November 06, 2009

The Big Three

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The Big Three
You can improve your rates and save thousands on your loan by improving the three most important loan factors.
Credit score target – above 650
How to meet the target –
 Clear inaccuracies from your credit report
 Pay your bills on time for at least 6 months
 Avoid unnecessary applications for credit
 Reduce your debts to below 35% of their credit limits
Debt-to-income ratio target – 20-30%
How to meet the target –
 Pay off small loans
 Reduce your credit card balances
 Increase your income by co-signing with your spouse
Loan-to-value ratio target – less than 80%
How to meet the target –
 Increase your down payment to at least 20% of your new home or car's value
 Negotiate to reduce the price with the seller

Select a less expensive home or car to purchase


This Free Credit Tip is brought to you by

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* This is not legal advice. Consult an attorney for all legal advice.



October 06, 2009

Credit And Divorce

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Credit and Divorce

Mary and Bill recently divorced. Their divorce decree stated that Bill would pay the balances on their three joint credit card accounts. Months later, after Bill neglected to pay off these accounts, all three creditors contacted Mary for payment. She referred them to the divorce decree, insisting that she was not responsible for the accounts. The creditors correctly stated that they were not parties to the decree and that Mary was still legally responsible for paying off the couple's joint accounts. Mary later found out that the late payments appeared on her credit report.

If you've recently been through a divorce - or are contemplating one - you may want to look closely at issues involving credit. Understanding the different kinds of credit accounts opened during a marriage may help illuminate the potential benefits - and pitfalls - of each.

There are two types of credit accounts: individual and joint. You can permit authorized persons to use the account with either. When you apply for credit - whether a charge card or a mortgage loan - you'll be asked to select one type.

Individual or Joint Account

Individual Account: Your income, assets, and credit history are considered by the creditor. Whether you are married or single, you alone are responsible for paying off the debt. The account will appear on your credit report, and may appear on the credit report of any "authorized" user. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), you and your spouse may be responsible for debts incurred during the marriage, and the individual debts of one spouse may appear on the credit report of the other.

Advantages/Disadvantages: If you're not employed outside the home, work part-time, or have a low-paying job, it may be difficult to demonstrate a strong financial picture without your spouse's income. But if you open an account in your name and are responsible, no one can negatively affect your credit record.

Joint Account: Your income, financial assets, and credit history - and your spouse's - are considerations for a joint account. No matter who handles the household bills, you and your spouse are responsible for seeing that debts are paid. A creditor who reports the credit history of a joint account to credit bureaus must report it in both names (if the account was opened after June 1, 1977).

Advantages/Disadvantages: An application combining the financial resources of two people may present a stronger case to a creditor who is granting a loan or credit card. But because two people applied together for the credit, each is responsible for the debt. This is true even if a divorce decree assigns separate debt obligations to each spouse. Former spouses who run up bills and don't pay them can hurt their ex-partner's credit histories on jointly-held accounts.

Account "Users"

If you open an individual account, you may authorize another person to use it. If you name your spouse as the authorized user, a creditor who reports the credit history to a credit bureau must report it in your spouse's name as well as in your's (if the account was opened after June 1, 1977). A creditor also may report the credit history in the name of any other authorized user.

Advantages/Disadvantages: User accounts often are opened for convenience. They benefit people who might not qualify for credit on their own, such as students or homemakers. While these people may use the account, you - not they - are contractually liable for paying the debt.

If You Divorce

If you're considering divorce or separation, pay special attention to the status of your credit accounts. If you maintain joint accounts during this time, it's important to make regular payments so your credit record won't suffer. As long as there's an outstanding balance on a joint account, you and your spouse are responsible for it.

If you divorce, you may want to close joint accounts or accounts in which your former spouse was an authorized user. Or ask the creditor to convert these accounts to individual accounts.

By law, a creditor cannot close a joint account because of a change in marital status, but can do so at the request of either spouse. A creditor, however, does not have to change joint accounts to individual accounts. The creditor can require you to reapply for credit on an individual basis and then, based on your new application, extend or deny you credit. In the case of a mortgage or home equity loan, a lender is likely to require refinancing to remove a spouse from the obligation.


This Free Credit Tip is brought to you by

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* This is not legal advice. Consult an attorney for all legal advice.

September 23, 2009

Preventing Fraud and Identity Theft

Preventing fraud and identity theft

Here are some simple ways you can significantly reduce your chances of becoming a fraud victim:

  • Do not carry your extra credit cards, Social Security card, birth certificate, or passport in your wallet or purse except when necessary. This practice minimizes the amount of information a thief can steal.

