Archive for the ‘Credit Facts and Advice’ Category
Terms Used for Credit Payments
Credit Terms, Glossary of Terms
A
Account Condition
Indicates the present state of the account, but does not indicate the payment history of the account that led to the current state. (i.e. open, paid, charge off, repossession, settled, foreclosed, etc).
Account number
The unique number assigned by a creditor to identify your account with them. Experian removes several digits of each account number on the credit report as a fraud prevention measure.
Accounts in Good Standing
Credit items that have a positive status and should reflect favorably on your creditworthiness.
Adjustment
Percentage of the debt that is to be repaid to the credit grantors in a Chapter 13 bankruptcy.
Annual fee
Credit card issuers often (but not always) require you to pay a special charge once a year for the use of their service, usually between $05 and $500.
Annual percentage rate (APR)
A measure of how much interest credit will cost you, expressed as an annual percentage.
Authorized User
Person permitted by a credit cardholder to charge goods and services on the cardholder’s account but who is not responsible for repayment of the debt. The account displays on the credit reports of the cardholder as well as the authorized user. If you wish to have your name permanently removed as an authorized user on an account, you will need to notify the credit grantor.
B
Balloon Payments
A loan with a balloon payment requires that a single, lump-sum payment be made at the end of the loan.
Bankruptcy and Credit Report Code
Federal laws governing the conditions and procedures under which persons claiming inability to repay their debts can seek relief.
C
Capacity
Factor in determining creditworthiness. Capacity is assessed by weighing a borrower’s earning ability and the likelihood of continuing income against the amount of debt the borrower carries at the time the application for credit is made. While capacity may be considered in a credit decision, the credit report does not contain information about earning ability or the likelihood of continuing income.
Capital one card bill
Bills detailing charges and the minimum amount owing on monthly.
Chapter 7 Bankruptcy
Chapter of the Bankruptcy Code that provides for court administered liquidation of the assets of a financially troubled individual or business.
Chapter 11 Bankruptcy
Chapter of the Bankruptcy Code that is usually used for the reorganization of a financially troubled business. Used as an alternative to liquidation under Chapter 7. The U.S. Supreme Court has held that an individual may also use Chapter 11.
Chapter 12 Bankruptcy
Chapter of the Bankruptcy Code adopted to address the financial crisis of the nation’s farming community. Cases under this chapter are administered like Chapter 11 cases, but with special protections to meet the special conditions of family farm operations.
Chapter 13 Bankruptcy
Chapter of the Bankruptcy Code in which debtors repay debts according to a plan accepted by the debtor, the creditors and the court. Plan payments usually come from the debtor’s future income and are paid to creditors through the court system and the bankruptcy trustee.
Charge-Off
Action of transferring accounts deemed uncollectible to a category such as bad debt or loss. Collectors will usually continue to solicit payments, but the accounts are no longer considered part of a company’s receivable or profit picture.
A not for profit org established to keep other creditors in check.
Civil Action
Any court action against a consumer to regain money for someone else. Usually, it will be a wage assignment, child support judgment, small claims judgment or a civil judgment.
Claim amount
The amount awarded in a court action.
Closed Date
The date an account was closed.
Co-maker
A creditworthy co-maker is sometimes required in situations where an applicant’s qualifications are marginal. A co-maker is legally responsible to repay the charges in the joint account agreement.
Consumer Credit Counselling Service
A non-profit organization that assists consumers in dealing with their credit problems. Consumer Credit Counseling Service has offices throughout the United States that can be located by calling 800 388 CCCS (2227).
Co signer
Person who pledges in writing as part of a credit contract to repay the debt if the borrower fails to do so. The account displays on both the borrower’s and the co-signer’s credit reports.
Credit Limit/Line of Credit
In open-end credit, the maximum amount a borrower can draw upon or the maximum that an account can show as outstanding.
Credit items
Information reported by current or past creditors.
Credit Report
Confidential report on a consumer’s payment habits as reported by their creditors to a consumer credit reporting agency. The agency provides the information to credit grantors who have a permissible purpose under the law to review the report. Mini credit reports contain less information.
Credit Scoring
Tool used by credit grantors to provide an objective means of determining risks in granting credit. Credit scoring increases efficiency and timely response in the credit granting process. Credit scoring criteria is set by the credit grantor.
Creditworthiness
The ability of a consumer to receive favourable consideration and approval for the use of credit from an establishment to which they applied.
D
Date filed
The date that a public record was awarded.
Date of Status
On the credit report, date the creditor last reported information about the account.
Date Opened
On the credit report, indicates the date an account was opened.
Date resolved
The completion date or satisfaction date of a public record item.
Delinquent
Accounts classified into categories according to the time past due. Common classifications are 30, 60, 90 and 120 days past due. Special classifications also include charge-off, repossession, transferred, etc.
