Credit Score Scale

Credit scores range anywhere from approximately 850 to 350. The highest I have personally seen was 849 and the lowest was 375 and I have looked at 1000′s of credit reports over the years.

Any credit score over 700 you could consider excellent. 680 is not bad either, it is good, just not excellent. Who says what is excellent? One guide you could go by is a mortgage requirement of 740. To get the absolute best mortgage rates you need to have credit scores more than 740. That is to say you need to have a middle score greater than 740.

Yes, there are three credit scores, one from each of the credit bureaus: TransUnion, Equifax, and Experian. Chances are, you will not get the same credit scores from each of the three bureaus as they each tweak their credit scoring process just a little different from each other.

For information on how to fix your credit visit: Fix My Credit With Credit Repair

How To Dispute Credit Report Errors

If you have recently applied for a mortgage and gotten some bad news about your credit report that you think you should dispute then this post is for you. Disputing errors on a credit report is a major part of the credit repair process. More information on What Is Credit Repair – The Basic Steps of Credit Repair.

• Step 1 Review Your Credit Report – The first place to start is with your credit report. If you have not gotten a copy of your report then you need to get a copy so you can review it. If you have gotten a copy of it, review your report and make detailed notes regarding any errors you see.

• Step 2 Make Sure You have Proof of the Error – Technically, US Credit Laws require credit bureaus to report accurate information on your credit report. Your creditors report information to the credit bureaus and without opposing information credit bureaus basically assume that information is accurate. As this is the case, if it is wrong it will stay there until it is corrected either by you or the creditor. If you have proof of the errors you need to supply it with your dispute. Make sure you only give the credit bureau copies of any paperwork you send them – keep your originals.

• Step 3 Must Dispute Each Mistake On Each Bureau – If you find the same mistake on several bureaus, you must write your dispute letter to each bureau and supply them with the proof you are using to dispute the errors.

• Step 4 Additional Information To Send With Your Dispute – there is a minimum amount of information that you will need to supply with your credit report dispute letter.

1. Copy of your driver’s license or state ID card – helps to prove your identity and provides correct home address
2. Copy of Social Security Card – help prove your identity and ties you to your credit account
3. The full name of the creditor or collection agency
4. The account number and name for the account you are disputing
5. Short, to the point, concise reason for dispute (each dispute must have this explanation)
6. Fully copy of your credit report

• Step 5 Pick how you want to dispute your credit report – you can do it online, or by mail. You may want to do it both ways to ensure the credit bureaus get your information. Below are the phone numbers, links to each credit bureaus dispute resolution department, and the mailing address for submitting your credit report disputes by mail. If you have questions about whether your dispute would be better filed through the mail or online – pick up the phone and call the bureaus and ask them. If you want help on what to include in your dispute, you can also call the specific credit bureau to find out what you need to send.

Contact numbers and online dispute sites:

• Equifax: (800) 685-1111 (Equifax.com Disputes)
• Experian: (888) 397-3742 (Experian.com Disputes)
• TransUnion: (800) 888-4213 (Trans Union Disputes)

Fixing errors on your credit report by mail:

What follows is a list of addresses for the major credit reporting agencies.

Equifax Information Services, LLC
P.O. Box 740256
Atlanta,GA 30374

Experian
P.O. Box 2104
Allen, TX 75013-0949

TransUnion Corp.
P.O. Box 2000
Springfield, PA 19022-2000

You should receive a letter in approximately 4-6 weeks regarding the status of the dispute. Mark the date you sent your dispute on your calendar, and keep detailed records in case there are any further problems. See Sample Credit Dispute Letter

Finding Errors On Credit Report

Filing a credit report dispute letter is an important part of the process to improve your credit scores and credit report. You will want to ensure that you include the following items as a minimum in your dispute letter for every credit account you dispute:

What To Include In Credit Report Dispute Letter

• Full name, SSN, Home address
• Credit Account Name
• Credit Account account number
• Indicate what you are disputing – what is actually written on your credit report
• Indicate what you say it should be
• Reference written proof that you enclosed to counter what is on your report from the creditor
• Indicate how you would like the report to read – they may not change it to that, but it is worth a try
• Reference that you have included a copy of your credit report

Sample of Dispute Letter to send to Credit Bureau to Dispute Errors on your Credit Report (FTC sample)

Date
Your Name
Your Address
Your City, State, Zip Code

Complaint Department
Name of Company
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute also are circled on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records and court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,
Your name

Enclosures: (List what you are enclosing)

Note: Only send copies of your original documents – somehow things seem to get lost, and you will never get back what you sent.

