Free Annual Credit Report

Each and everyone keeps a record of how much money is checking into their bank amount and how much money is flowing out. What most people do is keep a running tally at the back of their cheque book and then just balance it out with the statement sent by the bank towards the end of each month. Agreed, it is extremely important to know the balance amount left in your bank account while writing out cheques, but it is equally important to know how credit worthy you are. A credit report depicts the credit worthiness you hold.

While some people charge money for drafting out a credit report for you, there are ways to obtain a free credit report too. There are many factors involved that determine your credit score, for instance, some factors involved are: Bill paying history, the number of credit accounts owned by you, late payments ( if any ), collection actions and outstanding unpaid debt. Upon compiling all the necessary information, statisticians compare your information with that of many other consumers. Upon comparing, you are given points for each factor of your financial history that shows you to be a good credit risk. The sum total of all points accumulated are then added up to show you your credit score.

A Credit Report shows how worthy you have been. In layman’s language, a credit report is a tracking of all your credit payments and purchases compiled by any credit bureau and offered to any agency or individual that is trying to determine whether or not your are credit worthy enough to loan you money or invest in your ventures. This report enlists each and every account you have in your name, irrespective of the debit / credit / zero balance, all accounts are potrayed on this report. Any information on this report generally stays on it for upto 7 to 10 years.

Each and everyone should be aware of their credit score and must have a copy of their credit report with them.
If you are preparing to apply for a loan, may it be a home loan / a car loan / a commercial loan, whatever it may be, a loan is a loan, and the lender would need to view your credit report before even thinking of lending you money. More important, you yourself should be aware of your credit score before seeking a loan, so you know whether your loan will or will not be approved. You should always go through your credit report before handing it over to a lender, this is because if you notice some inaccuracy in it, you will have a chance to fix it so it won’t harm the chances of you getting a loan. Having your credit report in hand also gives you a chance to close any old accounts that you no longer use. Having many open accounts can influence your credit score and worthiness. Hence, it is always advisable to atleast get one free annual credit report, if not a paid one.

When you apply for credit, creditors use two primary methods to evaluate your request, especially when viewing your free annual credit report. What most credit lenders do is:

• Weigh your three “Cs”—capacity, collateral and character, and
• Create a “risk score” based on the information in your free credit report.

What are the Three ‘Cs’ of Credit Risk Rating

A creditor needs information to determine the likelihood that you will repay a loan or pay charges you incur on a line of revolving credit. This is done by evaluating the three “Cs.”

Capacity. This refers to the amount of debts you can realistically pay given your income. Creditors look at how long you’ve been on your job, your income level and the likelihood that it will increase over time. They also look to see that you’re in a stable job or at least a stable job industry. It’s important when you fill out a credit application to make your job sound stable, high-level and even “professional.” Are you a secretary or are you an executive secretary or the office manager? Finally, creditors examine your existing credit relationships, such as credit cards, bank loans and mortgages. They want to know your credit limits (you may be denied additional credit if you already
have a lot of open credit lines), your current credit report balances, how long you’ve had each account and your payment history—whether you pay late or on time.

Collateral. Creditors like to see that you have assets that they can take from you if you don’t pay your debt. Owning a home or liquid assets such as a mutual fund may offer considerable comfort to a creditor reviewing an application. This is especially true if your credit report has negative notations in it, such as late payments.

Character. Creditors develop a feeling of your financial character through objective factors that show stability. These include the length of your residency, the length of your employment, whether you rent or own your home (you’re more likely to stay put if you own) and whether you have checking and savings accounts.

These 3 basic principles are essentially what loan officers and creditors are looking for when they run a credit check on your and view your credit report. It is important that you have a good grasp on where you stand financial: this is where your free annual credit report comes in. Make sure you know what your current credit rating and risk score is so you will know what the loan officers see when they evaluate you.

While browsing up on some of the latest posts over the Get Rich Slowly blog, I came across this post where JD (the blog’s author) talks about a recent theft of his mail and possible identity theft concerns.

Some of JD’s suggestions with dealing with Identity Theft include The 3 Ds:

Deter
The first step is to deter identity thieves by safeguarding your information.

…

Detect
Detect suspicious activity by routinely monitoring your financial accounts and billing statements. Be alert to signs that require immediate attention.

…

Regularly inspect your credit report. Credit reports contain information about you, including what accounts you have and your bill paying history.

The law requires each of the three major nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to give you a free copy of your credit report every year. But you have to ask for it.

Defend
If you suspect that you may have been (or may become) a victim of identity theft, you can file a “fraud alert” on your credit reports.

Placing a fraud alert entitles you to free copies of your credit reports. Look for inquiries from companies you haven’t contacted, accounts you didn’t open, and debts on your accounts that you can’t explain.