Discharge
Granted by the court to release a debtor from most of his debts that were included in a bankruptcy. Any debts not included in the bankruptcy – alimony, child support, liability for willful and malicious conduct and certain student loans – cannot be discharged.
Disclosure
Providing the consumer with his or her credit history as required by the FCRA. Experian provides consumer credit report disclosures via the Internet, by U.S. Mail or in person at our office location in Santa Ana, CA.
Dismissed
When a consumer files a bankruptcy, the judge may decide to not allow the consumer to continue with the bankruptcy. If the judge rules against the petition, the bankruptcy is known as dismissed.
Dispute
If a consumer believes an item of information on their credit report is inaccurate or incomplete, they may challenge, or dispute the item. Experian will investigate and correct or remove any inaccurate information or information that cannot be verified. Experian gives consumers the option of disputing online or they may call the telephone number on their credit report for assistance.
E
ECOA
Standard abbreviation for Equal Credit Opportunity Act.
End-user
The business that receives the report for decision making purposes that meet the permissible purpose requirements of the FCRA.
Equal Credit Opportunity Act (ECOA)
Federal law, which prohibits creditors from discriminating against credit applicants on the basis of sex, marital status, race, color, religion, age, and/or receipt of public assistance.
One of the three national credit reporting agencies, headquartered in Atlanta, Ga. The other two are Experian and TransUnion.
Experian
One of the three national credit reporting agencies, with U.S. headquarters in Costa Mesa, CA. The other two are Equifax and TransUnion.
F
Fair Credit and Charge Card Disclosure Act
Amendments to the Truth In Lending Act that require the disclosure of the costs involved in credit card plans that are offered by mail, telephone or applications distributed to the general public.
Fair Credit Billing Act
Federal legislation that provides a specific error resolution procedure to protect credit card customers from making payments on inaccurate billings.
Fair Credit Reporting Act (FCRA)
Federal legislation governing the actions of credit reporting agencies.
Fair Debt Collection Practices Act (FDCPA)
Federal legislation prohibiting abusive and unfair debt collection practices.
Finance Charge
Amount of interest. Finance charges are usually included in the monthly payment total.
Fixed Rate
An annual percentage rate that does not change.
G
Generation Identifier
Generation identifiers are Jr., Sr., II, III, IV, etc.
Geographical code
This information is received from the Census Bureau and represents the state, Metropolitan Statistical Area, county, tract and block group of the reported address. This code is similar to a ZIP CodeTM.
Grace period
The time period you have to pay a bill in full and avoid interest charges.
Guarantor
Person responsible for paying a bill.
H
High balance
The highest amount that you have owed on an account to date.
I
Instalment Credit
Credit accounts in which the debt is divided into amounts to be paid successively at specified intervals.
Investigation
The process a consumer credit reporting agency goes through in order to verify credit report information disputed by a consumer. The credit grantor who supplied the information is contacted and asked to review the information and report back; they will tell the credit reporting agency that the information is accurate as it appears, or they will give us corrected information to update the report.
Investigative Consumer Reports
These are consumer reports that are usually done for background checks, security clearances and other sensitive jobs. An investigative consumer report might contain information obtained from a credit report, but it is more comprehensive than a credit report. It contains subjective material on an individual’s character, habits and mode of living, which is obtained through interviews of associates. Experian does not provide investigative consumer reports.
Involuntary Bankruptcy
A petition filed by certain credit grantors to have a debtor judged bankrupt. If the bankruptcy is granted, it is known as an involuntary bankruptcy.
Item-specific Statement
Offers an explanation about a particular trade or public record item on your report, and it displays with that item on the credit report.
J
Judgment Granted
The determination of a court upon matters submitted to it. A final determination of the rights of the parties involved in the lawsuit.
L
Last Reported
On the credit report, the date the creditor last reported information about the account.
Liability amount
Amount for which you are legally obligated to a creditor.
Lien
Legal document used to create a security interest in another’s property. A lien is often given as a security for the payment of a debt. A lien can be placed against a consumer for failure to pay the city, county, state or federal government money that is owed. It means that the consumer’s property is being used as collateral during repayment of the money that is owed.
Line of Credit
In open-end credit, the maximum amount a borrower can draw upon or the maximum that an account can show as outstanding.
Location number
The book and page number on which the item is filed in the court records.
M
Mortgage Identification Number (MIN)
Indicates that a loan is registered with Mortgage Electronic Registration Systems Inc., which tracks the ownership of mortgage rights. This number will follow the homeowner throughout the mortgage.
Most Recent Date
The date of the recent account condition or payment status. This date is also the balance date.
N
The history of national debt, the debt the that country has and the amount on average that each resident of the nation has in debt.
Notice of Results
If your investigation results in information being updated or deleted, you may request that we send the corrected information in your credit history to eligible credit grantors and employers who reviewed your information within a specific period of time. If your investigation does not result in a change to your credit history, results will not be sent to other lenders.
