus – Experian, Equifax and TransUnion. The information they use comes from banks and the financial institutions with which you do business and includes every credit contract you’ve ever had related to debt. Debt collectors even report to the credit bureaus. So if you have an old unpaid medical bill, this could pop up on your report and damage your credit score.

In addition, the three credit bureaus collect information from public records on tax liens, court judgments and bankruptcies. Any time you apply for any type of credit (called a credit inquiry), this will be reported to the three credit bureaus. In turn, the credit bureaus provide your credit report to the lenders when you apply for new credit.

Banks and credit card companies aren’t the only ones that access your credit reports either. Cell phone providers, landlords, insurers and utility companies will also ask for a credit report in determining whether or not they want to deal with you.

What about employers?

According to the Fair Credit Reporting Act, employers can check your credit reports but they have to get your permission to do this. Of course, if you’ve applied for that dream job and your prospective employer has asked to check your credit reports, you’ll probably feel pressured to say yes. If you say no this would be as good as saying that you have poor or bad credit. And under no circumstances are employers or prospective employers permitted to check your credit score.

The inverse ratio

There is an inverse ratio to credit scores. The higher your score the lower the interest rate you will be charged on an auto loan, a personal loan, credit card, and a mortgage. Even your auto insurance will cost less if you have a high score. Conversely, the lower the score, the higher your interest rates will be.

One freebie a year

You can get a free copy of your credit reports once a year. This is a perk that was legislated by Congress a few years ago. There is a website,, where you can get all three of your credit reports either simultaneously or one at a time. Alternately, you can get your credit report free from each of the “big three” credit bureaus. You should get these reports and review them carefully to make sure they do not contain errors. If you do find an error in one of your reports you need to immediately dispute it with the appropriate credit bureau. What some people do is get their report from one of the credit bureaus every three months, which is a way to monitor their credit and immediately spot any fraud.

Man climbing range of credit scoresThey won’t include your credit score

Your credit reports will contain a lot of information but they won’t include your credit score. While there are a lot of different credit scores floating around the most important one is your FICO score as this is the score that most lenders use in determining whether or not to extend you credit. You can only get your FICO on the website

Where else to get your credit score

Getting your credit score used to be a fairly big job. But it’s becoming much easier. You can get your score free on websites such as and and from the three credit reporting bureaus. These won’t be your true FICO score but should be close enough to give you a good idea of how you stack up. Whatever your number is, don’t fixate on it. The important thing is to understand how you stand in the range being used. FICO scores range from 300 to 850. This means that a score of 800 would put you in the range of very good or excellent credit. However, the VantageScore, which was developed by the three credit reporting bureaus, has a range of 501 to 990. It also assigns a letter grade to scores. If you were to have a VantageScore of 800 you would be ranked as C or Prime, which wouldn’t be as good as an 800 FICO score.

It’s becoming easier

If you have a Discover card you’re probably seeing your credit score every month on your statement. The credit card companies, 1st Bankcard and U.S. Bankcard have said that they will soon be sharing FICO credit scores and related information with their customers. This is in response to the US Consumer Financial Protection Bureau (CFPB), which has been urging the credit card companies to do this because it believes the more information a consumer has, the better a job he or she will do in managing their credit. While this has not yet proven to be true, it certainly can’t hurt for people to be able to see their credit scores every month and whether they’re getting better or worse.

How your score is calculated

No, your age, marital status, number of children or any other personal information is not used in calculating your credit score. It is based on six factors: Your payment history, debts owed, length of credit history, amount of available credit, types of credit and your credit inquiries.

If when you get your credit score you find that it’s either poor or bad there’s nothing you can do about your payment history. History is, after all, history. You also can’t do anything about your length of credit history. However, there is one factor you could get to work on – which is your debt-to-credit ratio. It’s calculated by dividing your debts owed by the amount of available credit you have. For example, if you have available credit in the amount of $10,000 and $5000 in debts owed, your debt-to-credit ratio would be 50%. Since this accounts for 30% of your FICO score this is an area where you could do something to affect it positively. The two alternatives are to either pay off some of your debts or ask one or more of your creditors to increase your credit limits. Do either one of these and you would lower your debt-to-credit ratio and this should have a positive effect on your credit score. If you’d like more tips for improving your credit score, watch this short video courtesy of National Debt Relief.

The net/net

What all this boils down to is that your credit score pretty much rules your credit life. And since your credit score is based on your credit reports – or how well you’ve used credit – the best policy is to always use it sensibly.

4 Things to Know Before Remarrying in Retirement

Happy old couple looking at a cameraRetirement can come sooner than most of us expected. After a few decades working in an office, the time will come that we will retire that suit and probably trade them in for gardening clothes. Some are excited just thinking about retirement. They are already preparing a long list of things to do immediately right after retiring. But for some, they are anxious about retirement. Getting used to 40 hours a week minimum in the office seems an awful lot of free time.

Retirement also brings a good question in second marriage. As retirees try to prevent retirement funds from retiring before them, marriage is another issue. Divorce or death of a spouse is inevitable and for retirees, this is just as a reality as most for most of their younger counterparts. But their age and situation in life makes it just a little more complicated than most. Having a new partner in life can be quite a challenge after the initial feelings settle down.

Divorce is all too common in the country. Survey from shows that 3.4 out of 1,000 gets divorced. This may seem small but multiply that with the current population and you get a lot of people leaving marriage. Retirees are not an exception whether leaving the marriage because it is not working anymore or the other partner dies. But some find another partner to spend their retirement with and this is where it gets tricky especially when it comes to finances.