  • Install a lockable mailbox at your residence to reduce mail theft.

  • Take credit card receipts with you. Never toss them in a public trash container.

  • Never leave your purse or wallet unattended at work or in church, restaurants, health fitness clubs, parties, or shopping carts. Never leave your purse or wallet in open view in your car, even when your car is locked.

  • Destroy all checks immediately after you close a checking account. Destroy or keep in a secure place any courtesy checks that your bank or credit card company sends to you.

  • Do not have your bank send your new checks to your home address. Tell the bank that you prefer to pick them up.

  • Reconcile your check and credit card statements in a timely fashion. Immediately challenge any purchases you did not make.

  • Limit the number of credit cards you have and cancel any inactive accounts.

  • Never give any credit card, bank, or Social Security information to anyone by telephone, even if you made the call, unless you can positively verify that the call is legitimate.

  • Minimize exposure of your Social Security and credit card numbers. If the numbers are requested for check-cashing purposes, ask if the business has alternative options such as a check-cashing card.

  • Do not allow your financial institution to print your Social Security number on your personal checks.

  • Safeguard your credit, debit, and ATM card receipts. Shred them before discarding.

  • Scrutinize your utility and subscription bills to make sure the charges are yours.

  • Memorize your passwords and personal identification numbers (PINs) so you do not have to write them down. Be aware of your surroundings to make sure no one is watching you enter your PIN.

  • Keep a list of all your credit accounts and bank accounts in a secure place so you can quickly call the issuers to inform them about missing or stolen cards. Include account numbers, expiration dates and telephone numbers of customer service and fraud departments.

  • Do not toss pre-approved credit offers in your trash or recycling bin without first tearing them into small pieces or shredding them. Dumpster divers can use these offers to order credit cards in your name and mail them to their address. Always do the same with other sensitive information like credit card receipts and phone bills.

  • Avoid credit repair scams. If you are tempted to contact a credit repair company for help, use considerable caution. The FTC and a number of state attorneys general have sued credit repair companies for falsely promising to remove bad information from credit reports. Only inaccurate information may be removed from your credit report; negative information that is accurate (such as a bankruptcy filing or a defaulted loan) will stay on your credit report as long as governing laws allow.

    Under Federal law, if you believe any item on your credit report is inaccurate or incomplete, and you notify us, we will re-verify the information at absolutely no cost to you. Please note that we do not accept disputes from third parties unless accompanied by a notarized power of attorney that authorizes a licensed attorney or a family member to represent you, or if the power of attorney is unlimited and irrevocable.

This Free Credit Tip is brought to you by

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*The info above is not legal advice . For all legal advice use the services of an attorney.



August 07, 2009

How Can I Boost My Credit Score?

How Can I Boost My Credit Score?



There are mutiple ways to boost your credit score. The first way is to pay your bills on time. This may seem obvious but it's something many people don't practice. Collections, charged off credit cards, utility bills etc. can lower your credit scores 50 or even 100 points. Big drops in your scores can mean you will pay much higher interest rates on loans if you can get one at all.

The second way is to establish good installment and revolving credit accounts. An example of an installment credit account would be a home or an auto loan. These loans have set payoff dates and the interest is calculated differently than a revolving credit account. Examples of revolving credit accounts are credit cards and home equity lines of credit. These accounts have no set payoff date. Even if you have bad credit you can get a secured credit card and start rebuilding your credit. Use caution with your credit cards if you carry a balance over 50% of your total credit line it will lower your credit score.

Want to learn more about how credit works? Visit us at and get our free Credit Tips Newsletter.

July 23, 2009

Disputing Information in Your Report

Disputing Information in Your Report

It's possible for incorrect, incomplete or outdated information to appear on your credit report. If it does, it can drastically lower your chances of getting the loans, credit cards, and other credit products you would like. If you find an error, take the following steps as soon as possible. If you see evidence of fraud, contact the credit reporting companies immediately. Explain the situation and ask that a fraud alert be placed in your file. Also report the fraud to the police, and your creditors.

1. Contact the credit reporting company

Contact the credit reporting company that is reporting the item in question. It is helpful for you to have a printed copy of your credit report from them. You may be eligible to receive it free of charge.