O
Obsolescence
A term used to describe how long negative information should stay in a credit file before it’s not relevant to the credit granting decision. The FCRA has determined the obsolescence period to be 10 years in the case of bankruptcy and 7 years in all other instances. Unpaid tax liens may remain indefinitely, although Experian removes them after 15 years.
Opt In
The ability of a consumer who has opted out to have their name re-added to prescreened credit and insurance offer lists, direct marketing lists and individual reference service lists. Consumers who have previously opted out of receiving prescreened offers may have their names added to prescreened lists for credit and insurance offers by calling 1 888 5OPTOUT (1 888 567 8688).
Opt Out
The ability of the consumer to notify credit reporting agencies, direct marketers and list compilers to remove their name from all future lists. Consumers may opt out of prescreened credit and insurance offer lists by calling 1 888 5OPTOUT (1 888 567 8688).
Original amount
The original amount owed to a creditor.
P
Payment Status
Reflects the previous history of the account, including any delinquencies or derogatory conditions occurring during the previous seven years (i.e., Current account, delinquent 30, current was 60, redeemed repossession, charge-off – now paying, etc.)
Permissible Purposes
There are legally defined permissible purposes for a credit report to be issued to a third party. Permissible purposes include credit transactions, employment purposes, insurance underwriting, government financial responsibility laws, court orders, subpoenas, written instructions of the consumer, legitimate business needs, etc.
Personal Information
Information on your personal credit report associated with your records that has been reported to us by you, your creditors and other sources. It may include name variations, your driver’s license number, Social Security number variations, your date or year of birth, your spouse’s name, your employers, your telephone numbers, and information about your residence.
Personal Statement
You may request that a general explanation about the information on your report be added to your report. The statement remains for two years and displays to anyone who reviews your credit information.
Petition
If a consumer files a bankruptcy, but a judge has not yet ruled that it can proceed, it is known as bankruptcy petitioned.
Plaintiff
One who initially brings legal action against another (defendant) seeking a court decision.
Potentially Negative Items
Any potentially negative credit items or public records that may have an effect on your creditworthiness as viewed by creditors.
Public Record Data
Included as part of the credit report, this information is limited to tax liens, lawsuits and judgments that relate to the consumer’s debt obligations.
R
Recent balance
The most recent balance owed on an account as reported by the creditor.
Recent payment
The most recent amount paid on an account as reported by the creditor.
Released
This means that a lien has been satisfied in full.
Report Number
A number that uniquely identifies each personal Experian credit report. This number displays on your personal credit report and should always be referenced when you contact us.
Reported Since
On the credit report, the date the creditor started reporting the account to Experian.
Repossession
A creditor’s taking possession of property pledged as collateral on a loan contract on which a borrower has fallen significantly behind in payments.
Request an Investigation
If you believe that information on your report is inaccurate, we will ask the sources of the information to check their records at no cost to you. Incorrect information will be corrected; information that cannot be verified will be deleted. Experian cannot remove accurate information. An investigation may take up to 30 days. When it is complete, we’ll send you the results.
Request for Your Credit History
When a credit grantor, direct marketer or potential employer makes a request for information from a consumer’s credit report, an inquiry is shown on the report. Grantors only see credit inquiries generated by other grantors as a result of an application of some kind, while consumers see all listed inquiries including prescreened and direct marketing offers, as well as employment inquiries. According to the Fair Credit Reporting Act, credit grantors with a permissible purpose may inquire about your credit information prior to your consent. This section also includes the date of the inquiry and how long the inquiry will remain on your report.
Responsibility
Indicates who is responsible for an account; can be single, joint, co-signer, etc.
Revolving Account
Credit automatically available up to a predetermined maximum limit so long as a customer makes regular payments.
Risk Scoring Models
A numerical determination of a consumer’s creditworthiness. Tool used by credit grantors to predict future payment behaviour of a consumer.
S
Satisfied
If the consumer has paid all of the money the court says he owes, the public record item is satisfied.
Secured Credit
Loan for which some form of acceptable collateral, such as a house or automobile has been pledged.
Security
Real or personal property that a borrower pledges for the term of a loan. Should the borrower fail to repay, the creditor may take ownership of the property by following legally mandated procedures.
Security Alert
Statement that is added once Experian is notified that a consumer may be a victim of fraud. It remains on file for 90 days and requests that a creditor request proof of identification before granting credit in that person’s name.
Service Credit
Agreements with service providers. You receive goods, such as electricity, and services, such as apartment rental and health club memberships, with the agreement that you will pay for them each month. Your contract may require payments for a specific number of months, even if you stop the service.
Settle
Reach an agreement with a lender to repay only part of the original debt
Source
The business or organization that supplied certain information that appears on the credit report.
Status
On the credit report, this indicates the current status or state of the account.
T
Terms
This refers to the debt repayment terms of your agreement with a creditor, such as 60 months, 48 months, etc.