Finding love the second time around in retirement

Finding love or companionship for retirees can and does happen. Love is not only for young people. Older citizens can love just the same as their younger counterparts, if not more. But talking about retirement and marriage should always include the topic on financial management. Money and finances should be talked about before tying the knot again in retirement. came out with an article about retirees finding love again and in the midst of pension, remarry. There are a few complications in marriage with retired people because of children, stepchildren, assets, credit, debt and other things that may not have been present during the first marriage.

Here are some things the retirees need to look out for before walking down the aisle again.

Discuss finances

Soon to be re-married couples talk about a million things before they tie the knot and one important topic is finances. More than knowing each others favorite food and places to travel to and if they will get a dog or a cat, sitting down and talking about finances is important to make the marriage work. It has a few more challenges because of the state in life the partners are in.

It now includes pension, savings and emergency funds. It could also include investments outside savings that needs to be talked about. Having a transparent line of communication and making sure the other is updated and in the same page as you are with the finances is important to make the new marriage works.

Expenses should be part of the discussion as well. If there are debts still being paid, bills and other utilities and other living expenses should be properly discussed to make the relationship work. It will be quite hard to live a normal day to day life when you do not even know who will pick up the bill for the cable, groceries or book that ticket for that vacation in Hawaii.

Credit reports

Credit reports is a reflection of how well you manage your finances. It shows a quick picture of your payment habits with just a number. It can say a lot of things about you as a borrower and reflects your level of financial literacy as well. Credit reports are important as well in maximizing other loan and credit opportunities that you might need in the future.

This is another topic that should be discussed before remarrying at retirement age. Check your credit score and talk about it with your soon to be spouse. If you find any errors, report them right away so you can fix your credit report. Talk about the financial struggles you had along the way and try to learn from them as a new couple. You can even talk about how you saved for retirement in spite of debt.

Important documents

There are documents that you might have prepared a long time ago that you would need to update when you remarry. Changing beneficiaries in your will and other documents is one them. It is best to talk to your lawyer about the changes needed with your new marriage and how to go about updating the information on legal documents you have.

Pre-nuptial agreement

A lot of people look at pre-nup agreements as a protection for the wealthier spouse. It is meant to separate the finances of the two prior to entering marriage. There are advantages to having a pre-nup at retirement age and it is best to talk about it with your soon to be spouse if you are both comfortable with it. Look at it as doing it for the kids, if any, because it could be the spark of nasty discussions down the road.

Here is a video about remarrying after retirement:

Marriage after retirement

Just as you are thinking of work ideas during retirement, you should also be working on some possible problem areas retirement brings to marriage. Here are a few of them.

  • Unemployment brings low self esteem. Some people have put too much premium in their work that retirement decreases their self-esteem thinking they are not doing anything worthwhile. They feel a big empty space has carved up into their lives and there is nothing they can do about it.
  • Health. Retired people are usually more prone to health related issues because of old age. There are more complications for older people and treatment might be longer and more expensive.
  • Lifestyle. Two people coming into a retirement status and having to find themselves together for 24 hours a day for 7 days a week are finding it challenging to merge their lifestyles together. Over the years, each partner has built up a routine around specific interests. The problem is that these interests might not be the same or even compatible with their partner.

In light of these problems surrounding a married couple in retirement, here are a few things that they can do to address them:

  • Find a hobby – Retirement should be based on a financial target and not by age. If done correctly, the  lack of self esteem may originate from not having to do anything anymore and not the paycheck. The best thing to do is to either look for a hobby that you can enjoy doing or better yet, expand a hobby you already have. It is best to include you partner into it and see if you both can enjoy incorporating it in your retirement years.
  • Regular check-up. Prevention is always better than cure. Visit your doctor regularly most especially when you get older. This is not only to address any possible medical situation that is creeping up but to give you peace of mind as well.
  • Thinking of your spouse. Building a lifestyle outside the interests of your spouse might have happened because of all the time away from the house and into work, Now that you are retired, it is a good idea to create a new one that factors in both of your interests. Take into account the the things that both of you like to do and build on that. She might love to cook and you’re the best salesman in the neighborhood. You can start a small business where your wife cooks and you sell them to your neighbors. It does not have to be the same, they can also be complementing each others interests and strengths.

Retirement is an exciting part of your life. If you find yourself re-marrying at this point, your finances should be one important consideration and topic before saying “I dos.”


5 Credit Score Misconceptions Of Newlyweds

couple arguingAdmittedly, a lot of people are confused about their credit score. Even as experts explain how important it is to have a good one, they continue to be baffled by a lot of concepts about this number. You cannot leave it in that situation because failure to clarify things can cost you.

In most cases, we understand what a credit rating is and how it is computed. We know that it involves our payment history, amount of debt, credit age, new accounts and type of accounts. We also know that it needs to be high. However, the one area that confuses us is the effects of a good or bad credit score in our life in general. There are so many misconceptions about it and you need to know which is which.

5 credit score myths that married couples have

Among the credit score myths, there are plenty that revolve around its effect on one’s marriage. A lot of people have varying ideas about how credit scores affect their relationships. To help clear things up for you, here are 5 popular misconceptions about credit scores.

Myth 1: You merge your credit score with your spouse.

