Credit Card Quick

Credit Score Information to Remember

Credit Score

You may think you have a fairly good understanding of your credit score and what it means to you and your ability to obtain credit.  But a credit score is a pretty in-depth bit of information, and understanding it better can only help you in your quest to obtain a strong credit score.

Here’s what you need to know:

• Every time you seek credit, the lender will look at your credit report. Simply put, there is no way to get around a poor credit score because lenders use this information to make a determination about your credit worthiness.
• All of the three, major credit bureaus in the United States track your borrowing behavior. Experian, Equifax and TransUnion all keep detailed records of your borrowing history. So, every time you are loaned money, the details of that loan will be present on your credit report. It will detail the amount of the original, the current balance of the loan, and the payment history on the loan.
• Your credit report includes a plethora of financial and personal information, including your account history, your balance, your monthly payment, your payment history, your payment status, information from public records, tax liens, monetary judgments and even overdue child support payments. So anytime a lender or creditor pulls your credit report, he or she is essentially getting a snapshot of your life.
• Not all credit report information is accurate, and mistakes found on your report can cost you big. The three credit reporting bureaus are not immune to mistakes or inaccuracies. As such, you could have inaccurate information appear on your credit report; information that could ruin your chances of obtaining credit. Because of this, it is vital that you periodically check your credit report for inaccuracies or other errors. If any inaccurate information is found, it is up to you to immediately contact the appropriate credit reporting bureau.
• The Fair Credit Reporting Act entitles everyone to receive a free copy of their credit report once every 12 months. You are also entitled to a free copy of your credit report if you were denied credit for any reason.

When You Can Claim a Free Copy of Your Credit Report

Credit Score

We all know that keeping a close eye on our credit report is one of the best things we can do to ensure our good credit is protected. However, did you know that there are some instances when you can actually order a copy of your credit report, from all three credit reporting agencies, for free?

• The Fair and Accurate Credit Transactions Act (FACTA) allows consumers to order a copy of their credit report from all three, major credit reporting agencies (Equifax, Experian and TransUnion) once every 12 months. The easiest way to claim a copy of your credit report is by visiting www.annualcreditreport.com and filling out the Annual Credit Report Request Form found there. You must request your free credit reports through annualcreditreport.com, and not through the individual credit reporting agencies.
• Under the Fair Credit Reporting Act, you are entitled to a free copy of your credit report, from the three, major credit reporting agencies if: you have been denied credit; if you have been denied employment because of your credit; if you have been denied housing because of your credit; or you are forced to pay a higher insurance rate because of your credit.
• Under the Fair Credit Reporting Act, you are also entitled to a free copy of your credit report from all three credit reporting agencies if you placed a fraud alert on your credit report or if you are a victim of identity theft.
• Under the Fair Credit Reporting Act, you are entitled to a free copy of your credit report if you were involved in a dispute regarding your credit report. A good example of this is if you find inaccurate information on your credit report and the appropriate credit reporting agency changed the information on your report to reflect the inaccuracy. Once the investigation has ended, you are entitled to a free copy of your credit report to make sure your updated credit report reflects the changes. Remember that, under the Fair Credit Reporting Act, the credit agency in question must address and settle your dispute within 30 days.

Your Identity is Stolen: What Should You Do?

Identity Theft

If you find your identity has been stolen, it is important to act swiftly to minimize damages. But where do you start?

1. Contact your local police department and report the theft. Once the theft has been reported, the police should be able to provide you with a copy of the report. A copy of a police report will become very important as you and the credit bureaus and creditors perform investigations regarding the identity theft.
2. Contact all three credit reporting agencies (TransUnion, Experian and Equifax) to report the theft. They will likely request a copy of the police report, so send them along. Each of the credit reporting bureaus will do a couple things at this point: They will freeze your credit report and place a fraud alert on it; and they will open a fraud investigation on your behalf. Under the Fair Credit Reporting Act, the credit reporting bureau must investigate the claims within 30 days. Any information they find on your report that cannot be verified with the appropriate creditors must be removed within these 30 days.
3. In addition to sending the credit reporting agencies a copy of the police report, send a written letter, as well, stating in clear terms what happened. Often times, a letter from you will provide future creditors with information needed to understand your credit status.
4. Any creditors or lenders associated with the identity theft should be immediately contacted. They, too, will likely want a copy of the police report. They will also typically perform their own investigation of the matter. Ask the credit reporting agencies if they will also contact the appropriate creditors and provide them with information regarding their investigation.
5. You may be unable to open new credit accounts or take out new loans during this time. Although this may be quite inconvenient, it is important to allow the credit bureaus and the police to finish their investigations and clear your name of the fraud.
6. Going forward, it is important to keep the fraud alert on your credit report and check your credit report frequently over the next year.

