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Are You A Credit Card Revolver Hacker or Deadbeat?

Long line of credit cards (generic)Have you ever stopped to think about how you handle your credit cards? If you’re typical, you probably haven’t given much thought to this. You use your credit cards, receive statements, pay your balances (we hope) and that’s it.

But the credit card providers don’t look at things the same way. In fact, they actually divide credit card users into three distinct categories as follows.

1. The revolver

This is the person that credit companies love the most. And if this is you they want to keep you as a customer for as long as they can. Why do credit card companies love Revolvers? The reason is simple. These people are virtual money machines for the credit card companies. The name Revolver refers to people who do not pay off their balances at the end of every month, which causes revenue-generating interest to build up and increases the total amount they’ll eventually have to pay. The most diverse type of credit card users is probably the Revolvers. They make up a wide demographic that includes everything from minimum-wage workers to high-powered financiers. If you carry a balance from month to month it doesn’t matter whether you’re the type of person who buys big-ticket items on a small time budget and then makes the minimum payments on a maxed out card or not, you’re still a Revolver. However, it isn’t necessarily bad to be a Revolver. It’s just that you’ll usually end up paying more for most of the things you buy than other people do.

2. The deadbeat

When you see the term deadbeat you might immediately think it’s a person that doesn’t pay their debts. Well, you’d be wrong. A Deadbeat is really a responsible credit card user. But the credit card companies don’t make a lot of money on Deadbeats, which is why they give them such a negative name.

Deadbeats have one simple thing in common that’s undesirable to the credit card companies but desirable to almost everyone else. These are people who pay their credit card bills in full every month. Unshakable deadbeats are credit card users who never pay a single penny in interest, which keeps their credit cost as low as is financially possible. A slightly more easy-going cousin of the Deadbeat is the Transacter. This is a person that typically pays their balances in full and on time but that sometimes allows small amounts of money to ride from month-to-month.

Deadbeats are usually people who are financially responsible and don’t spend more money than they know they can afford even when faced with tantalizing bargains. If you are a Deadbeat and not admired by your friends and family members for your self-control, these people are probably just not paying a sufficient amount of attention.

3. The card hacker

No, this is not a person who is a con artist or identity thief. In this case, Hacker is the type of credit card user who opens two cards at once. One of them will have big bonuses and double rewards in key categories but a very high APR. Simultaneous to this the Hacker will also open a bare-bones reward card or one of those 0% interest balance transfer cards where there are no interest charges for the first 12 months.

Once these people have opened these two accounts they will then charge a few thousand dollars on the big rewards card. For example, they might book a vacation they had already budgeted for or purchase major appliances. They then immediately move this charge over to the card with the low rates on balance transfers. What ultimately happens is that the Hacker ends up with a big stack of earned rewards points and then a full year to pay off their balances before they have to pay any interest.

Does this sound like an exciting strategy? It might be but it does have its risks. Before you attempt credit card hacking, you need to take into account whatever balance transfer fees there might be which would negate the benefits.

Which one are you?

Judging by the statistics, the odds are that you’re a Revolver. The Financial Industry Regulatory Authority released a study in April 2012 that 55% of men and 60% of women carry a balance from month to month on their credit cards. In addition, about 40% of American adults make just their minimum payments every month, which means they’re paying more than just the retail price of their purchases.

There’s nothing wrong with being a Revolver

College student thinking while holding credit card

There is really nothing bad about being a credit card Hacker or Revolver. It’s your own business how you choose you to use your credit cards. But our advice is to not let that nasty sounding term of Deadbeat put you off. When it comes to credit cards, it’s definitely best to be a Deadbeat.

Watch out for misleading credit card offers

Whether you’re a Revolver, Hacker or Deadbeat you need to watch out for misleading credit card offers. We read of one recently where the person received a letter from Bank of America that referred to an” Annual Privacy Notice” and on the inside included several mentions of “your prepaid card.” Since the person who received this offer was not a Bank of America customer, she was immediately suspicious. If you receive envelopes like this that refer to “annual privacy notices” or to prepaid cards from banks where you don’t have accounts, be sure to read fine print. These mailing pieces often have misleading print on the outside and then turn out to be advertisements or calls for action for some product or service.