If you think that after saying “I do,” the three major credit bureaus will combine your reports – that is where you are mistaken. You will be combining your finances but that will up to the extent that you will agree on. And regardless if you have a joint account or purchases, that does not mean you will have one credit score. Your scores will continue to be separate but any joint accounts that you have from hereon can affect that.

Myth 2: Your spouse’s past credit can affect your own.

If the bad financial behavior of your spouse is evident in an old debt account, then you do not have to worry about that. It cannot affect your own credit. According to only a joint account can affect your credit score – because it is already shared with your name. As long as you keep it separate, the past financial behavior of your spouse should not be a threat to you. But if you start to take on debt together, then they would be a problem in case your spouse fails to pay it back. That means you need to be careful of joint accounts and debts. It is common to have the joint arrangement but you need to monitor just how much the two of you can really afford. If it is beyond what you can have, then make sure that you discuss it amongst yourselves before you commit.

The only time that a debt will also be your responsibility is when you live in a community property state. These are the places wherein all debts and assets acquired during the marriage will be the responsibility of the couple – regardless if they had something to do with the debt or not.

Myth 3: Making your spouse an authorized user of your card will make them responsible for the debt.

It may seem logical that everyone using your credit card should be held accountable for the debt they will incur on it. That is not entirely true. If you are the principal cardholder and you give your spouse authority to use the card for purchases, paying it off will be your sole responsibility. It is not like co-signing loans. Be careful about any credit cards that you will give your spouse that is under your name. This is when their bad behavior will directly affect your own credit score. In case you want to remove them as the user, you simply have to call the creditor and have it removed. Again, you need to take into consideration the community property law. If you live in one, then you should know that they will be responsible for the debt even if they are only authorized users.

Myth 4: Divorce will erase the bad effects of your spouse’s credit behavior.

No matter what the court might say, any debt that involves both of your names will continue to be your responsibility until it is paid off. An article from mentioned that divorce itself will not have a direct effect on your credit report. However, any bad behavior that you may have towards debts that you owe jointly can affect it. For instance, let us assume that the court rules that you and your ex should split paying off the debt. Even if you live up to your end of the bargain, the inability of your ex to pay their share will affect your score.

Myth 5: You cannot get new credit because of your spouse’s bad record.

This is not true as long as your credit score is good and you are applying only for yourself. If you are applying jointly, then that is a different case. The bad credit score of your spouse can affect the application. But if you do not have to put both of your names down, then new credit should not be a problem for you.

It helps to educate yourself about the real effects of your credit score in your marriage so you can make smarter choices about your finances. Take note that while the financial behavior of your spouse is important in your relationship, it does not have to be the cause of your demise. Of course, you need to make sure that both of you are willing to work hard to protect your marriage from the devastating effects of a credit problem.

How to protect your credit report from your spouse’s bad credit behavior

It is true that we do not choose who we fall in love with and that money will not be something that we are concerned about during the first few months of the relationship. But the reality is, you need to take time to get to know them on a financial level because it can affect your future together.

In a study done and published on, it is revealed that credit compatibility can help predict if a marriage will be successful or not. The survey done by the website indicated that 51% of married couples have the same credit score as their spouse. Only 26% of divorced couples have the same situation, the rest can be assumed does not have the same credit score.

It is important to know that those who are still married made it a habit to manage their money together. Only 34% of divorced couples admitted that they did the same when they were still married to their ex.

The bottom line is, you could get hurt by a bad credit score so make sure that if you have a good one and your spouse does not, you need to help them correct it. This is one of the joint efforts that you have to do in order to save your finances and your marriage too.

Here are tips on how you can deal with bad credit scores in your relationship.

  • Make a commitment to improve your spouse’s credit report. Make sure that this is something that both of you are willing to go through.
  • Delay joint purchases for now. This is for your own protection. You want to correct the bad habits of your spouse before you make joint purchases. If you need to buy stuff, it might be a good idea to make individual purchases for now.
  • Promise to be honest with your credit. It takes more for the spouse with the bad credit o make this promise but you need to keep the trust intact. Financial infidelity can also destroy your marriage because it can ruin the trust between you. Do not let this happen in your marriage.
  • Do not co-sign a loan. Even if you love your spouse, try not to co-sign loans for them. This is never a good idea even if you are married to them.

Tackling debt as a couple can help strengthen your relationship. This is the only way that you can protect your marriage from being destroyed by irresponsible financial behavior. Be supportive of your spouse and try not to be too demeaning about it. Their gain is also your own so do not put them down because of past mistakes.

5 Steps To Make A Credit Check Work In Your Favor

woman looking at files and frustratedAre you planning to buy a home this year? Or maybe buy a car? Whatever it is that you want to purchase requires you to be concerned about your credit report, as long as it will involve a loan application.

Before a lender approves of your loan application, you need to go through a credit check. This is when they look at your credit report to compute your credit score. The whole purpose is to know if you are credit worthy or not. For instance, according to the latest mortgage law provisions published on, one of the financial information that lenders should look into is the credit history of the borrower. This is to filter out the borrowers who has a high probability of not paying back their mortgage loan.

The credit check will help lenders determine if you can be trusted with a loan. In case you have a not so favorable credit report, that does not necessarily mean you will be disapproved immediately. The lender will try to protect themselves by imposing a high interest on your loan. While that will still get you the finances you applied for, it will cost you more money because of the interest.