Read the Rest of JD’s Article Here

This just goes to show you that Identity Theft can happen to anyone, even those who are knowledgeable about it and the ways to stop identity theft.

If you are worried about becoming a victim of Identity Theft yourself, be sure to get a copy of your free annual credit report to ensure that all of your information is accurate and free of errors.

Does Canceling a Credit Card Affect my Credit Score?

Creditors frown on applicants who have a lot of open credit. They can sometimes cause your credit score to lower if you have too many open lines of credit. So keeping many cards may mean that you’ll be turned down for other credit—perhaps credit you really need. And if your credit applications are turned down, your file will contain inquiries from the companies that rejected you. Your credit file will look like you were desperately trying to get credit, something creditors never like to see.

If you want to close some accounts, here are some rules to follow:

• Close accounts you don’t need. You can close an account even if you haven’t paid off the balance. The card issuer will close your account, cancel your privileges and send you monthly statements until you pay off your balance. Or contact the bank whose card you are keeping and ask it to transfer your remaining balance on the account you are closing to the account you are keeping.
• Close accounts on which you are delinquent — otherwise the credit card issuer may close them for you. If you’re delinquent on all your accounts, keep open the most current account.
• If you pay your bill in full each month—that is, you don’t carry a balance—close the accounts with the highest annual fees. Make sure that the accounts you keep open have a
  grace period—a 20-25 day period each month in which you can pay off your bill and not incur any interest.

• If you carry a balance, close the accounts with the highest interest rates and shortest grace periods. Also, read your contract to understand the credit card company’s billing practice. Interest may be calculated on the previous two months’ balance, the average daily balance for the month or your balance at the end of the billing cycle. Keep the cards that charge interest on the balance at the end of the billing cycle.

How to Cancel a Credit Card

If you want to close a credit card account, make sure you do it the right way.

• Write a letter to the company and request a “hard close.” If you don’t do this, the company may give you a “soft close,” which means new charges can go through, even though you asked that the account be closed. With a soft close, you are susceptible to credit card fraud.
• Also request, in writing, that the credit card company report to the credit bureaus that your account was “closed by consumer request.” Accounts that are erroneously reported as “closed by creditor” will hurt your credit rating.
• After 30 days, check your credit report to ensure that it reflects that the account in question was “closed by consumer request.”
  

Most free credit reports include a credit score on them as well. Credit scores are numerical calculations that are supposed to indicate the risk that you will default on your payments. High credit scores indicate less risk and low scores indicate potential problems. Most credit scores range from lows of 300–400 to highs of 800–900. The biggest credit scoring company, Fair, Isaac and Company, estimates that about 40% of Americans have scores over 750. Anything over 750 is considered to
be a very good score by most lenders.

Free Credit Score

Lenders use credit scores to help them decide whether you are a good credit risk for new credit, whether to increase or decrease an existing line of credit, to determine how easy it will be to collect on an account and even to project the likelihood that you will file for bankruptcy. Credit scores are used in about 80% of all mortgages as well as in car loans, credit cards and insurance policies. And your credit score not only determines whether you get a loan, but also what interest rate will be applied. If you get your Fair, Isaac credit score (see below), you can visit its website (at www.myfico.com), plug in your score and find out the prevailing mortgage interest rate that most lenders charge to people with that credit score.

Even though your score may determine whether you can get a loan, credit bureaus are not required to disclose your score to you (therefore, they won’t appear on a credit report that you order). However, change is on the horizon. A new California law requires that mortgage lenders disclose credit scores to consumers shopping for a mortgage. Other states or the federal government may enact similar laws in the future.

Another big improvement recently came from Free Annual Credit Reports who have voluntarily made credit scores available for a free. To get your Fair, Isaac credit score, visit FreeAnnualCreditReports.org. A few other companies that create credit scores
have followed suit. Trans Union now provides your credit score (at no extra charge) when you order a Trans Union credit report. Experian also offers a credit score product for $12.95.

Although being able to view your credit score is a significant improvement, the jury is still out on how helpful the score will actually be. It is likely that you will get different scores from different companies. And consumer experts are not certain that the score you order from the Internet will be the same one that lenders use to determine whether they will extend credit to you.

If you’ve been through bankruptcy or other tough financial times but your problems are behind you, or you’ve never had credit, you may be considered an excellent candidate for a credit card. Your creditors won’t tell you this. It’s an industry secret they’d like to keep that way.

Credit card issuers send out approximately three billion solicitations each year to American consumers. This number represents an enormous growth since the early 1990s. While the number of American adults hasn’t risen that dramatically, the number of American people now considered creditworthy has. And all of these credit cards can take a big toll on your free credit report.