The Five U.S. Cities with the Highest Consumer Credit Card Debt

Credit Card Debt

It’s no secret that many U.S. families are knee-deep in credit card debt. Between poor spending habits and as a result of the poor economy and job losses, many Americans are struggling to handle the burden of credit card debt.

Equifax recently reported that, for some households, credit card debt burden equaled an astounding 17 percent of their income. What’s even more amazing is this total doesn’t include debt from store credit cards.

Experian has also analyzed consumer spending habits and found that the average consumer now holds an average of $4,200 in credit card debt. One bright light to this number is that it is four percent less than the year before. There are some cities, however, where credit card debt is far above the national average.

Here is a list of the top five U.S. cities with the highest consumer credit card debt:

1. San Antonio, Texas – Residents of San Antonio are now carrying, on average, $5,177 in credit card debt; that’s more than 20 percent above the national average. Jeanie Wyatt, CEO of the San Antonio-based firm of South Texas Money Management, explains that San Antonio’s debt problems are closely linked to the fact that this city is largely comprised of the working-class, and that wages earned in San Antonio are often less than other parts of the country.
2. Jacksonville, Florida – Residents of Jacksonville owe an average of $5,115 on credit cards. In addition, this city has a lower-than-average credit score. Jacksonville’s credit card debt problems come as no surprise, as this area of the country has been deeply affected by the real estate meltdown and mortgage problems.
3. Atlanta, Georgia – If you live in Atlanta, chances are your credit card debt is around $4,960. Atlanta has suffered from the housing market collapse, leading many to spend on credit cards out of “economic desperation.”
4. Honolulu, Hawaii – Honolulu’s debt average is about $4,939 per person, which is 15 percent higher than the national average.
5. Dallas, Texas – Dallas residents are now carrying an average of $4,936 in credit card debt, which is 15 percent higher than the national average. A bright spot in Dallas’ number, however, is that it is four and a half percent lower than last year’s numbers.

Common Questions about your Credit Report

Credit Score

How much do you really know about your credit report?

Most of us know that a credit report is vital for obtaining any type of credit, yet very few of us actually know our credit score or what is found in it.

If you want to learn more about your credit report, you may have quite a few questions regarding the process of building and maintaining a credit report. Here are the most common questions about credit reports and what you can do to build a strong credit score:

Q: Where can I find my credit score?

A: Each individual actually has three credit scores from the three credit reporting agencies: Equifax, Experian and TransUnion. A creditor may pull your credit report from any of these three agencies, so it is important to check your credit through all of these agencies.

Q: Does it cost money to order a copy of my credit report?

A: Each individual is entitled to a free copy of his or her credit report from all three major credit agencies each year. In addition, if you are denied credit, the creditor who denied you credit must tell you from which credit reporting agency they pulled your credit report; you can then order a free copy of your credit report from that credit reporting agency. You may also receive a free copy of your credit report if you were denied employment or insurance based on your credit report.

Q: What do I do if I find inaccurate or incorrect information on my credit report?

A: You can dispute the information found on your credit report with the credit reporting agency. To do this you must provide your dispute, in writing, to the credit reporting agency, along with any supporting documentation. The credit reporting agency will then investigate your dispute and provide you with the results, usually within 30 days. Any inaccurate or incorrect information will then be taken off your credit report.

Q: Who can get my credit report information?

A: The only way a creditor, insurance company or employer can obtain your credit report information is with your approval.