Stay safe

If you are receiving solicitations like this or any others that refer to your privacy or that include calls for action you don’t understand, be sure to get your credit reports from the three credit reporting bureaus – Experian, Equifax and TransUnion. You can get them free once a year either from the individual credit bureaus or altogether on the site You will need to carefully review these reports checking out every entry including all of your accounts, and your identification, which would include your name, address and Social Security number. Be sure to look for any inquiries or new accounts you don’t recognize. In the event you find there are accounts you don’t remember having opened or information that is incorrect, immediately contact the appropriate credit bureau and ask that it put an alert on your credit report and let you know if there are any new inquiries.

If you find mistakes

In addition to looking for accounts you don’t remember having opened, you should look for errors in your credit report. Last year the Federal Trade Commission released a study that 20% of us have errors in our credit reports and 5% of us have errors so serious they could be hurting our credit scores. You should look especially for items that have gone to collection, judgments, missed payments, late payments, bankruptcies foreclosures and tax liens. If you find any of these in your credit reports and you believe they are errors, you will need to contact the appropriate credit bureau and dispute them. This means writing a letter to the bureau along with whatever documentation you have that supports your case. You should send copies of this to the other two credit bureaus as well. When you dispute an item, the credit bureau is required by law to contact the institution that provided the information and ask that it be validated. In the event the institution cannot validate the information or fails to respond within 30 days, the item must be removed from your credit report.

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.

Revealed – The 4 Greatest Myths Of Credit Scoring

Credit Score highlighted in yellowHaving a poor credit score is no big deal, right?


A poor or bad credit score has some very serious consequences. For one thing it will cost you money. This is because there is an inverse ratio between your credit score and the interest rates you’ll be charged. In other words the lower your credit score the higher will be your interest rates. While this may not have much of an effect on a short term personal loan or a small credit card balance it can mean big money when it comes to auto loans, mortgages and other types of secured loans. As an example of this, a 30-year loan for $165,000 at 3.93% will have a monthly payment of $786. However, if have bad credit and are charged 4.46% (just half a point more) your monthly payment would jump to $830 per month. This would be a whopping $16,560 over the life of your loan.

In addition, if you have a poor credit score you may have to pay more for your auto insurance and might not be able to rent an apartment or get your utilities turned on.

Where do you stand?

Lenders usually evaluate credit scores in terms of these ranges:

• Between 700 and 850 – Very good or excellent credit score
• Between 680 and 699 – Good credit score
• Between 620 and 679 – Average or OK score
• Between 580 and 619 – Low credit score
• Between 500 and 579 – Poor credit score
• Between 300 and 499 – Bad credit score

If you know your credit score you now know how lenders will view you. If you don’t know your credit score, it’s time you got it. You can get it free (once a year) from any of the three credit reporting bureaus – Experian, Equifax and TransUnion – or at the website You can also get your score at, which might be your best option as it’s the score most often used by lenders. The other credit scores such as the ones you would get from Experian and TransUnion will not be identical to your FICO score. But one of these should be close enough for you to know where you stand and how you would be viewed by a potential lender.

Great myth #1: A minor late payment won’t hurt your credit scoregrandma looking shocked

It’s said that a minor late payment won’t hurt your credit score if you quickly catch that account back up. While this may be true it’s only if that late payment is isolated and historical, which means the account is not currently delinquent.

There are two categories of derogatory information in the world of credit scoring. They are minor and major. The line that divides these two categories is very clear. If you have a historical delinquency that didn’t go past due by 90 days or more, it would be considered a minor derogatory item. This category also includes historical 30- and 60-day delinquencies. Everything else is considered to be a major derogatory item. This would include defaults tax liens, collections, judgments, repossessions, foreclosures, bankruptcy, any account that is 90 days late or worse and accounts that are currently delinquent.

If you are currently 30 days delinquent on a debt your score will be lower than if you had never been delinquent on anything. In fact it will be considerably lower − probably by 35 to 50 points. If you are more than 60 days delinquent on paying a bill (but not in default) it gets worse. Your score would probably be 100 points lower than someone who had never missed a payment.

Why do these cause your credit score to drop?

A scoring system such as FICO or VantageScore is aimed at predicting how likely it is that you will go delinquent by 90 days soon after you apply for credit. If you are currently delinquent – even for just 30 or 60 days – you make the credit score’s job simple because you’ve basically proved that you’re willing to be past due on credit obligations. This is what causes that drastic drop in your score.