Third-Party Collectors
Collectors who are under contract to collect debts for a credit department or credit company; collection agency.
Trade line
Entry by a credit grantor to a consumer’s credit history maintained by a credit reporting agency. A trade line describes the consumer’s account status and activity. Tradeline information includes names of companies where the applicant has accounts, dates accounts were opened, credit limits, types of accounts, balances owed and payment histories.
Transaction fees
Fees charged for certain use of your credit line – for example, to get a cash advance from an ATM.
TransUnion
One of three national credit reporting agencies. The other two are Experian and Equifax.
Truth in Lending Act
Title I of the Consumer Protection Act. Requires that most categories of lenders disclose the annual interest rate, the total dollar cost and other terms of loans and credit sales.
Type
This refers to the type of credit agreement made with a creditor; for example, a revolving account or instalment loan.
U
Unsecured Credit
Credit for which no collateral has been pledged. Loans made under this arrangement are sometimes called signature loans; in other words, a loan is granted based only on the customer’s words, through signing an agreement that the loan amount will be paid.
V
Vacated
Indicates a judgment that was rendered void or set aside.
Variable Rate
An annual percentage rate that may change over time as the prime lending rate varies or according to your contract with the lender.
Verification
Verifying whether data in a credit report is correct or not. Initiated by consumers when they question some information in their file. Credit reporting agencies will accept authentic documentation from the consumer that will help in the verification.
Victim Statement
A statement that can be added to a consumer’s credit report to alert credit grantors that a consumer’s identification has been used fraudulently to obtain credit. The statement requests the credit grantor to contact the consumer by telephone before issuing credit. It remains on file for 7 years unless the consumer requests that it be removed.
Voluntary Bankruptcy
If a consumer files the bankruptcy on his own, it is known as voluntary bankruptcy.
W
Wage assignment
A signed agreement by a buyer or borrower, permitting a creditor to collect a certain portion of the debtor’s wages from an employer in the event of default.
Withdrawn
This means a decision was made not to pursue a bankruptcy, a lien, etc. after court documents have been filed.
Writ of Replevin
Legal document issued by a court authorizing repossession of security.
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E Federal Credit Union
Credit Agencies / Bureaus
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Credit Bureaus and How they Work. The credit bureaus are giant depositories of credit information regarding both consumers and business. Apart from the three major credit bureaus there are more than 1,000 other bureaus around the country that gather information regarding your credit standing straight from the lenders. Note: despite the fact the major bureaus collect the same information there are sometimes discrepancies from one bureau to another as they do not share information. It is for that reason that we typically recommend bureaus that deal with all the major credit bureaus in order to have a complete report that you can screen to ensure all the credit information is accurate. |
By doing this you save yourself a lot of time and money (they tend to charge less). After testing several companies out first choice is: Each credit bureau collects the following information (though not necessarily in this order):
Credit Bureaus and How they Work
The credit bureaus are giant depositories of credit information regarding both consumers and business. Apart from the three major credit bureaus there are more than 1,000 other bureaus around the country that gather information regarding your credit standing straight from the lenders. Note: despite the fact the major bureaus collect the same information there are sometimes discrepancies from one bureau to another as they do not share information. It is for that reason that we typically recommend bureaus that deal with all the major credit bureaus in order to have a complete report that you can screen to ensure all the credit information is accurate. By doing this you save yourself a lot of time and money (they tend to charge less). After testing several companies out first choice is:
Each credit bureau collects the following information (though not necessarily in this order):
1. Personal information
-Your full name and previous names (if any)
-Your social security number
-Current address and previous addresses
-Phone number (s)
-Date of birth
-Current and previous employers
-Annual income
2. Your Credit history
-Banks accounts and credit products
-Mortgages
-Retail credit cards
-Other lenders credit products
3. Credit Report Inquiries
-The amount of times in the past 12 months you have applied for credit or have had an inquires done (note, personal inquires into your credit don’t count against you, in fact it is encouraged)
4. Public records
-Legal or court judgments, such as child support cases
-Tax information (typically updated every time you submit your taxes)
-Bankruptcies
To demonstrate how it works lets look at the following example:
You walk into Sasks and apply for their in house credit card. They ask you to give some personal information (name address, how long you’ve lived there, previous address, income, employer, etc) they take that info send off (normally done instantly through the wonders of automation) to credit card company dealing with them, that company in turn contacts a credit reporting agency (also known as CRA) and either manually reviews your application (that’s pretty rare these days) or a program will automatically compare the information you have submitted with what they have on record and send back the okay, or not. If there are any discrepancies in credit report it will notify the lender as well if there is new information it will store it and added it to your credit report. If your application is accepted and you agree to the terms of credit it opens a channel from the lender to the CRA that records you activity and payment history thus becoming a part you credit file/report.