Report Shows American Still Owe Big on Credit Cards

News

We’ve all heard about the trend taking place across America: Americans are using credit cards less and cash more often. However, even as Americans continue to pay off their debt and use cash more often, Equifax found, in a recent report, that many households in the United States are still carrying a burden of debt.

In fact, Equifax found that many Americans pay as much as 17 percent of their current income toward credit cards. The report also found that the major, metropolitan areas of the U.S. are the hardest hit, in terms of credit card debt, and residents of Florida, North Carolina, Ohio, Texas, Washington and California are having the most trouble with their credit card debt. Here is the amount of credit card debt the top metropolitan areas of the country are dealing with:

• California: $90,566,978,302
• Texas: $48,833,824,544
• Florida: $47,568,265,541
• Ohio: $28,985,502,668
• North Carolina: $22,386,064,118
• Washington: $18,288,819,367

If you are one of the millions of Americans struggling to pay off credit card debt, there are several things you can do today to begin cutting that debt down:

• Make a budget and figure out why you are spending on credit cards. Often times, overspending on credit cards is due to little more than not keeping a close eye on our monthly spending. Because of this, taking the time to sit down and make a reasonable budget – and stick to it! – is vital for conquering the credit card beast.
• If you are having difficulty making ends meet and you are worried that you will fall behind (or are already falling behind), it may be time to contact a non-profit credit counseling agency who can help negotiate better terms with your creditors and help you pay off debts without filing for bankruptcy.
• Make sacrifices to cut down on your debt. Although making large changes to your lifestyle may be difficult to do, the pride of paying off your debts and living debt-free will most certainly make up for your reservations about moving to a one-car family or getting rid of the cable television.

How to Take Care of your Credit before the New Year

Credit Repair

It’s quickly coming to an end: 2010! So, where does your credit stand?

If you’re like most consumers, you simply don’t know. However, what you don’t know or don’t acknowledge can hurt you, so take the time to get your credit in check so you can start out the New Year with a clean slate.

Here’s how:

• Order free copies of your annual credit reports – Every consumer is entitled to one free copy of their credit report from all three credit reporting agencies, including TransUnion, Experian and Equifax each year, so don’t let this year end without claiming your free copy. It is a great time to review your credit card activity from 2010 so you can clear up any discrepancies before the New Year rolls in. This is especially important in the upcoming year, as many individuals are now heading back into the home market, vehicle market and credit market after a rough last couple of years. It only makes sense to take care of any credit report problems before you apply for credit. Now is the time to take care of your financial housekeeping!
• Take an inventory of your current credit cards – Now may be a good time to close those credit cards that simply aren’t working for you. Is it worth lowering your credit score to cancel credit cards? It is if the rates are simply too high or the terms and conditions are not in line with your spending and budget, it may very well be worth it. If you opened up one too many retail credit cards during the holiday season, take them out of your wallet and resist spending on them until you have paid down your current balance.
• Make a financial game plan – Gather all your credit card bills (especially those that resulted from your holiday shopping) and line them up in order, from the highest interest rate to the lowest. Then, develop a game plan to pay them off in a reasonable amount of time. It just doesn’t make sense to carry high credit card balances into the New Year and beyond, so make it your New Year’s resolution to pay them down and kiss those high balances good-bye.

Diversifying your Credit to Build your Credit Score

Credit Score

Many consumers wonder what they need to do to build a solid FICO score. We all know that paying our bills on time and keeping our debts to a minimum is always a good idea if we want a strong credit score, but there are other things we can do bump up our credit score so we can qualify for the lowest interest rates on everything from home loans to credit cards.

Here’s how:

The three credit reporting agencies (TransUnion, Equifax and Experian) assess your credit worthiness by looking at a number of factors, including credit history, payment history and your debt-to-income ratio. However, they also look at how you manage different types of credit. If you are missing certain types of credit, your credit score will likely be lower.

Examining Different Types of Credit

In short, there are a number of different types of credit accounts that the credit reporting agencies take into consideration when examining your credit: credit cards, retail accounts, installment loans, home loans and consumer finance accounts. If you lack a home loan or installment loan, for example, the credit reporting agency does not have information to draw from and will therefore reduce your credit score slightly to account for this lack of information.