Not well known

There is something else you should know about your credit score that is not a secret but isn’t well known by many consumers. It’s that if you have a “30-day late” on one of your credit reports this means you’re at least 30 days late on that bill and probably even later. This is because lenders are not allowed to report your late payments to the credit bureaus until you’ve gone a full 30 days past the due date. If you’re just a week or two behind on a loan payment this won’t be on your credit reports though you will likely have to pay a late fee. So, if there is a “30-day late” on your credit report, this actually means you’re 30 to 59 days late on that bill. And if you find a “60 day late” on your credit report, this really means you’re 60 to 89 days late on that obligation and so on.

The point here is that if you have a “30 day late” on your credit reports it’s likely that you’re really 40, 50 or more than 60 days late. This is another reason why FICO and VantageScore are so tough on consumers who have accounts that are currently delinquent.

Man climbing range of credit scoresGreat myth #2: All I have to do is catch up on the payment

A second great myth about credit scoring is that if you just catch up on your payment and avoid going 90 days past due your score will recover. This is true to an extent as your score will bounce back but not entirely. The reason for this is that lenders update your credit reports only once a month. In the event that you have an account that is showing up as being currently past due, it will actually be that way for an entire month. And it’s likely that your credit score will be lower and even considerably lower for 30 days.

“Account maintenance”

Many finance and credit card companies pull your credit scores every month just to determine if they want to continue to do business with you. This is called either “account management” or “account maintenance.” When you review your credit reports you may find a long list of inquiries that fall into those two categories. The problem with this is that if a creditor pulls your credit score during their account management process and sees that it has dropped because you have a currently late account, it’s likely to react by lowering your credit limits, closing your account or raising your interest rates.

Great myth #3: Your credit scores will take care of themselves if you just handle your finances responsibly

Remember what we wrote in an above paragraph that credit scores are a way to predict how you will handle credit in the future. If you quit using credit or use it in a way that the credit scoring formulas don’t like such as using just one card, closing down a bunch of accounts or maxing out your cards – even if you pay them off in full – your scores could go down. This is because it will look as if you were having some problem with credit.

Great Myth #4: Checking your credit will hurt your credit score

The truth is that getting your own credit report and scores will not affect your credit scores. Period. On the other hand if you were to ask a friend or relative at a car dealership or bank to pull your credit reports this would likely be treated as a “hard” inquiry and would ding your credit score. But it’s a non-event when you check your own credit.

This is a very bad myth because it can keep people from checking their credit reports to see what’s going on with their credit and their scores. A recent survey found that about 20% of all U.S. credit reports contain errors and that 5% have errors so serious they are damaging people’s credit scores and causing them to be turned down for loans or paying much higher interest rates. You really need to go to at least once a year to get your credit reports from the three credit bureaus so that you could dispute any errors you find. And if you’re about to apply for a major loan such as an auto loan or mortgage, you should go to and buy your score so that you can see how lenders will view your application. Plus, you will get some good tips th`ere for improving your numbers.

Speaking of credit reports

If you’d like to know more about credit reports and how credit reporting works, here’s a short video that offers  some good information.


How To Read Your Credit Reports

You do know you have a credit report, right? Right? Well, technically that isn’t right. It’s because you actually have three credit reports, one from each of the three credit bureaus–Experian, Equifax and TransUnion. You can download your report from each of these bureaus or get them altogether at They’re free once a year as this is what the federal government has mandated. If you need your reports more frequently than this, you will then need to pay for them.

Why it’s important to review all your credit reports

You really do need to review all three of the credit reports. There are two reasons for this. First, all three display your information in different formats. And secondly, they can contain radically different information. You could get one of your credit reports, review it and think that they would all be the same. But that’s not the case.

Here’s a sample of what a TransUnion credit report looks like.

Sample TransUnion Credit Report

In comparison, here’s a sample Equifax credit report.

Sample Equifax redit report

Here’s a sample credit report with a key that could help you better understand your credit reports.

Sample credit report and key

Why they are different

The information in your credit reports is different because the system is voluntary. Creditors supply credit information to whichever agency they choose – if at all. So your report from TransUnion could contain negative information you would not find on your report from Equifax. Or vice versa.

The setup

As you have seen from the samples shown above credit reports can look very different but are generally divided into four components: identifying information, credit history, public records and inquiries. Your identifying information is just that – information that identifies who you are. When you review a report the first thing you need to do is examine it carefully to make sure that it’s accurate. It is not uncommon to find your name spelled several different ways or multiple Social Security numbers. Why is this? It’s because someone provided the information that way. Don’t be concerned if you find several variations. It will stay in your report even if it’s wrong because changing it might mess up a link.