Credit card issuers operate in a fiercely competitive environment. People who have been through bankruptcy are now considered great credit risks—their debt is gone, they have a history of using credit and they can’t file for bankruptcy again for another six years. In fact, a Texas bankruptcy judge asked a couple who filed for bankruptcy to keep track of how many credit card solicitations they received during the two-year period after they filed their case. The total: 53, with credit limits ranging from $100 to $20,000. Talk about damaging to your credit report.

And people who have been through bankruptcy aren’t the only people with stuffed mailboxes. New immigrants, low-wage earners and others traditionally kept out of the credit world are being invited to participate at astronomical rates, all of which will have a dramatic impact on their free credit report.

Beware of all these offers. They are not meant to be flattering nor are they a sign that you can afford more credit. Credit card issuers are looking for consumers who will run up big balances and pay a lot of interest. And in return you’ll end up with some stuff you don’t need and a low score on your free credit report.

Free Credit Report

Ranging all the way from 300 to 850, your credit score has a big impact throughout many areas of your life. Even though it cannot dictate what you cannot buy and what you can, credit scores often will make you see the difference between what you can afford to pay and what you can’t. Credit scores are what appears on your Free Credit Report and are very easy to obtain. However, these guidelines are usually set in place by the creditors who are loaning money to you in the first place. If they see you as a major credit risk then you might not be so lucky to obtain a large loan, mortgage amount, or other credit line. However, the opposite is true because if you have a good credit score on your free credit report and are seen as less of a credit risk than creditors and others who make loans will be more apt to loan you the full amount that you want.

Chances are that you already know the basic way a credit score works it appears on your free credit report. If you have a low credit score that’s only near the 300-level scores then you probably have already tried, with many unsuccessful attempts, to get a hold of a credit card or other credit line. Individuals who have that low of a credit score are those who are seen as a major credit risk because they have had a history of not repaying their creditors. If you’ve been careful about maintaining a perfect credit score then chances are that you have a credit score above 800 on your free credit report and can obtain any loan or credit card that you want.

But what does a credit score really mean? Does it simply mean that creditors won’t loan to you if you have a low credit score? Absolutely not! There are some situations where an individual may have a low credit score on their but has already cleaned up their free credit report and are well on their way to financial freedom! As with many things, past performance is a good indicator of future performance, and even though creditors do look at your past performance and history of paying bills, they usually take into account other situations if there are explanations that are needed.

However, people with a high credit score sometimes don’t have the best of options, either! For example, let’s consider an individual who currently has a high credit score and lots of creditors on their credit report. However, what would happen if they find that they cannot repay their current debts each month? For those individuals, their credit score number will probably more than likely begin to fall if they don’t continue to pay their credit card bills and other financial obligations.

Altogether, credit score numbers are simply a way for creditors to be able to have a glimpse into your lifestyle and to know what financial background you are coming from. Many creditors and loan makers will scrutinize your credit score number, but others will simply use it as a guideline to judge whether or not they should risk lending you money or another form of a credit line. Even though a low credit score on your free credit report can doom your ability to obtain credit, you still have a chance if you are in the process of cleaning up your report and finally paying back what you owe! Credit score numbers are not a death sentence but should be paid attention to carefully if you do want a loan sometime in the near future!

If you are interested in getting your Free Credit Report, head on over to Free Annual Credit Reports and get yours online in less than 5 minutes!

Credit Monitoring Services

In the US, millions of people fall prey to identity theft crimes each year. In fact, nearly 10 million Americans are a victim of identity theft crimes committed, but nearly half of those victims either realize that they are victims are have realized it too late. There are many credit monitoring products on the market in today’s era and there are companies out there who claim that they will monitor your credit score, free annual credit report, and they will even alert you if anything major happens that is suspicious activity. These companies actually do a lot of business throughout the year and they prevent many identity theft and errors to credit reports every day.

However, is credit monitoring necessary and are those who are paying for it truly benefiting from the company monitoring their credit report and credit score each day or is it simply not necessary to have these luxuries? Many people who have used these types of credit monitoring services will actually tell you that there is nothing better than feeling safe that you are protected from the identity theft cases that happen each year. But let’s look at the reasons that you may want to get credit monitoring services and the reasons that you may not need it.

1. The very first thing that you should consider, and perhaps the most obvious one, is that you may be safer with credit monitoring services. When individuals fall prey to identity theft crimes sometimes the crime goes unnoticed for a year or more at a time. These are the individuals who are at a loss. Credit card and other credit line companies will sometimes have no recourse for those individuals who have been a victim simply because they let it go for more than a year at a time! But those who have credit monitoring and error prevention companies checking on their credit report daily will more than likely catch the damage in time!

