Define "Credit Bureau"
A "Credit Report"?
A "Credit Score"?
How does this impact me?
What do you do to help me?
Can I legally get 3rd party help with my credit?
How much will my credit score increase?
What results am I guaranteed?
How long will this process take?
________________________________________________
What is a Credit Bureau?
A "Credit Bureau" or "Credit Repository" is a privately owned company that amasses and stores records on the payment patterns and credit history of millions of consumers. They generate billions in profits by selling these records to potential lenders.
They are not government organizations and have no legal authority. But they nevertheless have enormous power and influence over the lives of individual Americans!
In the United States there are three major credit bureaus. They are:
Experian
Equifax
TransUnion
go to top
----------------------------------------------------------------------------------------------------
Define "Credit Report"
Collecting data from public records, lenders, debt collectors and the court system credit bureaus put together information on individual citizens into a file called a "Credit Report."
Your credit report includes data on your open and closed accounts with mortgage lenders, auto loan lenders, credit card companies, and merchant lenders.
It also includes public records such as court judgments, foreclosures, repossessions, liens and the bankruptcy.
Now when a potential lender is considering a loan application he will contact one (or more) of the credit bureaus and buy a copy of that persons credit report. Based on the information in the credit report and "Credit Score" the lender will decide whether the borrower is a good risk or a poor one.
The lender will decide whether to grant the loan based on the credit report. If he is granted a loan, the credit report and score will determine what interest rate he will have to pay.
go to top
----------------------------------------------------------------------------------------------------
What is a Credit Score?
Your "Credit Score" is a 3 digit number assigned to you by each credit Bureau based on your credit report. The "Credit Score" is intended to show your credit worthiness. The higher your score is, the better your credit.
Below is an evaluation of credit scores.
Below 585 Very poor
585 - 669 Poor
670 - 699 Fair
700 - 729 Good
Above 730 Excellent
The individual bureaus have different ways of determining a credit score, and so your credit score will not be the same for each Bureau. But they are likely to be in the "ballpark".
Click here to get your credit report and score.
In calculating your credit score the bureaus look at five basic factors in degrees that vary, roughly as follows;
Payment History 35%
Have your bills been paid on time?
Have you made payments late?
Just how late?
What is the frequency of late payments?
Are there accounts in collection?
How many accounts are in collection?
Does your report show repossessions?
Have you declared bankruptcy?
Present Level of Debt 30%
What is the total of all your present debts?
Duration of Credit History 15%
How many years have you carried debt? Lenders would rather see a longer history (of timely payments) and not a short one
Types of Credit 10%
Most accounts are either "revolving" or "installment" accounts.
Installment accounts (like mortgage and car loans) are where you pay a set amount on a regular schedule.
Revolving accounts (like credit card accounts) are more flexible and are not paid in predetermined amounts, but they often do require a minimum payment.
Lenders like to see a "healthy mix" of these two.
Pursuit of New Credit 10%
Are there are many "inquiries" showing on your credit report (potential lenders buying your credit report)?
Lenders would rather not see many recent inquiries. That could indicate the borrower is in jeopardy of overextending himself.
go to top
----------------------------------------------------------------------------------------------------
How does this impact me?
Credit bureaus keep records on millions of Americans, so it should come as no shock that there will be a few mistakes. But unfortunately, the mistakes number more than a few. In fact, it's estimated that anywhere from a third to an appalling 90% of all credit reports have mistakes.
Let's say it in different words - even using conservative figures there's a 1 out of 3 chance that your report has inaccurate data!
Considering how important your credit score is those are NOT very good odds - and that's considering the LOW estimate!
And how many mistakes does it take to negatively affect your credit score?
............ Just one ............
Now you would think that when a matter involves something as important as your credit ... something that has such a critical impact on your life, both personal and financial ... that there would be a greater effort to "get it right".
"There ought to be a law" you may be thinking ..."
Fortunately there is! The United States Congress passed one to address the problem ... the Fair Credit Reporting Act, or FCRA.
Under the FCRA you, the consumer, have the right to challenge the accuracy of information in your credit report. And when you contact one of the credit bureaus to dispute such information they have 30 days under the law to investigate. If after 30 days they have not verified the accuracy of the information, they are required under law to delete it.
Although the FCRA is a very welcome law for consumers, there are still problems.
From the perspective of the credit bureaus this law is a nuisance. It cost them lost time, money and productivity.
And for that reason they don't go out of the way to make it any easier for consumers. There's a "loophole" in the FCRA that the credit bureaus often use, the "frivolous" issue. That is, if a dispute is "frivolous" the credit bureau is not required to investigate. And the worst part is that it's the bureaus themselves who initially decide if a dispute is frivolous.
Kind of like putting the fox in charge of the henhouse isn't it?
Needless to say the bureaus are all too eager to label a dispute frivolous whether it is or not. Now of course you can challenge them in court if you have the money. But most people just can't afford to hire the high priced lawyers the credit bureaus can hire ... especially those who are paying shockingly high mortgage rates because of mistakes on their credit report!
go to top
----------------------------------------------------------------------------------------------------
How do you help me?
We know all about the "roadblocks" the credit bureaus use to confound people and obstruct their efforts to get errors deleted from their credit report. Utilizing your rights under the Fair Credit Reporting Act we help you challenge the accuracy of data on your report to delete items that could be hurting your credit score.
We know how to deal with the credit bureaus and get results!!
go to top
----------------------------------------------------------------------------------------------------
But is it legal to use 3rd part help?
Although the credit bureaus would like to discourage you from seeking help in challenging data on your credit report, don't ever let them convince you that you can't legally get help. It definitely is NOT illegal!
Another trick they use is to reply to your dispute and try to convince you that utilizing help is a waste of your money and that all credit repair companies are scammers! And while it's true that some are, the bureaus intention is NOT to protect YOU ... it's to protect credit bureau profits by making it harder for the consumer!
Under the FCRA every citizen has the right to challenge - on his own - information on his credit report. But likewise, everyone also has the right to prepare his own tax return, and yet many people would rather have an accountant do their taxes because of the difficulty and complexities of the tax code.
When you put your credit in the hands of a professional you stand the best chance of improving your credit score ... and getting back the good credit you deserve!
go to top
----------------------------------------------------------------------------------------------------
How much improvement can I expect in my credit score?
There will be variation in results, but in almost every case some major improvement will result.
And don't forget!
In regard to your credit, ANY improvement will make a big difference in your personal and financial life ... it will impact your life in the form of better interest rates, the ability to get loans that you couldn't have gotten otherwise, and reduced stress and emotional anguish.
go to top
----------------------------------------------------------------------------------------------------
Am I guaranteed results?
No one can assure results in regard to improving your credit. And no REPUTABLE company will!
Everyone's situation is different. But in most cases there will be major improvement to one's credit report and credit score ... improvement that will enable the client to get a mortgage, credit card, or car loan ... and at a far lower rate of interest.
Don't forget - depending on your situation even ONE mistake on your credit report could mean a difference in your credit score - and in whether or not you can buy a home.
go to top
----------------------------------------------------------------------------------------------------
How long will it take?
It will depend on your situation. It took many years to form your current credit history, and it just isn't realistic to expect clean credit overnight.
Nevertheless, in some cases there will be major improvement in just a little over a month. Other times it takes longer. Very rarely it can take a year or more.
But on average you're likely to see substantial improvement in your credit in 4 - 8 months time.
go to top |