You might also find under Identifying Information your current and former addresses, your birth date, driver’s license numbers, telephone numbers, your spouse’s name and the name of your employer.

Credit history

Each of your accounts will include your creditor’s name and an account number. Also, you might find several accounts from the same creditor. This is due to the fact that most creditors have more than one type of account. Or they may transfer your account to a new location if you move and give it a new number. Your credit history will also have the following

  • The type of credit – such as a car loan, installment loan or mortgage
  • If that specific account is just in your name or includes someone else’s
  • The loan’s total amount, its high credit limit or if it’s a credit card, its highest balance
  • The amount still owed
  • Whether it’s a minimum monthly payment or a fixed monthly payment
  • The account’s status expressed as open, closed, inactive, paid off, etc.
  • How satisfactorily you’ve paid on the account

Your credit history

This section will display your recent payment history and whether or not you’ve paid each month as you had agreed. Credit reports from TransUnion and Experian also have the amount of each payment. There may be other comments under an each account such as whether it was closed by a consumer, was charged off or listed as a default. The term “charged off” means that your creditor has given up. In other words, it made an effort to collect the debt and couldn’t so charged it off. “Charge-off” is basically an accounting term. What will actually happen is that your creditor will probably bundle up your debt along with dozens of others and sell the whole bunch to a collection agency.

Public records

If you have information in this section, it’s not a good thing. If there is a public record in this section it’s because you had something negative. However, this will list only data related to your finances such as judgments, tax liens and bankruptcies, all of which can ruin your credit. The only good news is that lawsuits, arrests and other such information won’t be included.


This is simply a list of every creditor that has requested your credit report. Whenever someone gets your report, it posts an inquiry. For example, if you were to call a credit bureau and ask for a copy of your report it will be there as an inquiry. There are actually two types of inquiries – hard and soft. Those that were initiated by you when you filled out a credit application are called hard inquiries. In comparison, when they from companies that want to prescreen you for a credit offer or from potential employers or creditors who are monitoring your account they are called soft inquiries. These inquiries appear only on reports that are given to the consumer.

You might find errors

It’s quite possible you will find one or more mistakes on your credit reports. A 2013 government study found that 20% of consumers had errors on their credit reports. And 5% had errors so serious that it was costing them more money on their loans and insurance. What can you do if you find a mistake such as an erroneous amount or an account that isn’t really yours? You will need to dispute it with the credit bureau. Your credit report will include a web address for that credit bureau’s online dispute form. However, most experts counsel you to dispute the mistake in writing. If you want to have the error deleted from your report, you will need to provide supporting documentation. It should be attached to your dispute letter and then sent to the appropriate credit bureau as registered and return receipt requested so that you can prove you sent the letter and that the bureau received it.

What happens when you dispute an item

If you do find a mistake and dispute it, the credit bureau will contact the institution that supplied the information, which then has 30 to 45 days to respond. The item you disputed will continue to stay on your credit report until the issue is resolved. If you don’t feel that your dispute was well handled, you can file a complaint online with the Consumer Financial Protection Bureau.

How this translates into your credit score

A third reason why it’s important to review your credit reports is because they are the basis of your credit score. In other words, negative items on your credit reports translate into a bad credit score. How your credit reports turn into a three-digit number is a process that was invented by the company FICO. No one but FICO knows the algorithm that produces your score but it is known that it’s made up of five sections as follows:

  • Your payment history – 35% of your score
  • The total amount you owe – 30%
  • Your credit history or how long you’ve had credit – 15%
  • Inquiries and new accounts – 10%
  • The types of credit you’ve used – 10%

Four of these sections are pretty self-explanatory. The one that’s a bit misleading is the section The Total Amount You Owe as it’s not really your total debt. It’s your debt-to-credit ratio. For example, let’s suppose you have total credit available of $12,000 (the total of all your credit limits) but have used up $6,000 of it. This would yield a debt-to-credit ratio of 50%, which most experts say is too high. This is one area where you could quickly increase your credit score simply by paying down the amount you owe until your debt-to-credit ratio gets to 30% or lower. Alternately, you might be able to talk some of your lenders into increasing your credit limits. This would have the same affect on your debt-to-credit ratio as if you had paid down some of your debts. However, if you’re having a problem with debt or a low credit score, you may find that your creditors very reluctant to increase your credit limits.