All of your credit dealings and transactions are reported monthly to CRAs by the lenders and merchants (like Veridian Credit) associated with you. The majority of the large creditors report your information to all three national credit bureaus. However some of the smaller lenders and creditors will send that information to one the major CRA’s like Eglin federal credit union. It is because of this that the information contained in your file may not be the same form one CRA to the other. Note that inconsistencies may also show up because CRA’s like Experian do not include an account that shows up on your report from TransUnion. This is of course why E Federal Credit Union always recommend that you get all three reports and review each one. Since that can be both costly and time consuming, you can get all three at the same time and have the comparison done for you for a third of the price you would have to pay of you went through the major CRA’s. If you find collections error credit report contact information is below.
Major CRA’s
Equifax: www.equifax.com #1
Equifax is by far the top and most comprehensive of the major CRA’s.
P.O. Box 740241, Atlanta, GA 30374-0241
To report fraud, call: 800-525-6285/ TDD: 800-255-0056 and write: P.O. Box 740241, Atlanta, GA 30374-0241
Experain: P.O. Box 2104, Allen, TX 75013
TransUnion: : P.O. Box 1000, Chester, PA 19022
To report fraud, call: 800-680-7289/ TDD: 877-553-7803 and write: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634-6790
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How Does Debt Consolidation Work
Credit Advice Improving Your Credit Score and Rating:
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Improving your credit score. So you’ve had a few problems with your credit lately and the last time you checked your credit score wasn’t the best. Now you’re wondering what you can do to repair the damage and improve your credit report. For starters, you’re not alone, there are more than 30 million people in the United States with credit scores low enough (credit score under 620) to make obtaining loans and credit cards with decent interest rate near impossible. On the other hand your credit is maybe alright, but you’d still like to improve your credit report score. The better your credit, the lower the interest rates you can score on mortgages, car loans and credit cards. Improving your credit report score is a very simple task. Follow the points listed below and before you know it your credit score will be tip top in no time: |
Steps to Improving Your Credit Report and Credit Score:
1) Make sure the information contained on your credit report is accurate and up to date (it’s very easy to order a copy of you report from Equifax).
2) Don’t apply for credit at least three months (90 days) before you apply for a mortgage or loan. You can raise your score by 10% by doing this.
3) Most importantly, pay all your bills on time (if your planning on applying for a mortgage make sure you have a glowing payment history six months prior to applying)
4) Obviously if you have anything in collections get it paid and taken off a.s.a.p.
5) Make a few extra payments to any credit products you may have (credit cards, loans etc.) and try to get the balance down (it looks better in the eyes of your lender and will help your debt to income ratio)
6) Again make sure to get a copy of your credit report to make sure all the information is accurate. Your credit score may be suffering because of an error or ill intent. Improve your credit report be checking it frequently.
7) When improving your credit report, make sure not open a number of new accounts in a short period of time. Opening a number of new accounts will lower your average account age, which will have a negative effect on your credit report score and also makes you look risky to credit lenders.
Improving your credit and raising your improved credit score is a simple. Only seek credit as required and don’t open credit for the sake of having credit. Keep your pre-existing credit and the balances on said credit as low as possible. If you do have a balance on a credit card, make sure to make your payment on time. Improving your credit report is that easy. You may also be interested in learning about grants in order to pay off debts.
How Does Debt Consolidation Work
If you find that you’re unable to keep ahead of the bills consider consulting a professional they can go over how does debt consolidation work. Credit consolidation and consumer credit counseling may be the answer to "how do I get rid of debt?" Tips on credit card consolidation: talk to your personal banker for credit advice; ask if they think you would qualify for a loan to consolidate all your bills. Typically creditors are more willing to give a consolidation loans as it helps everyone involved. It works by taking all your credit and paying it off all at once with one loan that you must then repay. This saves a ton on interest and penalties and normally comes in at a much lower interest rate. In short it is one of the best ways to pay off debt. With the cause of national debt so high, rest assured you’re not alone and there are people to help, like the Members first Credit Union.
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Coosa Valley Federal Credit Union
Free Credit Consolidation Minimize Unintentional Damage to your Scores
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Free credit consolidation and what you need to know and what you can do to minimize unintentional damage to your scores: It would be great if there were a secret formula to restore the damage done by intentionally moving balances from credit card to another or opening new accounts. Unfortunately until the credit bureaux’s straighten things out there are only a few things you can do: 1) Continuing to pay down debt and try holding off on opening any new accounts. 2) Attempt to keep the balances low on your credit products. |
3) Don’t transfer your problems! Obviously this is a hit or miss scenario. If you happen to come across a really good and low interest rate when you’re paying off a high rate or during a free credit consolidation, then it may well be in your best interest to transfer your balance as the money you save could be put to good use by paying off even more of the outstanding balance. Keep in mind the effect it will have, yes a lower rate is better when you’re paying off your debt, but when you take advantage of a balance transfer you may damage your credit scores.