In other words, simply paying your credit card bill on time each month will not make a huge difference to your credit score over the long run. Installment loans are a great tool for raising your credit score, as they are steady, monthly bills that must be paid. In other words, if you pay on a car loan for an extended period of time, the credit reporting agency then has adequate information that details you are a good credit risk for installment loans and will therefore raise your credit score to reflect this.

Consider Adding a Small Installment Loan

Now this certainly doesn’t mean that you should seek other types of credit simply to raise your credit score. All it means is that it may take time to build your credit score enough to obtain the best interest rates on a variety of loans. However, now may be a good time to take a small installment loan on a kitchen appliance, for example, and make the steady payments instead of paying cash for it. The history of your payments will most certainly have a positive effect on your credit score.

Easy Ways to Safeguard your Credit

Identity Theft

You’ve worked so hard to get an excellent credit score: you’ve paid your bills on time; you’ve kept your debts to a minimum; and you’ve kept your spending in check. It is therefore more important than ever to do what you can to safeguard your credit.

With identity theft running rampant in today’s society, it is crucial that you do what you can to protect yourself. And here’s how:

• Always take advantage of your free credit report. Few people know that they are entitled to a free copy of their credit report each year from all, three credit reporting bureaus (TransUnion, Equifax and Experian). Take advantage of this offer and carefully look over your credit history. Note that your credit history and credit score may differ quite a bit from one company to the next, so take the time to really review each of these reports. More importantly, immediately contact the appropriate credit reporting agency if you spot any errors or discrepancies.
• Always pay your bills on time. Don’t jeopardize your good credit score by failing to pay simple bills. Although they may always pay your credit card bills, mortgage and car note on time each month, many individuals don’t realize that delinquent utility bills can also hamper your good credit. So no matter what the bill, pay it on time, each and every month!
• Protect your personal information at all times. This may include shredding your bills, holding tightly onto your wallet when in public places and being selective regarding with whom you hand over your credit card. Many people unknowingly drop personal information in the garbage can and put their personal information – and their credit – at risk.
• Don’t shop online without setting up certain safeguards. Take care to only shop from trusted websites with updated security certificates, make sure your firewall and virus protection is up to date, and only use your credit card to shop online; not debit cards! Devote just one credit card for online shopping so that you can closely monitor the activity for unauthorized activity.

The Facts about Pre-Screened Credit Card Offers

Choosing Credit Card

Many of us have received credit card offers in the mail, with the words “pre-screened” on them. What does it mean to be pre-screened for a credit card?

Many banks and credit card companies send out pre-screened credit card offers to people based on several factors, such as their income, their credit history and other personal information.

An Ideal Applicant

In other words, a pre-screened credit card offer is one that was well thought out by the bank. Instead of credit card offers that are sent out to the masses, pre-screened credit card offers mean that the creditor has done a background check and found you to be an ideal applicant for the card.

The creditor may use your borrowing history, your credit score and other personal information to qualify you for a pre-screened credit card offer. Creditors may also offer pre-screened cards to a particular group of individuals, such as homeowners or those who belong to an organization. If you get a pre-screened offer in the mail, you can be assured that the creditor has done substantial checking on you to determine that you are the ideal applicant for its credit card.

Your Credit Worthiness

A pre-screened credit card usually means that you will almost always get approved for the credit card, versus an invitation-style credit card offer, which may or may not mean you will be approved without first determining your credit worthiness.

Often times, credit card companies are able to target a particular group of individuals by paying the major credit reporting agencies (Equifax, Experian and TransUnion) to provide them with a list of individuals who meet its criteria. These inquiries by credit card companies are often referred to as “soft inquiries,” meaning that they don’t have a negative effect on your credit rating.

You may receive a pre-screened credit card offer in the mail with the words “pre-approved,” “pre-qualified” or “pre-selected, although they all generally mean the same thing.

Although creditors in the past focused on several different types of people, even sub-prime borrowers, today’s customer that receives a pre-screened credit card offer will likely be an individual with a strong credit history and an excellent credit score.