Get more information on what to include in your credit dispute letter from the FTC.gov.

What Bills Can We Pay To Improve Our Credit Scores?

Can I fix my credit and improve my credit scores to get approved for better mortgage interest rates and loan programs? The answer is yes, and you can do it several ways. You can hire a credit repair company or you can do some things yourself to fix your credit.

What does Fix My Credit really mean?

To fix your credit implies that there is something wrong with your credit report. While there may be something wrong with your credit report, like credit card account reporting errors, you could just have recent credit inquiries, newly established accounts, or high balance to limit ratios that are pulling your credit scores down.

So Fixing Your Credit Report and Credit Scores simply means:

• Correcting inaccurate or wrong information on your credit report
• Establishing some type of new account and letting it season on your credit for 6 months
• Letting time pass from recent credit activity and paying down balances.

Find more ways to fix your credit visit:  Fix Credit Report – 7 Ways to Improve Your Credit Scores

How Long Does It Take to Fix My Credit?

The smart safe answer to this question is anywhere from 1 month to up to 12 months or more depending on what has happened to your credit. In the case of a bankruptcy or foreclosure you can count on 24-48 months of recovery time once the negative credit hits your credit report. Your recovery time will also depend on how well you pay your other bills. In all cases, pay your bills on time – you will see a shorter recovery time.

Steps to Fixing Your Bad Credit

Establish Secured Credit Card Account – One step to take is to get a secured credit card account from your bank. Many banks have these accounts. You will need to set aside $300-500 that the bank will hold on your behalf and they will issue you a VISA or MasterCard against your set aside. You do need to make sure that your bank reports activity to the credit bureaus. You need to work with a bank who will report activity to the credit bureaus.

Use Your Credit Wisely and Timely – If you are new to having a credit card, use it for gas and food during the month instead of paying cash and then pay it off at the end of the month. An inactive credit account does not help your credit scores improve.

Pay Your Bills On Time – Do not be late on paying your bills. This is the biggest factor in why credit scores go bad. It is also one of the biggest underwriting considerations is how often have you been late in the past 12-24 months. If you are going to move from one place to another, do not let your mail lapse so that you miss getting your bills.

Stopping Letting People Pull Your Credit – Too many credit inquiries can kill your credit scores. This is especially true if you do not have a big credit history. More history with more accounts, inquiries will not impact you like having little credit. If you have gone through a period of credit inquiries, go through a few months of not letting anyone pull your credit.

Keep Old Accounts Active and Alive – If you have an old credit card that you do not use, but keep for emergencies, you should consider using it. Activity matters on a credit account. Also, do not close it out if you can help it. Length of credit history is a factor in your credit scores.

For GetPreQualified.com for additional information on how to fix credit.

Reviewing Credit Card Company Agreement

The Senate had already passed the sweeping credit card reform bill and now the House of Representatives has passed it too. Now the bill goes to President Obama for his signature, which news sources are suggesting he’ll sign into law on Friday, May 22, 2009 just before the Memorial Day Holiday.

This is certainly good news for most credit card holders no matter whether they carry balances or pay their credit card off regularly. No matter what, at some point along the way most people have some sort of run in with their credit card company. Problems can range from unexpected pesky annual renewal fees, over limit fees, late payment fees, incorrectly reported information etc. Couple this with the unexpected job layoff or illness and nobody is really safe from their credit card company policies.

There is some speculation about how credit card companies will respond to the new changes. They stand to loose a chunk of profits to the tune of around $15 billion in penalty fees on an annual basis. Some industry experts think that annual fees will be increased and perhaps even rewards programs may be cut back in response to make up for lost revenues. We think it may lead to even better benefits for on time paying customers as competition for accounts may be more fierce. We will all just have to sit back and see what happens.