2. Another thing that you should consider when thinking about obtaining credit monitoring services is whether or not you’ll like having someone else or some other company scrutinizing your credit report on a daily basis. Many people prefer to look at their credit reports themselves, and for those people credit monitoring services are simply not needed! Also, who is to say that the credit monitoring companies will know if you are the one who made a change to your credit report or if it was someone else. For the sake of being completely and 100% protected against identity theft crimes, the absolute best thing to do would be to look at your credit report by yourself!

Altogether, whether you obtain credit monitoring services that detect errors and identity theft crimes in your credit report is a matter of choice and no one should force you into the decision! There are many positive aspects about these types of companies, but some of the downsides with these types of services are also very evident! There is simply no fool-proof way to prevent identity theft crimes without being very cautious; the most a credit monitoring agency could do is to alert you to the situation and stop the crime in its tracks, but you are equally capable of doing just that!

The best way to stay on top of your credit report is by checking it frequently. At Free Annual Credit Reports, we give you instant access to your free annual credit report and credit score.

What is My Credit Score?

What is my Credit Score?
Is my Credit Score high enough?
Do I have good enough Credit?

Every financial planner will tell you that the number one thing that you need to protect is your free annual credit report. However, how are the credit scores on this report calculated? A variety of credit-scoring statistical models are used to generate credit scores, each of which used unique algorithms. The primary source for credit scores used in mortgage lending decisions are the three national Credit Reporting Agencies: Transunion, Equifax, and Experian. These Bureau collectively store over 450 million files on individual consumers and process over 2 billion pieces of consumer credit data each month. Each bureau has a number of exclusive proprietary credit-scoring models that generate unique credit scores, and consequently, consumers can have more than one credit score.

Credit-scoring models are based upon credit reports of consumers who have acquired credit in the past. These credit reports are statistically analyzed to identify characteristics that predict the likelihood of debt repayment. Each of these characteristics is then assigned a weight based on how well it predicts the likelihood of repayment.

Four categories of data are collected and reported in a credit report: personal information, credit information, public record information, and inquiries. The three credit bureaus independently collect data used to build a consumer credit report.

Five general categories of data are gathered from credit reports and used in credit-scoring models: previous payment history, amount of money owed, length of credit history, amount of new credit sought, and types of credit in use. In accordance with the Equal Credit Opportunity Act, factors include gender, income, race, religion, marital status, and national origin may not be used in credit-scoring models.

Credit scores represent a snapshot of the consumer’s credit history at the time the credit score is generated. Bureaus continually receive new information and update credit report files, and, therefor, consumers’ credit scores can frequently change.

If you are interested in getting a copy of your Free Credit Scores, head over to Free Annual Credit Report and get yours in less than 5 minutes.

Negative Credit Report Repair

What is negative credit and how is it repaired? Negative credit is added to your credit report when you do not live up to your financial obligations. It ends up on your credit report in several different ways. Most of the negative items are due to financial missteps such as paying a credit card off late or forgetting about those student loans from ten years ago. Other times, it may be because of errors on the behalf of the credit bureaus or due to fraud and identity theft. We’ll look at each of these instances in more detail and analyze the affect that they have on your free annual credit report.

Financial mistakes are the most common cause of negative and bad credit and are caused by actions on your part. This might be something as simple as missing a bill and forgetting to make the payment or something as severe as losing your job which leads to home foreclosure and bankruptcy. Pretty much anything that results in a late payment or collection will show up as a negative item on your credit report.

Errors can be caused in many ways. A loan payment is made on time but the bank made an error when they credited it or what amount. Or maybe a credit reporting bureau entered incorrect information on your free credit report and credit score. These are both examples of the types of errors that may occur.

Fraud occurs whenever someone else uses your social security number on a credit application and assumes your identity. By doing this, the lender is accessing your credit report and will make a decision based upon it instead of on just your actions. If the person doing this is committing fraud, that person will use that credit card until it is full and then walk away from it. When the bank doesn’t get paid, it reports to the credit reporting agencies that you are in default and you now have a negative credit entry through no fault of your own. Abuses are a subset of fiscal missteps. Basically abuses are usually credit card abuses. Some people have trouble controlling their spending and soon find that they have $20,000 or more in credit card debt and not enough money to cover the bills. These abuses generally end in bankruptcy and destroy a person’s credit rating for a very long time.

The good news is that no matter which combination of the above problems faces you there are solutions. You can definitely remove 100% of all efforts and frauds with a few letters. Any you will find that many of your personal problems can also be removed fairly easily. And, if you are not 100% successful, there are always simple ways to rebuild your credit in a reasonably short period of time.

The easiest way to get started with repairing your negative credit is by acquiring your Free Annual Credit Report and ensuring that all of your information is accurate and correct.