5 steps to make credit inquiries work to your advantage

In case you applied for a loan or a new credit account, you may want to make sure that you will pass the credit inquiry that you will be subjected to. This way, you can make assumptions as to whether you will be approved of the loan or not.

So before they conduct a credit check on you, make sure you go through these 5 steps.

Step 1: Check your own credit report. The major credit bureaus will ask you to pay for a copy of your credit report but they are also mandated to give you one free copy every year. If you want to access them, you can go to to download your free copy. Ideally, you want to do this a few months before you actually file your loan application. That way, you can read your credit report before the lender get access to it.

Step 2: See if there are errors and file a dispute against it. This is the reason why you want to get your report a few months before your application. In case there are errors, you can have it disputed so the credit bureaus can change it. A study done by the Federal Trade Commission revealed that one out of five consumers have reported that they found errors in their credit report. According to the study shown on the, this could have led them to pay more on loans due to a higher interest rate. In case you find out that you need to dispute an entry on your report, you should send a letter to the credit bureau involved. Send a copy of the document proving that the entry is wrong too. Once sent, you have to wait for them to respond, investigate and take action. That action may be to prove that their records are correct or to revise your report as per your data. If you are proven to be correct, they should send you a free copy of your credit report that contains the right information.

Step 3: Calculate your credit score. The second step is to check your credit score. You may want to calculate it to know how you will fare in your loan application. This is the grading system that will allow the lender to determine your interest rate. If it is high, then you are considered to be a low risk borrower. That will keep your interest rate low because your lenders will not feel the need to protect themselves from the possibility of you failing to pay for your debts. Your score will help you determine how much you need to improve to get the rate that is most affordable to you.

Step 4: Send bigger payments towards your debts. The next part of your credit check is to pay off your debts significantly. If you followed our suggestion to check your report a few months before the loan application, you should have some time to make significant contributions towards your debts. Timely payments and a lower debt balance will help improve your credit report so it looks more appealing to lenders.

Step 5: Make sure there are no unauthorized charges or new accounts/inquiries. Since you are already holding your credit report, you may want to double check for any unauthorized or suspicious entries that could show that you are a victim of identity theft. You want to report this as soon as possible to keep them from stealing your money.

By doing your own credit check before the lender, you are giving yourself the chance to improve your credit score. That is a great way for you to prepare for your upcoming loan.

Who checks your credit report

Apart from lenders, there are also other people or organizations who are interested in your credit report. This is why credit scores have become king. If you will be transacting with any of them, you may want to conduct a credit check on yourself too.

  • Creditors. If you will open a new credit card account, these companies will check your credit report before approving your application.

  • Landlords/property owners. If you will be leasing a home or any property, the owner or landlord will naturally want to know your payment behavior. That will tell them how well you can be expected to pay them rent every month.

  • Insurance companies. This also involves a regular payment scheme so it is but natural for them to want to check out your payment behavior. In case your credit score is low, you can expect that they will give you higher premiums.

  • Utility companies. They will also do a credit check on you to see how well you will pay. Most of the time, this check is done in order for them to determine if deposit is needed from you or not. If your credit report is unfavorable, then you can expect to be asked to put down a deposit.

  • Collection agencies. This is simply to determine if you are financially hard-up as you claimed you are.

  • Employers. Although you are not paying your employer, the credit report will say a lot about your character. It will help them assume how responsible, organized and disciplined you are when it comes to your finances.

  • Government agencies. They require this from you in case you are asking for some assistance – especially when it comes to finances. It is usually to check your eligibility. Sometimes, it is reviewed for national security purposes.

  • Court. These include judgement creditors or bankruptcy courts. They use this as part of the documents to help decide on your case – or to see if creditors or collectors should start collecting from you.

Anyone who has a court order to get your credit report can also acquire it. Apart from that, no one can access your report.

When is the best time to look at your credit report

Apart from borrowing money, there are also other instances wherein you have to do a credit check on yourself. What you don’t know about your credit score can hurt you so it pays to take a look at it every now and then. Here are the instances when you have to look at your credit report.

  • Three times a year. This is your regular check ups to look for errors or any unauthorized activity on your report. You don’t really have to pay for anything because you get one free report from each of the major credit bureaus (TransUnion, Equifax, Experian) every year. You can download it from the Annual Credit Report website.

  • After a credit disapproval. When you are declined of any application, you may want to view your report to see why you are not approved. That way, you can ask them to reconsider in case the reason for the disapproval is wrong.

  • Possible identity theft. You also want to check it if your credit card or information is stolen and you think you are in danger of identity theft. This is your way to monitor if they are using your details already.

  • Credit repair. You also want to check your report, obviously, if you want to improve your credit score. You need to look at your current situation to figure out the improvement that needs to be made.

In case you find out that your credit score is low, here is a video from National Debt Relief that will reveal the fastest way you can increase your score.

Think You Have Good Credit? Know The 8 Credit Score Ranges To Be Sure

checklistAre you confused about your credit score? Well you are not alone. A lot of Americans are actually having a hard time understanding this score. In fact, based on a news release from, ⅖ of consumers are unaware that mortgage lenders and credit card issuers refer to this number before making decisions. At least, ⅖ of the respondents of the survey initiated by VantageScore Solutions and the Consumer Federation of America. The same number of respondents also think that age and marital status are factors to consider when calculating their credit score.

Obviously, there is a need to teach consumers about this financial topic and why don’t we start with the different credit score ranges? Now you may be wondering, why are we concentrating on this? Why not something about how it is computed?