Take a look:
Here is insightful advice from Don Sainechuck at the Coosa Valley Federal Credit Union: By simply opening a credit card or other product account it can lower your overall credit score by 5 points (some times more). This includes a balance transfer to a card with a lower rate and debt consolidation.
We ask Equifax and the Community America Credit union, this is what they said: “because the FICO model is heavily influenced by your "credit utilization ratio," the portion of your available credit limit you’re actually using. The formula likes to see a wide gap between your balances and your limits. Transferring a balance from a high-limit card to a lower-limit card makes it look like you’re closer to maxing out that second card and the scores can react negatively on your report on credit.”
So in short: FICO’s formula would, in general, prefer a balance of a $1,000 dollars on 5 cards over a balance of $5,000 on one card. Make sense??? Not!
To top it off, if you do transfer the balance from card to another, don’t close the other card (it will actually do more damage). By closing the old account it lowers the available amount of credit that FICO uses the personal credit scoring formula.
So to summarise:
1) Try to limit opening new credit accounts.
2) Don’t transfer your balances from card to card.
3) Pay off/down your balance and debt or apply for a free credit consolidation. If you do take advantage of a lower interest card make certain you use the opportunity to reduce the balance, after all, less debt is good for your wallet as well as your credit scores.
Before making any credit or financial move you should consult with a Veridian personal banker at the Langley Federal Credit Union. If you would like more infomation see out other posts and Shell Credit
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Shell Federal Credit Union
Credit Scores and Grades
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Credit Grades, Ratings, Scores and How they Differ Your credit grade/rating is the measurement based on factors that are outlined on your credit report and is what a lender will consider when you apply for any sort of credit. Credit grades are based on your past and present financial state. It takes into account everything from your debt to income ratio, your credit cards, payment history, percentage owed on any loans or other forms of credit (lenders typically find it favourable if you have at least 25% remaining, so don’t max out your credit) and other factors (such as: have you ever been sent to collections in the last 7 years etc.). |
Ultimately your innovis credit report grade has an impact on whether or not you will qualify for credit and the interest rate you’ll receive. According to Members First credit union in Pensacola FL the difference between credit grades, credit score and credit rating is the following: A credit grade is a letter grade given from Prosper Borrowers system obtained your overall credit score based on your credit report. The grade is a letter that is indicative to your score. See the chart below to compare a credit score to grade.
The grading system is used to give lenders a good idea of your standing with out disclosing the exact number. Note that the Prosper system does not include anything below 520. A grade of HR means your credit score is 559 and lower which follows under the high risk category and anything lower than 520 is immediately disqualified and is considered bad credit. Having your credit grade pulled up does not have an impact on your credit score like a full inquiry would, instead it is considered a soft inquiry.
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Grade: |
AA |
A |
B |
C |
D |
E |
HR |
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Score: |
760 and Up |
720-759 |
680-719 |
640-679 |
600-639 |
560-599 |
520-559 |
The difference of a Shell Federal Credit Union credit score and rating is really very little. In general they are used interchangeably and at first glance are the same thing. A credit score is typically calculated automatically from information gathered by the credit bureaus. The scoring method is an efficient way of dealing with a large volume for companies dealing with mass consumer credit applications (such as a credit card company) and as such, auto generated scores are used to automate and speed up the application process.
GNO federal credit union credit ratings are calculated manually and are based on your credit report, the lenders policy and analysis of the scenario. The big difference here is that it is done “by hand” and factors such as your relationship with the lender, income etc are able to be inputted in to the calculation. On average a credit rating are more general than there counterparts the credit score. Typically a rating will be in a categories such as A+ to D (not unlike a report card) whereas a score is a number (1 to 1000) that includes an unbiased approach and every bit of information available on you. More greatresources may be founnd with the North Carolina state employees credit unions.
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Buy Now Pay Later No Credit Check
Credit Lenders
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Lenders and Credit: How creditors and lenders look at your credit score: Credit scores are one of the first thing that a potential credit card company or lender is going to look at when you submit a credit application (for any form of credit). As previously discussed your credit report based on your history as reported by the creditors and merchants you deal or have dealt with. In this article we’ll discuss what a potential lender will look at in determining your credit worthiness. Note that not all lenders have the same criteria or process. It is possible to (shall we say) be declined for an American Express card through an online credit card application and be approved for the same card through you bank because of a previous relationship. We will alsotouch on private bad credit lenders and the world of buy now, pay later with no credit checks.
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The following is a brief insight into how a potential lender interrupts your credit information via your credit report. Note: when applying for credit it is best to apply with a financial institution that you have a relationship with (checking account etc.)
Debt to income ratio:
One of the major factors in determining your credit worthiness is your debt to income ratio. Your debt to income ratio is a calculation based amount you make per year compared to the amount of debt you have and the minimum payments due each month. If you have debt ratio of 35% or higher, chances are you will not be approved for credit. Even at 20% some creditors may deny your application, others however may approve but charge you a high interest rate. Typically credit card debt is the worst form of debt where as a mortgage or car loan is still considered equity which works in your favour. In order to improve your chances for credit, either lower the amount of debt you have (pay it off, consolidate) or increase the amount of income you generate. As a rule lenders look favourably on a higher income, lower debt ratio and will give you a much better rate.