After you advise the credit reporting agency of the information that you dispute and why, the credit reporting company will review it. If you have any documentation that supports your position also send that to the credit reporting agency. If further investigation is required, the credit reporting agency will provide notification of what you're disputing to the source that furnished the disputed information to them.

The source of the disputed information will review the information, conduct its own investigation, and report back to the credit reporting agency. The credit reporting company will then make all appropriate changes to your credit file based on the investigation, and notify you of the results of the investigation and any changes that were made to your credit report.

2. Contact the Creditor Regarding the Problem

In some cases, you should contact the appropriate creditor or lender before contacting a credit reporting company. This is especially true if you are a victim of identity theft or fraud. You should also contact the appropriate creditor or lender if that source has verified the information that you disputed with the credit reporting company. Most large creditors have standard procedures for customers to dispute items about their accounts with them. If you have proof that the item in question is incorrect, it should be resolved quickly.

If the creditor finds that the disputed information is indeed incorrect, the creditor is required by federal law, the Fair Credit Reporting Act, to update its records both internally and with the credit reporting companies to which it reported the disputed information, usually within 30 days.

Always follow up your phone calls with a letter. List each disputed item, and state how it is inaccurate, attaching copies of all relevant documents. Include your full name, account number, the dollar amount in question, and the reason you believe the item is wrong. Be concise.

3. Contact the Other credit reporting companies

If you find an inaccuracy with one credit reporting company, you may want to get your credit report from the other two credit reporting companies to see if their credit reports contain the same error. After you've corrected an error with one credit reporting company, the other credit reporting companies will in most cases also receive the corrected information. But for prompt correction, it's best to contact each of the three major credit reporting companies yourself.

4. Ensure the Error Is Fixed

Within 30 days (45 days if based upon your annual free credit file), the credit reporting company should notify you of the results of its investigation. You'll need to obtain a new copy of your credit report to make sure that the inaccuracies have been corrected or removed.

If the disputed information has been resolved, you can have the credit reporting company notify anyone who received a credit report with the inaccurate information in the past six months (two years in the case of employers) of the corrections that have been made.

5. If You Cannot Resolve a Disputed Item

You have the right to file a brief statement with the consumer reporting company, free of charge, explaining the nature of your disagreement. The consumer reporting company may limit your statement to not more than 100 words if it provides you with assistance in writing a clear summary of the disagreement. Your statement will become part of your credit report, and will be reported each time your credit report is accessed, for as long as the disputed item remains in your credit report.


June 29, 2009

Checking Your Credit Could Raise Your Score


(ARA) - The average American's credit score is about 620, but during a recession and credit crisis, average isn't good enough when it comes to getting a loan. In the current economic climate, most lenders consider a credit score of 720 or higher a must in order to be approved for a mortgage or a loan.

It's important to know the top factors that affect your score and check your credit report for errors, which are increasingly common. Here are the best ways to raise your credit score in three simple steps:

1. Pay on Time
The most important factor to a potential lender is whether or not you will pay your bills in full and on time. Schedule bill payments on your calendar or pay your bills as soon as you receive them. Remember that paying your bills comes before luxuries like going out to dinner or buying new clothes.

2. Use a Variety of Credit
A variety of credit, such as mortgage loans and credit cards, can show that you are responsible for repaying both large and small financial promises. Make sure to use credit responsibly and don't run up credit card debt that you can't pay off immediately or within a few months.

3. Keep Accounts Open
It's never a good idea to open a credit card just to take advantage of a discount or a freebie, then close it right away. The longer your credit history, the higher your credit rating tends to be.

To see all of the factors that affect your personal credit score, you should check your credit report at least every six months. Using a site like instantly gives you a free, detailed and personalized analysis of your credit report with advice on how to improve it. Checking your own credit report at will not hurt your score.

Your credit report will show you details like accounts with past late payments, the various types of credit you've used, current balances and recent requests for credit. If you find negative or wrong information on your file, you can dispute it and have it removed. The longer these items stay on your credit file, the lower your credit score will become.

With good bill paying and credit habits, and by keeping an eye on your credit report, you can work to raise your credit score. Raising your score from the national average of 650 to a more ideal 720 can help you obtain a car loan or mortgage and get a better rate on your loan and credit cards. The better your credit score, the less the term "credit crunch" will apply to you.

For more information and tips on how to raise your credit score, visit

Courtesy of ARAcontent

May 28, 2009

Tips for Coping with the Credit Crunch

(ARA) - Concerned about the credit crunch? It's understandable if you are, since financial experts are broadly predicting that the crunch is only going to get worse, even for those with unblemished credit reports. In this economy, it's more important than ever to be pro-active about monitoring your credit score.