It is simple. You want to know about the various ranges of credit scores because they come from different companies. Each of them use varying computations. If you want to know if you have a high score or not, you have to understand where it will be coming from.

What are the 8 ranges of credit score

First of all, you may be wondering, why do we have so many credit score ranges anyway? According to the explanation from, it all began with just one – the FICO score. It is the reason why this remains to be the most popular model for computing credit scores. The FICO score was developed by Fair Isaacs Company back in the 1970’s to standardize the credit decisions done in the financial industry. Over the years, other credit score companies adapted the original algorithm from the FICO model and created their own by improving it as they see fit. The main runners in these improvements and credit score variations come from the three major credit bureaus – TransUnion, Experian and Equifax.

So what are the popular credit score ranges that you need to know about? Make sure to familiarize yourself with these because what you don’t know about your credit score can hurt you.

Fico Classic Score (300 to 850)

This score is developed by the Fair Isaac Company. This is one of the three type of scores that can be availed from this company. The higher the score is, the better it will be for the consumer. This is usually availed by lenders from the three credit bureaus while consumers typically go directly to Fair Isaac. This is the most popular range there is – even with other companies. It is typically used by credit card companies, lenders (auto, mortgage and student loans), banks, insurance companies, credit unions and other financial companies.

FICO Industry Option Score (250 to 925)

Obviously, this is another score coming from the Fair Isaac Corporation. Just like the Classic, this score is also sold to lender through the three major credit bureaus. However, this is not available to be directly availed by consumers. Those who get this score are usually the auto lenders and creditors from credit card companies – although there are lenders who avail of this too.

Fico NextGen Score (150 to 950)

This is the last of the three credit score ranges that is provided by the Fair Isaac Corporation. Just like the Industry Option, this is available to lenders through the 3 credit report agencies (credit bureaus) but it is not available to consumers directly. The primary user of this are credit card companies but other lenders can also look at this score.

VantageScore (1.0 and 2.0: 501 to 990) and (3.0: 300 to 850)

This was the old version of the VantageScore that is provided by VantageScore Solutions. The three credit bureaus actually invested in this because they wanted an alternative to the FICO Score. This score has an unusual range and according to the company, it required lenders and creditors to change some of their rules. That is the main reason why a lot of them opted not to use it. In fact, only 10% use this for their lending decisions. The 3.0 is the new version of the VantageScore that was only recently released in 2013. Lenders get their credit scores from the three credit bureaus but only Equifax and TransUnion make it available to consumers. Most financial institutions use this already when making their lending decisions.

TransUnion Risk Model (300 to 850)

This used to be known as TransRisk. Obviously, this was developed by TransUnion and unlike the previous credit score ranges, this is only available through this company. Consumers can avail of this score through other sites as long as they are owned or affiliated with TransUnion. The main clients of this score are credit companies, debt collection agencies, auto lenders, insurance companies and most large banks.

PLUS Score (330 to 830)

Experian developed this score and surprisingly, this is not made available to lenders. The main clients of this credit score are the consumers themselves. The main purpose of this score is to educate consumers and help them improve their scores. They can avail of this score through websites owned or affiliated with Experian.

Experian National Equivalency Score (360 to 840)

This is another score that is developed by Experian and it can be availed by lenders through them alone. For consumers, they can avail of this credit score but only through the Credit Sesame website – for free. Most financial lending and credit institutions avail of this but they are also joined by lawyers, property management companies and even the federal government.

Equifax Credit Score (280 to 850)

As the name carries it, Equifax developed this credit score and lenders can avail of this with them. It is also available to consumers through Equifax too. The company is secretive as to who uses it but it can be assumed that financial institutions use it for variety.

Regardless of the company computing your credit score, it is important to note that all of them refer to the same source – your credit report.

What does a high credit score mean?

When you are trying to buy a home and you have a low credit score, you know that it will cost you a low interest rate. So the main purpose of knowing all of these data is to eventually improve and maintain a high credit score.

But what exactly does a high score mean?

Based on the infographic from, the FICO score of 680 and above is a good score. It will allow consumers to get a 4.2% on a housing loan. In fact, the median score in the US is right 723 – a bit above this range. If the score of the consumer is 740 and above, that is considered as excellent. It can land them a 3.9% on their mortgage rate. The lowest range of score at 300 to 550 means the consumer will get a 9.5% on their home loan.

Obviously, with the varying credit score ranges, you know that the “high” requirement will vary among them. For instance, the 800 score of PLUS Score may not be good enough for a FICO NextGen Score – since their ceiling is until 950. You have to consider where your score is being taken from so you can understand how you can improve it.

So before you can really start working on your credit score, know the company that computed it so you will know where it falls under the credit score range it is taken from.

Tips To Help Increase Your Credit Score Without Using A Credit Card

woman looking at documentsA lot of people are asking: will opening more credit cards improve my credit score? This is actually a good question. Some people are convinced that this is the only way that you can start building up your credit score.

Here’s the thing. Your credit score is dependent on your credit report. This report holds details about any debt that you have. So if you have not taken any debt yet, then what information can you place on your report? And here’s where it gets more complicated: you need a credit score to be able to take on any debt. Given all of these requirements, how can you hope to build up your credit score?