How to get your credit score

If you haven’t seen your credit score recently – or ever – you can get your true FICO score on the website You could also get your credit score from the three credit reporting agencies though this won’t be your true FICO score. However, it should be close enough for you to have a pretty good idea as to how you would look to potential lenders.

The Truth About Those Free Credit Reports

Credit ReportI once had a friend that had been an advertising agency copywriter. He once told me, “You can’t beat free.” And it’s true. There’s just no word in advertising more powerful than free. It’s nice to read that something’s 20% off, 30% off or even 40% off. But none of that beats free. You not only save money when you get something free, it just leaves you feeling good – almost as if you had gotten away with something. Unfortunately, in some cases free isn’t entirely free. As an example of this, I was about to order something from Amazon the other day because I would get free shipping. That is, it was free until I read the fine print and learned that my order had to be for $100 or more.

Those free credit reports

Another example of where free isn’t really free is in the case of the free credit reports you see advertised. Hardly a day goes by that I don’t see an offer for a free credit report. You’ve probably seen them yourself on TV or received them via email. But in many cases, these “free” credit reports are not exactly free. This is because you’re often required to do something in order to get your report. The most popular of these is credit monitoring. As an example of this, the website offers a free credit report but if you’re not careful, you’ll see your credit card hit with a $29.95 charge the next month for credit monitoring. You might remember seeing commercials for with that catchy jingle. The way it promoted a free credit report was so misleading that the company was ultimately sued for $1.2 million by the FTC (Federal Trade Commission.)

The credit-reporting bureaus

Two of the three credit reporting bureaus – Experian and Equifax – also offer “free” credit reports. Experian will provide you with your credit report for just one dollar but you will be required to sign up for a free seven-day trial of its Credit Tracker service. The second of the credit reporting agencies, Equifax also offers a “free” credit report. But when you click on the appropriate button, you end up on the site mentioned above, The third of these bureaus, TransUnion, doesn’t offer a free credit report on its homepage but promotes a free credit score instead.

The other websites

There are also a variety of websites that promise free credit reports but again have strings attached. You need to be wary of these because if you choose the wrong one you could end up with a surprise charge on your credit card for some service you didn’t really want and would likely have a very hard time canceling.

Some good alternatives

Fortunately, there are websites where you could get your credit report free that are honest and provide helpful information. One that we like is It will provide you with your credit report free, along with the ability to stay on top of all of your accounts in one place along with free credit monitoring. However, the free credit score you get won’t be your true FICO score. It will be your Experian score, which should be close enough to your FICO score for you to know whether you have good or bad credit. We also like for the same reasons.

The one true place to get your credit reports free creditbad and good credit signs

Some years ago our Congress passed the Fair Credit Reporting Act (FCRA). This act mandated among other things that the three credit reporting bureaus must provide you with your credit report free once a year. You could get your report by contacting each of the agencies individually or via the website (not to be confused with the other site that has a similar name). This site not only provides your credit reports free but also gives you the option of obtaining all of then simultaneously or one at a time. Many people choose to get one report every four months as a way for do-it-yourself credit monitoring.

Look for these items

When you get your credit reports, there are several items to look for that could be severely damaging your credit score. These include:

  • Late payments
  • Accounts sent to collection
  • Defaults
  • Liens
  • Judgments
  • Bankruptcies
  • Foreclosures
  • Charge-offs

If you do find any of these items on one or more of your credit reports, make sure they are really legitimate. The three credit bureaus process literally thousands of pieces of information a week and they do make mistakes. If you find an error on one of your reports, it’s important to dispute it. All three of the credit-reporting agencies have online forms where you can file a dispute but most experts say it’s better to do it via letter. You will need to attach any documentation you have supporting your claim. It’s also a good idea to send a copy of your letter and documentation to the organization that provided the erroneous information. Once the credit bureau receives your letter, it must contact the organization that provided the information and ask for it to be validated. If that company cannot validate the information or doesn’t respond within 30 days, the credit bureau must remove that information from your credit file.

If you need to dispute an item, here’s a video with helpful information about the letter you would need to write to the appropriate credit bureau.