For more detailed information on changes heading our way visit: Credit Card Changes On The Way – New Rules May Lead To Improving Credit Scores

Once the bill is signed into law by President Obama, the effects of the bill will not go into action until 2010.

Credit Card Rules Squeeze Credit Card Companies

Credit Card changes can lead to credit score improvement as credit card companies must give longer lead times for payments and notification of interest rate changes. With this in mind, consumers who get into short term trouble might be able to take action to save their credit report and credit scores because they will have a little longer time to act.

All of this is becoming possible because of the incredible bi-partisanship shown on May 19, 2009  in the US Senate when the Senate voted 90-5 in favor of a massive sweeping credit card reform bill. With the bill passing the Senate it is expected to move through the house fairly quickly and get to the pen of President Obama perhaps as quick as the Memorial Day holiday. This bill as it gets passed by Congress and signed into law by Obama will will likely change the way almost every credit card company operates.

What Credit Card Changes Can You Expect?

With the House still needing to vote on the bill, it is not exactly clear what will be the final version of the credit card reform bill we get. We do expect these changes to not take effect until sometime in early 2010. We will keep you posted as soon as we find out more. But here is what we know so far:

• Banks may have to wait until you are 60 days late making the minimum monthly payment until they can impose penalty interest rates to your outstanding balance. With a longer time period consumers have some time to take action on getting their balance paid down or caught up before higher payments set in. This could alleviate significant drops in credit scores if the consumer is able to take corrective measures.
• You will have a 45 day window of being notified about interest rate changes and when the credit card company actually changes your rate for whatever reason. This will give you time to perhaps get a new card, or paydown your balance to avoid significant changes in your monthly minimum payment.
• Your credit card company must send your bill 21 days before your minimum monthly payment is due. This is designed to give consumers a little more time to make their payment which should reduce the overall amount of money consumers are paying in late fees.
• Credit card companies can no longer set the cut off time for payments received in the morning. They must allow for the mail and close of business. Additionally, if your due date falls on a Sunday or holiday, then payment received the next day is not considered late. This change should also reduce the overall amount of late fees consumers pay their credit card companies.
• In the case where you have different interest rates for different types of credit use on your credit card account like a purchase balance and cash advance balance and you make an over payment from your minimum payment, the excess money must be paid on the highest interest balance.
• Credit card companies can no longer allow you to spend over your limit and then charge you a “over the limit fee” without your consent. Many credit card companies just have the standard policy where they allow over the limit charges automatically and automatically charge the fee without you knowing about it until your bill comes in the mail.
• Persons under the age of 21 must have parent, legal guardian, or spouse who is older than 21 be the primary card holder on the account. Sorry to the college students and those credit card companies who sell credit cards on campus. No more tshirts. The exception may be where the student has their own income in which case they may be able to get a card on their own if approved by the credit card company.

There are also some changes coming for the gift cards that we all love. But we not cover them in this post as they have nothing to do with your credit scores.

These seem to go in our favor, our being consumers. If this passes the House perhaps some good will come of it. Let’s hope the credit card companies do not eliminate the frequent flyer miles for those of us who pay our cards on time and off every month. We’ll keep you posted with any more news on this.

Use Debt Settlement To Get Rid Of Debt

One way to get rid of credit card debt and improve credit scores is with debt settlement. Debt settlement is the process of negotiating with your credit card companies to get them to settle what you owe them for less than what you owe them. Generally, you can only use debt settlement once your credit has gone bad and you have bad credit scores. If you are still making your credit card payments on time debt settlement is not likely going to work for you. Your option for having good credit and settling your credit card debt is through consumer credit counseling.

Debt Settlement To Get Rid of Credit Card Debt – How It Works

Debt settlement is generally handled through a third party who handles your money and negotiates with your creditors and collection agencies on your behalf. There are debt settlement companies and debt settlement attorneys. Either one is fine, but you need to check whoever you want to use to make sure they are legitimate. Check with the Better Business Bureau and do some looking around online for complaints against the company. If they are bad, you will find information about them.