This is where credit cards are “supposedly” there to help out. However, this is something that people are hesitating. After all, credit card debt put a lot of people under some serious financial trouble. A lot of our youth witnessed how it made the life of their parents and grandparents difficult. They do not want to follow the same footsteps.

Different ways to build your credit ranking without needing a card

Well if you do not want to follow their credit card mistakes, then you don’t have to. You are probably thinking about the next question by now: how will you build up your credit score if you cannot get any type of debt?

Here’s an important truth that you need to know: there are options to get a loan without the need for a credit score. It is limited, but there are other options. Let us list them down for you.

  • Get a federal student loan. If you are young and you are still in school, you may want to start working on your credit score by taking on a student loan. The approval of this loan does not really depend on your credit score. These do not require a credit check. Of course, for it to help you improve your credit standing means you have to know how to deal with student loan debt. That basically means knowing how to pay it back properly. Try not to be late, pay as much as you can – these are the usual tips that you will get so your student loan can help you build up a high score.

  • Try to apply for an installment loan. Sometimes, retailers will allow you to purchase a product and pay for it in installment. The great thing about this option is you are expected to pay for it over a long period of time. That will help you build up your credit score without making the payment too much of a burden. The important thing that creditors and lenders are looking for in your score is how well you can be trusted to pay back what they will allow you to borrow. That is the core purpose of this financial measurement. If you do good in this loan, then you can expect to have a good credit score.

  • Loan money from a credit union. First and foremost, this will require you to be a member. Look for a credit union that you can qualify to join and open an account with them. They operate in the same way as a bank – but instead of being governed by a board of directors, it is managed by the members themselves (more specifically appointed members). When you are finally a member, you can opt to get a small loan to help you work on your credit report. Based on the September 2013 data released by the Credit Union National Association through their site, credit unions have loaned an amount worth $642 billion. They have an asset worth $1.06 trillion. This proves that they are capable of loaning you money. If they decline because you do not have any background on debt, you can opt to get a secured loan. That means your loan is backed by the money in your account. They should be able to give you approval then.

  • Look into peer to peer loans. These are companies that operate online and connect you to private individuals who are willing to lend you money. No bank or financial institution is involved here. Also known as social lending, this is a great option for you to get the loan that will help you build up your score. Since it operated online, the overhead costs will not be as high for the companies managing them. That means they are not compelled to get a high interest rate from you. Although they look into your credit score, it will not cost you a very high score.

  • Request existing companies to file on your credit report. If you have rent, utilities and even phone bills that are recurring every month, you can ask them to file a credit report on your behalf. They are allowed to do so but it will be more of a favor for you than out of obligation. That should help boost your credit score. At least, it will if you had never been late on your payments.

These are some of the options that you have. There are other choices but we do not really recommend them – or we haven’t heard about them yet.

If you really want to use a card to improve your credit report…

In case some of these are not appealing to you, that is alright. You can still use credit cards to help you arrive at the high credit score that you are aiming for. Just make sure you will not commit the biggest credit mistake that you can ever make – and that is to bury yourself in credit card debt.

Just remember that the actual credit card ownership is not how you will get a good score. It is your attitude towards it. You have to know how you will use these cards so you can be viewed as a creditworthy consumer. Here are some tips that we have for you to help ensure that being a cardholder will really benefit your credit report.

Pay your dues on time. The most important thing that you can do to help your credit score go up is to avoid late payments. According to the information provided in, late payments can affect your score based on how recent, severe or frequent you do them. Basically, they are saying that a recent late payment can put more damage in your score than a frequent late payments in the past. So try not to be late if you really want to boost your score.

Budget every credit card use. To help you avoid late payments, one tip that we have for you is to include your credit card use in your budget plan. That means allocating an amount that you can afford. You have to plan how much you can charge on your card to avoid overusing it. Also, it will help you put aside the money that will allow you to pay for your full balance at the end of every month.

Know how to use your card properly. Lastly, you have to educate yourself on how you can use your credit card properly. That means you have to understand what the interest is and how it can affect the finance charges on your balance. You have to know how the finance charge, late payment fees and other charges can grow your debt significantly. Also, you have to understand how the grace period can keep you from credit card debt.

Understand that credit cards are quite harmless if you know how to use it properly. You can own it, use to have a high credit score and still end up with zero balance every month. It is not about the debt itself that will build up your credit score. It is how you pay for it.

Consumers Are In Need Of Credit Score Education

woman looking at a documentAre you confused about your credit score? If you are, then you may want to pay attention to this article because we will try to give you some of the basic credit score education that you need.

A consumer’s credit score is taken from their credit report. This report holds vital information about you. It shows a list of your credit accounts plus any good and bad behavior that you have displayed. In fact, that is the whole purpose of your score. It says a lot about your credit behavior. It is a number that represents your debt situation and how you rank at managing it. Simply put, when you are in a bad financial situation, chances are, you have a low credit score.

People usually encounter this score when they are trying to apply for a new credit account. Lenders and credit card companies will always check if a consumer is a responsible credit holder. Anyone who will let you borrow their money will naturally be interested in how you will pay it back. It does not matter if you have the income to pay your dues. Some people borrow money and forgets about it. This is something that lenders and creditors want to avoid.

Apart from loans and new credit accounts, employers will also look at your credit score before hiring you. Utility companies and even landlords can use this information to check out your credit behavior. These inquiries about you makes credit score education all the more important.