The 5 Items You Must Review In Your Credit Report

Credit ReportIf you’ve not seen your credit report recently – or ever – you need to get going and get a copy. In fact, you need to get copies of your credit reports from the three credit agencies – TransUnion, Experian and Equifax. Or you can get all three simultaneously on the site This is due to the fact that your credit score is based on your credit report(s) and today credit scores are king. If you have a bad credit score, you may not be able to get any new credit at all. Or you may have to pay much higher interest rates. In fact, a bad credit score can even cause your auto insurance company to charge you a higher premium.

When you get your report, here are five key items you must review.


These have a huge impact on your credit score. Thirty-five percent of it is based on how well you handle credit. If your credit report shows you’ve paid bills 30, 60, 90 or 120 days late, this can be very damaging. A second factor that’s important is called timeline. This is how late you made the payment or how long ago you made the mistake.

Your debt-to-credit ratio

A second important factor in your score is your debt-to-credit ratio. This is the total amount of debt you have vs. your total credit limit. For example, if you have a total credit limit of $20,000 and debts of $12,000, your ratio would be 60% or much too high. Ideally, you would want to have a debt-to-credit ratio of 10% or at least 20%.


You should also look carefully for any accounts that have gone to collection or that have been written off as bad debts. One or more of these will have a serious effect on your credit score. But if you find an item that isn’t really yours you can question it and possibly have it removed from your report. On the other hand, if the item is yours, you could decide to pay it though this won’t improve your score. You should also check your state’s statute of limitations. This is the amount of time that a creditor has to sue you over that debt. Of course, it’s best if the statute of limitations has expired.

Bankruptcies, liens and judgments

You should know if you have had any of these issues. However, it’s worth looking for them in your credit report to make sure that no one else is using your credit and trashing it. Also, an unscrupulous debt collector could have tagged you with someone’ else’s debt or taken some action against you without notifying you. This kind of information would be in the “public records” section of your credit report. Be sure to look there to see if there are any bankruptcies or liens reported that you don’t believe were yours.

Credit inquiries

A third important component of your credit report is how many requests have been made to review it. There are hard and soft requests. Soft requests are usually those made by companies looking to offer you credit such as a pre-approved credit card offer. Hard requests are those where you’ve actually requested new credit, which triggered the lender to check your report. A hard inquiry will cause your credit to dip a couple of points. These generally affect your credit score for about a year but you’ll see them in your report for probably two years.

Your credit score

Unfortunately your free credit reports will not include your credit score. You can get your score free from one of the three credit reporting bureaus but it will be your Vantage Score and not your true FICO score. Since most lenders use your FICO score it’s important that you get it. Unfortunately, you can get it in only one place – It will cost you $19.95 unless you sign up for a free trial of its Score Watch program. In this case it would be free.

How Bad Credit Could Keep You From Getting A Good Job

Upset man with hands on headIf you know about your credit report, you undoubtedly know that a poor one can keep you from getting new credit or cause you to pay more in interest charges. But did you know that a poor credit report could keep you from getting a job or even keep you unemployed?

Credit and the hiring decision

I have seen where people with great resumes were turned down for jobs and couldn’t understand why. I read one example where a very well qualified guy applied for for a job at a high-end men’s clothing store but didn’t get it. He eventually received a letter from the store explaining that it had run a credit check on him and had found information that played a role in its hiring decision.

Check that little box?

What this gentleman was doing every time he applied for a job was checking that little box that grants the potential employer the right to check his credit report. As a result, he kept getting turned down for jobs he was well qualified for.

Why credit reports?

Many employers now routinely check credit reports. Why is this? It’s because as the credit-reporting bureau Experian explains, “Credit information provides insight into an applicant’s integrity and responsibility toward his or her financial obligations.” You might disagree with this but if a prospective employer accepts this as a fact and you have a bad credit record, you could be in a world of trouble trying to get a new job.

The Catch-22

About 47% of employers use credit checks when making a hiring decision meaning that this could easily turn into a Catch-22. You lose your job, you get into financial trouble that appears on your credit report and this keeps you from getting a new job.

No room for explanations

One of the biggest problems with credit reports is that they leave no room for explanations. Your report might show you defaulted on a loan but it won’t show why. You could have a perfectly good reason for having defaulted but you might never have the opportunity to explain it.

Be proactive

If you’re job hunting you definitely should get your credit reports. You can get all three simultaneously on the website, When you review them and see you have a black mark (or marks) that could keep you from getting a job, be proactive. Discuss the issue upfront during your job interview – especially if you can explain what caused the problem and what you tried to do to solve it. Many prospective employers will appreciate your candor and might overlook that black mark.