Available and Open credit:
So you managed to pay off your credit cards, YES! To the average person that would be enough. However so long as you have the ability to use that credit a lender will simply assume the amount that the card is entitled to as debt. It may seem unfair however, lender do this as a precaution. With to much readily available credit at your disposal it would be very easy to land yourself in over your head.
As a side note:
The CRA suggests that you hold on to your oldest credit card or credit product (revolving) as it has the most amount of history (hopefully all good). Don’t worry if you have more than a few credit cards, so long as you are able to pay them off; it actually reflect positively towards a healthy credit score. Do close the accounts and cards that you no longer use, as the more you have "laying around" the more likely you are to become a victim of Identify Theft (Please, don’t just cut up the card! Phone or go in and close the account in person).
The Balance on your Credit Cards:
If you have maxed out your credit cards it tells the lender that you need more money as you can’t afford to bring down the balance of your other credit cards…..not good. It should be standard practice to keep at least 25% of the amount the card is worth available at all times. You may consider getting rid ofdebt by consolidation.
Payment History:
It should go without saying that you must be making your minimum payments on time constantly (it is of course even better if you can pay more than what is due). Anytime you miss or forget about a payment it stains your credit report for at least 12 months for soft inquires and show up front and center in a full credit inquire. If at anytime you account is sent to a collections agency it stays on file for seven years and is a very bad sign to potential lenders.
Inquiries:
As you have read in the previous articles, every time you submit an application for a credit product the creditor will pull up your commerial credit report. This is called a hard inquire as the full report is being accessed by someone other than yourself. When you request you credit report nothing happens other than the fact that you get some peace of mind. Other inquires know as soft inquires may occur when you open a bank account or get a prequalification for a loan (like a mortgage). Anything more than 10 soft inquires or 5 hard in a period of 6 months or less will typically scare most lenders away.
Now that you have a better understanding of how a creditor will look at your credit report you should have an easier time with any future applications.
Buy Now Pay Later with No Credit Check:
Now when it comes down to buy now pay later no credit check, don’t be fooled! These places may not check your credit rating but they are going to charge you through the roof for it. Typically you’re looking at anywhere from 29-45% interest or higher. So basically when looking at catalogs with instant credit anything or free gift credit card etc, you order you will land up by paying almost three times the amount of the price….ouch.
Private Bad Credit Lenders:
First thing that should come to mind is a mob like loan shark…. in reality this is not often too far off. Be very careful before ever going to a private bad credit lender, you land up biting off more than you can chew.
Next: NC sate credit Union
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History of National Debt
Average Credit Scores and National Credit Averages:
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National average credit score: With all the talk about the economy in recent months and buzz surrounding the national average credit score, every one wants to know what it is and why, either to see where they place, plain curiosity or they’re worried about qualifying for a loan. So how will do want to know how you’ll compare to the National average credit score. Enough suspense, we’re not going to keep you in the dark….the national average credit score is 680. The credit score is based on research conducted by Experian ( one of the three major credit reporting and scoring agencies.) Experian uses the Fair Isaac Risk Model (see FICO Score for details). Basically the FICO model is the credit model developed by Fair Isaac.
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Factors Affecting the National Average Credit Score: Out of the five metrics that go into calculating a FIC score there are two key pieces of information that account for 65% of the total score:
1) Payment History (Weighted at 35% of credit score) Your credit payment history is measured from reports sent by lenders and creditors. Essentially this is reflective of weather or not the bills or loans are paid on time and at the minimum amount.
2) Outstanding Debt (accounting for 30% of a credit score) The other major key factor in calculating a credit score is the amount outstanding debt. Also know as a debt to income ratio, the higher the debt compared to income the lower the average credit score will be. This essentially is one the biggest problems facing the national average credit score and overall finical situation in the States right now. To put bluntly the average American is in debt way over their head. Find out how to reduce debt.
National Credit Score – How Does Your Credit Score Rate:
From the A Recent Experian National Score Index (September 2008). These credit score are based on information compiled from the credit bureaus immense database of credit scores for the United States. Note that the term national average credit score and average US credit score are used interchangeably as the study was done for the United Stated Credit Score.
Highest National Average Credit Score:
The credit score of 710 and was the highest national average credit score for a state, and First place goes to the state of South Dakota. As for the national average credit score for cities, if you live in Minneapolis, you are in good company with the nation’s best credit scores, according to the most recent data from Experian. You and your neighbours have the highest average credit score of 705. Boston residents rank a very close second, with an average credit score of 704.