You need to check your credit report regularly, and not wait until you'll be applying for new credit, like an auto loan, mortgage or even a credit card. Knowing what's on your credit report could mean the difference between getting favorable or less-than-favorable terms the next time you apply for credit. It's the first step toward reaching your personal financial goals.

Still not sure you need to monitor your credit report? Consider these facts:

Ignorance is not bliss when it comes to your credit report. While the credit bureaus strive to provide the most accurate information possible, they can't do it alone. They need consumers to keep an eye out for errors and alert them right away when one occurs. If you're monitoring your report regularly, you're much more likely to catch and correct errors right away - before they can affect your credit standing.

Identity theft continues to rise, and in a down economy is likely to become an even greater problem. Multiple studies indicate that the average ID theft victim spends around 40 hours to correct the damage done by identity thieves. While the majority of identity theft still occurs in traditional ways - stolen trash or mail - Internet-based ID fraud is on the rise. Your credit report is an important tool in helping you catch and correct identity theft early.

With the credit crunch playing out in markets across the country, consumers need to develop and nurture smart credit habits. Wise credit moves include:

* Paying bills on time every month. Or, if you're having trouble paying all your bills, working with creditors in good faith to establish livable payment terms - and preserve your good credit standing.

* Pay down highest interest debts first, since they cost you the most over the long-term.

* Or, if you have debt with a low balance that you can pay off relatively quickly, do so. It will illustrate to potential lenders that you pay off your debts, plus you'll enjoy the emotional bounce you get from lightening your debt.

* Monitor your credit report regularly. Signing up with services like can give you more control over your personal finances. Checking your credit report online simplifies the confusing world of credit information to give you more control over your personal finances.

* If you find errors or evidence of fraud on your credit report, quickly notify the credit bureaus in writing, and work with them to remove incorrect information from your record.

Courtesy of ARAcontent

April 21, 2009

What is a Credit Report?

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What is a Credit Report?

Equifax, Transunion and Experion are the credit reporting agencies in the United States . Each maintains information about you and your credit history. This information is gathered on an ongoing basis from many sources that have extended you credit.

Lenders, employers, landlords, and other service providers buy that information in the form of a credit report to help them decide whether to approve your application for a loan, credit card, job, or housing, or to offer you a product or service at a particular rate.

Because your credit file changes constantly, it's important that you review your information regularly to check its accuracy. Any positive or negative entries will impact your credit score.





What Information is Included?

Personal information. Compiled from credit applications you've filled out, this information normally includes your name, current and recent addresses, Social Security Number, date of birth, and current and previous employers.


Credit history. The bulk of your credit report consists of details about credit accounts that were opened in your name or that list you as an authorized user (such as a spouse's credit card). Account details, which are supplied by creditors with which you have an account, include the date the account was opened, the credit limit or amount of the loan, the payment terms, the balance, and a history that shows whether or not you've paid the account on time. Closed or inactive accounts,depending on the manner in which they were paid, stay on your report for 7 to 11 years from the date of their last activity.


Inquiries. Credit reporting agencies record an inquiry whenever your credit report is shown to another party, such as a lender, service provider, landlord, or insurer. Inquiries remain on your credit report for up to two years.


Public records. Matters of public record obtained from government sources such as courts of law -- including liens, bankruptcies,and overdue child support -- may appear on your credit report. Most public record information stays on your credit report for 7 years.

What is Not Included?

A credit report does not include information about your checking or savings accounts, bankruptcies that are more than 10 years old, charged-off or debts placed for collection that are more than seven years old, gender, ethnicity, religion, political affiliation, medical history, or criminal records. Your credit score is generated by information on your credit report, but is not part of the report itself.

Who Can Look at Your Credit Report?

Anyone with what is considered a permissible purpose can look at your report. These companies, groups, and individuals include:

  • Potential lenders
  • Landlords
  • Insurance companies
  • Employers and potential employers (usually only with your written consent)
  • Companies you allow to monitor your account for signs of identity theft
  • Some groups considering your application for a government license or benefit
  • A state or local child support enforcement agency
  • Any government agency (although they may be allowed to view only certain portions)
  • Someone who uses your credit report to provide a product or service you have requested
  • Someone that has your written authorization to obtain your credit report

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*The info above is not legal advice . For all legal advice use the services of an attorney.