Once you start a debt settlement program, you will make monthly payments into a bank account that is set up by the debt settlment company/attorney on your behalf. As you make payments into your account, you will build up money. You can think of this as a forced savings account. Once you start to get some type of balance to work with in your account, the settlement company or attorney will then begin negotiating with your creditors to have them take some payoff of what you owe them.

You debt settlement company or debt settlement attorney will work through your accounts one by one until they have paid them all off over time. The whole process should take up to a maximum of 3 years. During the process as your collection accounts get paid, and your credit card debt gets paid your credit scores will improve. Also at the end of the three years you will be debt free. At that point, it will be up to you to use your money and credit responsibly to keep yourself out of debt.

Correct Inaccurate Account Information On Credit Report

Every credit report has basically the same things on it: your name, address, credit accounts, payment history, delinquent account information etc. See more items found on a credit report. While most of the information might be accurate and correct some credit reports have errors and inaccuracies that can be fixed. Some information that you correct may not have any effect on raising your credit scores, but some items will certainly have an impact on fixing your credit report.

Key Items to Examine When Fixing Your Credit Report

• Late payments, collection accounts, charged-off credit cards
• Incorrect credit limits, credit card accounts that indicate how they were closed inaccurately
• Creditor notes on your accounts that list “settled”, “paid derogatory”, “paid charge-off” or anything that is not noted as “current” or “paid as agreed” as agreed in arranging a pay off agreement.
• Accounts included in a bankruptcy that were discharged that still show balances or payments – they should be updated to $0 balances and $0 payments or noted with “included in bankruptcy” or “discharged in bankruptcy” etc.
• Accounts that are still open, but were in fact sold to another company. This often occurs with credit card companies who sell charged off accounts to collection companies.
• Paid tax liens and child support accounts that are still showing a balance or delinquency.

So when you are looking at your credit report with the intention of fixing mistakes on your report in order to raise your credit scores make sure you pay particular attention to these types of errors. They could make a huge difference to your scores.

Improve Bad Credit Report With Credit Repair

Having a bad credit report is bad, let us face it. You cannot buy a car, or qualify for a mortgage, or even in some cases get a job. But, having a bad credit report and bad credit scores is not the end of the world, you could say it is a beginning.

The only place to go from bad is good when we are talking credit reports and credit scores. There are quite a few ways to improve your credit report and raise your credit scores, including credit repair. Credit repair is also known as repairing your credit report.

How Does Credit Repair Raise Bad Credit Scores?

The process of credit repair is the systematic approach to removing inaccurate information from your credit report. To do credit repair is to go through your credit report with fine tooth comb looking for discrepancies and inaccuracies. When you find a mistake, you can dispute it with the credit bureau. The credit bureau then has about 30-45 days to either provide the paperwork showing that the information is accurate, or they must remove it from your report. You do have a right to an accurate credit report according to US Lending and Credit Laws.

When inaccurate information is removed from your credit report your bad credit scores can go up. Information such as a missed payment that was not really missed, or a collection account that still shows active but is no longer could all negatively impact your credit score. By removing inaccurate credit score impacting items your scores should go up fast.

One thing to keep in mind about credit repair is that there is a specific way to repair your credit that yuo must follow to produce the changes you seek to your credit report. We’ll cover this in another article.

Improve My Credit Scores -What Can I Do?

• Credit Repair – Credit repair is legally using your rights through the US Consumer Credit Laws to question inaccurate information on your credit report.
• Increase your credit lines without increasing the amount of your balances
• Pay down your credit line balances to where they are under 50% of the credit limits
• Pay off with the original creditor any collection account that is less than 12 months old. Make your payoff contingent on the original creditor removing the negative marks on your report by canceling the collection account for example.
• Payoff your credit cards but do not close them out. Long term open credit accounts is very important to higher credit scores.
• Make sure you have a blend of credit. For example if you can manage it have a car loan, a couple credit cards and a student loan.
• Dare we say it…make your payments on time as you agreed in your credit agreement contract.
• Call your credit card company and see if they will re-age your account.