Study shows a lot of consumers do not understand credit scores

Unfortunately, everyone may know about credit scores but not all of them fully understand it. An article recently published by discussed a survey done by VantageScore – one of the providers of credit score information. Apparently, lenders follow the Dodd-Frank Act by providing consumers with a disclosure notice to explain a credit application disapproval, but most consumers do not understand it. These reasons could include a current delinquent account or too many credit inquiries, but consumers have no idea what all of these mean so they fail to take the steps to help improve their score.

VantageScore surveyed 200 lenders and it revealed an increasing need for credit score education. The highlights of the survey as mentioned in the article includes the following:

  • 75% of lender participants are concerned that their clients do not understand what is written in disclosure notices.

  • 10% of lenders think their customers understand the disclosure notice “reason codes.”

  • 10% of lenders do not have a Spanish translation for their disclosure notice.

  • 38% of lenders are willing to help provide applicants with tips to help improve their credit score.

  • 33% of lender believe that a clearer and simple language will help make disclosure notices more understandable.

A separate survey, that is a joint effort of VantageScore Solutions and the Consumer Federation of America (CFA), revealed that a lot of consumers know very little about credit scores. The survey results as published on the and it showed the following information:

  • ⅖ of consumer respondents are not aware that credit card companies and lenders refer to credit scores when it comes to making decisions about pricing and approval.

  • ⅖ believe that age and marital status influence credit scores.

  • ¼ to ⅓ of consumers do not know that they have the right to be informed of the reason for credit decisions (loan disapproval, interest rates, etc).

  • ⅓ to ⅖ of respondents are not aware that even the credit score of co-signers can be affected by student loans.

  • ¼ or more of respondents do not know how to improve or keep their credit scores from declining.

  • ⅓ of consumer respondents are misinformed about credit repair agencies.


All of these statistics prove that more than ever, consumers should take time to get credit score education. You need to learn how to utilize this so it will not have any effect on any financial opportunity that comes your way in the future.

Here is a video from National Debt Relief that discusses why credit scores are important and how it can affect your plans to refinance your home.

Important credit score concepts you need to know

Now that you understand why credit score education is needed, let us discuss the basic concepts that you need to learn. If anything, this information will help you fix your credit score fast – or at least, in time for you to keep it from ruining financial opportunities that will come your way.

Here are 5 things about credit scores that you need to know about.

What is a credit score?

A credit score is a measurement of a consumer’s credit worthiness. As mentioned, it depends on your credit report. The data found on this report is a compilation of all your credit information from the various credit and financial institutions that you have transacted with. The three major credit bureaus (TransUnion, Experian and Equifax), compile this information and put it on your credit report.

A credit score range will depend on the company behind it but the average is from 300 to 850. A high credit score indicates that you are creditworthy while a low credit score would raise warning bells for lenders.

How is your score computed?

The exact formula to compute your credit score will vary. Fico Score and VantageScore, for instance, will compute your score differently. But all of them will base your score on your payment history, debt amount, credit history, new accounts, and type of accounts. These are the 5 important factors affecting your credit score.

Based on the FICO Score, the payment history affects 35% of your score. When you have a late payment, this will be affected. The next part is your debt amount – which is 30% of your score. When you have a high debt amount, this will suffer. Your credit history is 15% of your score. The older the account, the higher your score will be. The fourth involves new inquiries – which is 10% of a credit score. When you apply for a new loan and the lender looks at your credit report, that can affect your score negatively. The fifth also affects 10% of your score and it is the type of accounts that you use. The more variations, the higher your score will be.

Who looks at your score?

The majority of the people who will look at your score includes lenders and credit card companies. If you plan on transacting with any of them, you need to brush up on your credit score education. They make up the majority because you are borrowing money from them. Other viewers of your score includes employers, landlords, insurance companies and utility companies.

How to check credit scores?

If you want to take a look at your credit score, you need to get a copy of your credit report first. You can get a paid copy from one of the major credit bureaus or you can download a free copy from the Annual Credit Report website. The government mandates the three major credit bureaus to provide consumers with a free copy of their report every year. That means you get three free copies annually.

Once you have your credit report, you can proceed to search for a credit score calculator. There are many free calculators online – just make sure you will go with a site that is trustworthy and secure. Simply input the data in your credit report to get an estimate of your credit score.

What happens when you have a bad credit score?

Probably the most important question in credit score education is what will happen when you have a bad score. It really depends on who will look at your score. A bad score would mean higher interest rates from lenders and credit card companies. It will not really mean a disapproval – unless your score is really very low. For landlords, they may keep you from leasing their place or they will get a higher rental deposit from you. For employers, a bad credit score can cost you a job. For insurance companies, it can mean a higher premium payment. For utility companies, it can be the same as the landlord, you could be asked for a deposit.

Nothing is wrong with keeping your credit score high so you might as well try to take care of it. Start by learning more about it through credit score education. Added knowledge will never put you in a bad light.

Why The CFPB Has Slapped The Credit Information “Furnishers”

You probably know that somewhere filed away on giant servers are your credit reports – from the three credit reporting bureaus – Experian, Equifax and TransUnion. You may even know that they probably have different information. The reason for this is that there is no federal law dictating that lenders must furnish information to all three bureaus or for that matter that they have to report information to any of them. But did you know that your reports might contain serious errors?

A shocking 20%

In February of last year, the Federal Trade Commission released a study that was very eye opening. It had found that 20% of us have errors in at least one of our three credit reports. Even worse, about 5% of us have mistakes in our credit reports so serious they could be causing us to pay more for products such as insurance and auto loans.