Credit reports and credit scores

Credit reports and especially credit scores have seeped into our lives in many ways you wouldn’t expect. Some automobile insurance companies now routinely pull credit scores when calculating premiums. If you try to rent an apartment, the odds are good that the landlord will request your credit score. And, of course, mortgage and auto loan companies will use your credit score when deciding whether or not to loan you money and at what interest rate.

Get your credit score

You should also know your credit score. The website will sell you it for $19.95 or give it to you free if you sign up for a free trial of its Score Watch program. You should also be able to get your score free from one of the three credit-reporting bureaus though you will likely have to sign up for something to get it.

If you have a poor score

If you have a poor or bad credit score (500 or below) there isn’t much you can do about it short term – unless you find errors that are affecting it negatively. If so, you could write a letter to the appropriate bureau and ask that the item (or items) be deleted from your report. You will need documentation to prove your case. But if you do, it’s likely that the negative items will be deleted and your credit score should go up noticeably.

How To Handle Credit Report Errors

Holding credit card and looking at laptopCan you imagine how it would feel if you were to pay off five credit cards and then find that they had been recorded as “uncollectible” on your credit report? It can and does happen and can lead to messy problems.

Millions have errors

If you review your reports and find credit report errors, you’re not alone. I have seen reports that there are millions of credit reports containing mistakes, some of which are worse than others. This study also revealed that 1 in 20 consumers have errors on their credit reports so serious that they are probably paying higher interest rates on credit their cards and loans. This actually comes from the Federal Trade Commission.

Can cost thousands of dollars

Errors on your credit report can actually cost you hundreds of dollars over the course of a year or two in higher insurance premiums and higher interest charges. The fact is that even if the error seems innocent, it can have a negative impact on you.

You have rights

Several years ago our Congress passed the Fair Credit Reporting Act. This gives you the right to dispute items on your credit report with the appropriate credit bureau. If you find such an error, you will need to write the credit bureau and dispute it. You will need to send documentation supporting your position to both the credit bureau and the company responsible for the erroneous item. This could include any pertinent emails, faxes or letters, canceled checks (both the fronts and backs) and billing statements.

The credit bureau is legally required to respond within 30 business days from the day it received your letter. These 30 days are meant to give the credit bureau time to investigate your claim. However, the word “investigation” is very loosely defined. In fact, all the credit bureau has to do is go back to the entity that provided the information and ask it to verify the item.

The problem

The problem is the credit bureaus (Experian, Equifax and TransUnion) are not in business to determine who is right in these disputes. They will usually go with whatever the company that furnished the information tells them as they believe it’s in the best position to know.

At least three months prior

Most experts recommend that you get your credit reports at least three months before you apply for credit on a big items such as a mortgage. This will boost your chances of quick success. You can get your three credit reports free at the There are two reasons why you need a recent report. You want to see your current information and not information that’s six months out-of-date. Second, the personal report you will get is much easier to read (and understand) than the one the lender gets.

What else you could do

If you cannot settle your dispute with the credit bureau you still have some alternatives available. You can add a statement about your dispute to your credit file explaining why you disagree with the item. If you’re lucky, future creditors may take this into consideration when reviewing your credit applications. You can also involve the Consumer Financial Protection Bureau. The agency takes complaints online regarding credit report disputes but only if you first disputed the item with the appropriate credit bureau. The agency will send your complaint to the credit bureau and ask that it investigate it again.

Hire an attorney

Finally, you could get help from an attorney. Many attorneys will deal with these kinds of disputes on a contingency basis so that you pay nothing unless you get damages as the result of a settlement or from a lawsuit. You can usually get a free consultation upfront and the law firm might even help you draft the letter you would send to dispute the item.

How To Get Free Information About Your Credit

Credit ReportI happened across an article on Yahoo! Finance that I thought was very informative. It was titled “Where to Look for Free Information About Your Credit.” I was particularly attracted by the word “Free” as, well, free is hard to beat.

But there are limits

There are websites where you can get credit information free but they do have their limitations. is the government’s official website where you can get your credit reports free each year. You actually have three credit reports as there are three credit reporting bureaus – Experian, Equifax and TransUnion. However, it’s important to understand that you’re not getting your credit scores. You’re only getting your credit reports. However, all three credit reporting bureaus will allow you to see your credit score – for a small fee.