Lowest National Average Credit Score:
Lowest state wide credit score of 651: State of Texas. Watch out consumers of Texas, you have the lowest average credit score in the nation. Coming in at a close second is Nevada, with an average credit score of 655. (blammed for too many second personal loans for bad credit) City wise, Dallas and Houston came in at the bottom of the list, with more than 50 points behind Minneapolis. The Texas cities have average credit scores of 650 and 652 (difrent laws apply to medical bills bills and credit reports.
Quick National Credit Score Facts:
There are 29 states that have an average credit score above the national average. There are a total of 22 states, including the District of Columbia that have an average credit score below the national average. For information on personal grats to pay off debts go here. Quick National Credit Score Facts Reference:
Credit Rating Guide:
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Grade: |
AA |
A |
B |
C |
D |
E |
HR |
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Score: |
760 and Up |
720-759 |
680-719 |
640-679 |
600-639 |
560-599 |
520-559 |
States Above or at the National Average Credit Score:
| National Average | 680 | Rhode Island | 692 |
| Kansas | 682 | New Jersey | 693 |
| Utah | 683 | Connecticut | 694 |
| Missouri | 683 | Nebraska | 695 |
| Illinois | 684 | Pennsylvania | 696 |
| Delaware | 684 | Wisconsin | 699 |
| Ohio | 685 | Maine | 699 |
| Oregon | 686 | Iowa | 700 |
| New York | 686 | Montana | 701 |
| Maryland | 688 | New Hampshire | 703 |
| Idaho | 688 | Massachusetts | 703 |
| Hawaii | 688 | Vermont | 706 |
| Virginia | 689 | North Dakota | 706 |
| Wyoming | 690 | Minnesota | 707 |
| Washington | 691 | South Dakota | 710 |
States Below the National Average Credit Score:
| Texas | 651 | California | 672 |
| Nevada | 655 | Florida | 673 |
| Arizona | 659 | Colorado | 674 |
| New Mexico | 663 | Alaska | 674 |
| Louisiana | 663 | Indiana | 676 |
| South Carolina | 665 | Alabama | 676 |
| Oklahoma | 666 | Washington DC | 677 |
| North Carolina | 667 | Kentucky | 677 |
| Mississippi | 668 | West Virginia | 679 |
| Georgia | 668 | Tennessee | 679 |
| Arkansas | 668 | Michigan | 679 |
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North Carolina State Employees Credit Union
Weird things that affect your credit
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Recently a news report aired that brought to light some interesting and annoying, even downright weird situations that negatively impact your credit score without you knowing it. Did you know that: If you cancel or close a credit card, even if you have a stellar track record with it will in fact lower you credit rating? The reaction has been universally the same: "What! You mean to say . . . that cancelling a credit card, even one that has been kept in good order, can negatively impact your FICO score. This seems unreasonable, even unfair, and almost downright un-American. Is there some reason that makes it all right for the credit bureaus and scorekeepers to do this?"
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Thought I won’t say it’s necessarily "un-American", as it happens around the world, it most certainly seems unfair… even illogical. Upon closer inspection we discovered that getting dinged for choosing to cancel a credit card is just one of the weird and unexpected ways you can negatively impact your credit scores, those tiny little set of numbers that lenders use to judge you and your creditworthiness. You’ll also be penalized for:
1) Transferring credit card balances (for instance: transferring your balance from your current credit card to a low interest rate card).
2) Settling debts.
3) Using cards that are limitless.
4) Opening accounts, both when you apply and for as long as a year afterward.
5) They go so far as to look at things on a large scale, when have any library fines, parking tickets or other penalties, have taken a buy now and pay later offer, that to will affect your score.
Before making any credit related decision you may want to speak with a trusted financial adviser. Typically the highest rated impartial advice may be found with not for profit credit unions like the North Carolina state employees credit union (also known as NC state employees credit union). As a side note, there are more benefits to working with not for profit financial cooperatives. These credit unions help stabilize other financial institutions and keep the system in check by making sure everyone is able to get competitive rates, fees and unbiased advice.
In recent consumer surveys by Evergreen credit and consumer credit counseling, overland park, KS has been rated one of the top firms for credit repair and advice along side with NC credit union. Check them out for more information.
Next week we’ll take a look at what you need to know and what you can do to minimize unintentional damage to your scores and more advice from consumer credit counseling, overland park, KS. For a closer look at National debt and the cause of the national debt see our post.
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About Us
Credit is a buzz word all over America these days and yet there are still so many individuals and families that are not properly educated in the ins and outs of credit. Here are Consumer Credit Report we endeavor to clear up the buzz around credit and help the average person truly understand credit and what they can do to improve, maintaining their credit and prevent awful situations like indent theft, fraud and damaging their credit score. With over a decade in the lending industry, having consulted for the CRA and having partnered with an experienced lawyer specializing in tax and credit law, we are well equipped to enlighten America about their credit. We are constantly updating the site with new articles and news surrounding the ever changing world of credit.
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