Credit ReportThe best reason to check your reports regularly

What this suggests is that it’s important that you check your credit reports regularly. You can get them free once a year from each of the three credit reporting bureaus or on the website Most experts say it’s best to get your credit reports one at a time every three months. This is sort of a free way to monitor your credit year-round. If you don’t do this you’re probably putting your wallet at risk.

Not just your responsibility alone

The Federal Trade Commission has said that the accuracy of your credit reports is not your responsibility alone. The companies that supply financial data to the three credit reporting companies and that are sometimes referred to as “furnishers” are also part of the equation. The information they provide should be both thorough and accurate. One of their responsibilities is to investigate any complaint consumers make regarding potential errors on their credit reports.

Slapped by the CFPB

The recently created Consumer Financial Protection Bureau (CFPB) is not very happy with the way the furnishers and credit agencies have been handling complaints filed by consumers. The biggest complaint is that there is no official way for the credit reporting agencies to send information to the furnishers that was provided by consumers who had filed complaints. So the CFPB wants the credit reporting companies to begin forwarding the data given to them by consumers through E-Oscar, an electronic document-sharing program that is already in use. Thanks to the CFPB the system has been upgraded so that Experian. Equifax and TransUnion can now send the documents that were provided by consumers to the furnishers when they dispute an item or items on their credit reports. In fact, the CFPB has actually formalized the responsibilities and legal role of the information furniture’s when it comes to consumer complaints about their credit reports.

Investigating disputes – whenever a consumer files a dispute about an item on his or her credit report, the furnisher needs to be able to obtain information about it and must investigate the consumer’s complaint

Providing results – the CFPB has said that in addition the information furnishers must report the results of their investigations to the consumer reporting bureaus that originally filed the dispute.

Inaccuracies – finally, the information furnisher must report the results of their investigations to the credit reporting. They must also modify, permanently block or delete disputed information that is found to be inaccurate, incomplete or that cannot be verified.

The heat is on

What this amounts to is that the CFPB has put the heat on furnisher’s to increase their ability to investigate disputes from consumers, and on credit reporting firms to make sure that the furnishers get the information from consumers regarding disputes with the credit reporting agencies. And if the information furnishers don’t conform, the CFPB says it will take “supervisory and enforcement actions” against them. It’s believed that this will get the attention of the furnishers and credit reporting bureaus to do better on credit report disputes or see the wrath of the CFPB.

What to look for

When you get your free credit reports it’s important to look for the following negative items:

  • Charge-offs
  • Late payments
  • Accounts going to collection (collection accounts)
  • Tax liens
  • Bankruptcies and foreclosures
  • Judgments and lawsuits

If you find one or more of these on a credit reports and you believe the information is in error, it’s important to dispute it. The three credit reporting agencies have forms on their websites you can use to file a dispute. However, most experts say it’s best to file your dispute in the form of a letter along with the documentation you have to support your claim. While the credit reporting agencies are required to contact the company that furnished the information and ask that it be verified this has been a very haphazard process – which is, of course, why the CFPB has put the heat on both the furnishers and credit reporting agencies to do a better job of handling disputes.

man jumping with chart behindYour credit score

You should also know your credit score. It’s critical because most lenders look only at it when deciding whether or not to grant you credit. Your credit score is a three-digit number that is a sort of distillation of your credit reports. It’s created using a formula or algorithm that was created by the Fair Isaacs Corporation or what is now known simply as FICO. You can get your credit score on its website, or from one of the three credit reporting bureaus or from an independent information provider such as or If you choose to get your score from FICO you’ll either have to sign up for a free trial subscription of his Score Watch service or pay $19.95. While you can get your credit score free from one of the credit reporting agencies, be careful and don’t sign up for a service that you will have to remember to cancel. We think or might be your best options as you could get your score free from either one of them without having to sign up for anything. These two websites provide other helpful information such as the amount of money you owe on each of your credit cards, the amount of your mortgage and auto loan (if applicable) and tips for managing your debts. Finally, if you have a Discover Card you’re in for a nice surprise. Check out your next statement and it should include your FICO credit score. How cool is that?

Understanding your credit score

As you might guess, the higher your credit scores the better. Your FICO score will be somewhere between 300 and 850. There is also a score that was developed by the three credit bureaus called the AdvantageScore. It’s a bit different in that it ranges from 501 to 960. To make matters even more complicated, each scoring model uses a different algorithm and weighs your credit report differently so you might have a score of 750 from Credit Karma and a 762 from Credit Sesame.

The components of your credit score

While there are more than 100 different credit scoring models used in the industry, there is one thing that seems to be universal and that is the five components that make up a credit score. They are.

  • Your credit history
  • Your utilization of credit
  • How long you’ve had credit
  • Types of credit you’ve used
  • Recent searches for credit

Of these five components the first two – credit history and credit utilization – account for 65% of your credit score. Your credit history is just that or how well you have used credit in the past. Credit utilization is a bit trickier as it’s really your debt-to-credit ratio or how much credit you’ve used versus the total amount of credit you have available. For example, if you have $5000 in total credit limits and had charged up $2500 you would have a debt-to-credit ratio of 50%, which would be too high.

Unlike your credit history, credit utilization is something you have control over. You could improve it and get a better score. All you would have to do is pay down some of your debt and presto! Your credit score should increase.

Mobile Menu