The full report

Many websites will allow you to see a summary of your credit report from Experian but only the website Quizzle provides the complete report. If you want to access your credit report more than twice a year, you will have to enroll in a paid plan. Otherwise, you can get it free every six months. In addition, Quizzle allows you to see your CE score. However, be aware that this is not your FICO score. Plus, it’s not what your lenders will use when they decide whether or not to grant you credit. But this will give you at least a good idea of how creditworthy you are. Just as important, Quizzle will analyze your credit and provide tips as to how you could make it better.

Information from TransUnion

The website, provides a summary of your TransUnion credit report, along with what’s called your New Account Score. But, again, this won’t be the same as your FICO score. In addition, CreditKarma provides your Vantage Score. The three credit bureaus developed the model on which this score is based. It’s helpful in that it gives your credit a grade from “A” to “F” and has other useful features such as a credit scores simulator that will show you how certain things you do can affect your credit score.

This website is like Quizzle in that its information is based on your credit report from Experian. However, it does require you to purchase your credit report for nine dollars if you want complete access. You can get your Experian National Equivalency Score as wells as a summary of your credit condition. But, again, this is not the same one the creditors use. CreditSesame also has tips on services and products you could use to reduce the balances on your home loan and credit cards.

Not as good as it sounds

The website sounds like it would be a great choice. But what it offers is the Experian Plus Score. Seeing that score might be helpful but it isn’t the one lenders use when they decide how creditworthy you are. Another negative is that you must provide a credit card number when you sign up for your “free” credit score. You get a seven-day free trial. But after that, you must pay $14.95 a month.

Where’s Equifax?

Equifax does not have a free credit score service. To get your Equifax information you need to sign-up for a free trial and then enroll in a plan you must pay for . You just can’t find this information free anywhere – except via

In summary

The net/net here is that you should use to get your credit reports free once a year. You could then use Credit Karma, Credit Sesame and Quizzle throughout the year. They can’t give you your true FICO score. But the scores they provide should at least give you an idea as to whether you’re headed up or down, as well as things you could do that would improve your credit score.

Six Things That Won’t Appear On Your Credit Report

There are a lot of things that will appear on your credit report. For example, 35% of your credit report is based on your “credit history,” or how well you’ve handled credit. If you’ve missed payments, had a judgment against you or a debt moved to a collection agency, this would be on your report. However, there are a number of things that won’t appear on your report – for better or for worse.woman looking at report

Your income

While you might think the amount of money you earn would have an effect on your credit report, it never includes your income. The reason for this is because income is not thought to be a measure of how creditworthy you are. The difference is that your credit scores and credit reports are designed to let a creditor know if you’re likely to make a payment not whether you have the financial ability to make a payment. In addition your salary, there are other income sources that won’t show up such as unemployment benefits, child support, alimony and public assistance.

Job loss

If you become unemployed, this will not be on your credit report, either. You might tell individual creditors such as your mortgage comapny that you’ve lost your job but this won’t be reported to the credit bureaus. However, employment information could be there but this will vary dependent on which credit report your lender requests – from Experian, Equifax or TransUnion.

Merging lives

Despite what many people think, if you get married this does not mean that there will be a joint credit report for the both of you. If someone requests your credit report, the lender will see only your credit history, along with your accounts and debts where your name shows up. This doesn’t matter whether you’re married or not. However, some of your obligations may show up. For example, if you are a cosigner or a joint account holder, this information might be in your report. But your credit report won’t show the names of those people on the other accounts.

A criminal record

If you were arrested for some minor infraction as a teenager, relax. This won’t be on your credit report. The fact is the three credit bureaus simply do not include criminal information on their credit reports with three exceptions. If you had a financial problem that involves the courts such as a lien or judgment, this will be on your report. Child support payments can show up. If you get a ticket or fine and it goes to collection, your report will probably show the final collection activity.

Your medical history

A piece of legislation was passed a few years ago called the Fair Credit Reporting Act. It bars companies from adding information to your report that would jeopardize your medical privacy. This means that as a rule medical debts will not appear on your report – unless they go to collection.

“Unusual” loans

If you’ve taken out an “unusual” loan such as pawning an item, getting a one of those payday loans or signing for a car title loan, this won’t be on your credit report. Of course, if you default on one of these types of loans and your lender hires a collection agency, this will likely show up on your credit report. Another item that won’t be on your report is reloadable debit cards. The reason for is because they are not credit. Another “lender” that is usually not found on credit reports is information from utility providers.

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