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A Measure of Credit Repair Progress
If you are planning to start a credit repair effort you might want to establish a benchmark for your progress; some objective means of marking the results of your efforts. Your credit scores are the logical way to measure your improvement. But getting your credit scores is not as simple as it seems. If you attempt to buy your scores online you are likely to encounter a dizzying array of options, many of which make little sense. It turns out that there is not just a single score, nor are there only three, one for each credit bureau. The crazy reality of the credit score market is far less clear. Are you ready to explore the world of credit scores?
It Starts With the Credit Bureaus
In brief, the three credit bureaus maintain credit data on consumers. Credit scores are based on this credit bureau data. Lenders base their lending decisions on a score called the FICO score. Lenders purchase these FICO scores from the credit bureaus, but the credit bureaus do not own the FICO scoring software, they license its use from Fair Isaac Corp, the creator of the FICO model.
One Score Three Names
The credit bureaus rebrand the FICO scores they sell to lenders. Experian calls their FICO score the Experian/Fair Isaac Risk Model, Equifax calls theirs the BEACON score, and TransUnion calls it an EMPIRICA score. All of these scores utilize the FICO software. The reason that there are differences in your three FICO scores is because creditors do not all report to all three bureaus. In addition, there are timing differences in the release and processing of data between the creditors and the credit bureaus; if you pay off a credit card Experian may update your balance in three weeks, Equifax in five weeks and TransUnion in eight. In addition, Fair Isaac updates their software from time to time, and the credit bureaus do not all adopt the new release simultaneously.
The Plot Thickens
So far we have described the relationship between the credit bureaus, Fair Isaac, and lenders. Unfortunately, there is more to the story. In a perfect world if you wanted your scores for credit repair or other purposes you would just purchase them from the credit bureaus. You would then know exactly what a lender will see when they make a decision on your loan application. But the credit bureaus have decided not to sell FICO scores to consumers. Instead, with the exception of Equifax, who sells a genuine FICO score, they have created their own credit scores and sell them to consumers. These bureau scores have little numeric resemblance to a FICO score, often differing by over 100 points. This is completely useless for credit repair, and not only because of the numeric difference, they also behave differently; you can’t optimize your FICO score by optimizing a bureau score.
Ignorance is Not Bliss
If this leaves you wondering why anyone would spend good money on a credit score that has no resemblance to the score that a lender will see, I’m sorry to say that the reason is that the millions of people that buy these scores do not know. And the reason they don’t know is that the disclosures provided by the credit bureaus are almost impossible to find. It is a fact that if Experian and TransUnion were to put their disclosures in plain English, in plain sight, no one would buy their scores.
Your Credit Repair Problem
But let’s go back to our little problem. You are getting your credit repair project rolling. Where can you get your real FICO scores? Prior to February 13, 2009 you could go to MyFICO.com, the Fair Isaac website and purchase all three FICO scores. But as of February 13th Experian has declined to let Fair Isaac sell the Experian FICO score. This has raised a cry of concern from many consumer advocates, but the fact still remains. At the time of this writing you can only purchase your Equifax and TransUnion FICO scores.
The Solution
Work with what you have. Get your two FICO scores. If you want all three scores to benchmark your credit repair results the only option now available to you is to get them through a lender. This may not be as hard as it sounds. If you plan to get a mortgage in the near future you might contact a mortgage broker. They will run your credit as part of the pre-qualification process, and if you ask, they might give you a copy of your report which will show all three scores. Good luck!
Ian Webber is an expert in consumer law and credit repair. Ian is a graduate of the London School of Economics and The University of Chicago where he earned his LLM. Ian consults with one of the leading online credit repair services and is currently based in Florida.
Once upon a time, shops on the High Street had cash registers allowing shop owners to accept cash payments from their customers. Making cash payments was the norm and it has only relatively recently become the case that cash payments are steadily becoming less popular, with preference being given to payments made on plastic.
It wasn’t until 1966 that Barclays released the UK’s first credit card. 21 years passed until the UK saw the release of its first debit card, again from Barclays. Since then the ease of use that plastic cards bring has caused the withdrawal of cash from banks and ATMs to be less important because debit and credit cards have saved the public from what used to be a necessary chore. The fact that in 2001 over half of UK retail spending was made on plastic shows just how popular payment on plastic is and therefore highlights the importance of merchant accounts for any business.
The ability to receive payments from multiple debit and credit cards opens up a whole stream of different payment options for the customer and removes any potential obstacles a customer may have to overcome in order to make a purchase from your business. Unfortunately, I could not buy a birthday card from an independent gift shop the other day as I had no cash on me and as I needed to get a card sent my only other option was to go down the road to Clintons and pay for a card on my debit card. The independent card retailer lost a sale that I was more than willing to make because I could not pay on my card. Perhaps twenty years ago I would have always made sure I had cash on me before going shopping, but due to our reliance on plastic today it is not necessary to always have cash to hand. This is a pressing reason why any business should have a merchant account. Losing a sale because you only accept cash is no longer acceptable. McDonalds used to only accept payment by cash but even though most sales are under £10 even they now accept card payments. Whilst to make sure you don’t lose a sale is a strong reason to have a merchant account it is by no means the only reason.
In recent years the Internet has provided retailers with a means to sell their products with further reach and exposure than seen ever before. The only way to pay for goods purchased over the Internet is by card and therefore a business without a merchant account cannot harness the power of the Internet and make online sales. If to make your products available online is the only reason then this justifies having a merchant account in itself. However, there are other benefits of merchant accounts.
Making purchases with a card rather than cash gives the customer a sense of security as there is an automatic record of the purchase. If the only payment option is cash this could be the difference between making the customer feel secure and whether you make or lose the sale.
Merchant accounts not only benefit the customer but they benefit the business owner also. With monthly statements they help to keep track of your financial records so with the benefits to business owners as well as customers with the vast amount of transactions made by card merchants accounts are a must have for any business.
It’s the same problem each and every year. You need to spend hours poring over the most recent instructions for the federal and state 1040 forms ? which are only minutely different than last year’s, but you have to be sure you aren’t missing some evasive new tax law ? then another few hours compiling all your documents in an order than makes some sense. Once that’s done, you begin the tedious process of computing each individual line and printing your responses in painstakingly neat handwriting just to know for absolute certainty that someone at the Internal Revenue Service won’t bounce your return back as unreadable.
Your return has been signed, placed in an eight by ten manila envelope and mailed to the IRS. Even though you mailed it registered, with return receipt requested no less, you worry that it never made it, that someone lost it, or that some small error will come up and push you beyond the looming April 15th deadline.If you haven’t started using computerized tax filing software, this probably isn’t so far from the truth. You may have heard of these programs and passed them off as not worth the investment. Each and every year, tax payers spend at minimum eight hours, and usually closer to fifteen to twenty hours, completing their tax returns. Even earning minimum wage, that eight hour time investment would have returned nearly sixty bucks at work ? substantially more than the cost of completing and eFiling your tax return online.Not only does eFiling save you time, it saves you money. Since these programs are made to know the current year’s tax code, you can avoid many common mistakes. You don’t need to worry about incorrectly computing a specific line or claiming a deduction that isn’t actually deductible. Using these programs will prevent many seemingly minor errors which often result in hefty fees and fines from the IRS.Once you’ve completed your return on your computer, eFiling is the best way to submit it. The IRS’s strict standards for eFile providers ensure that your return will be transmitted securely. With the “Free File” program, you may even be able to eFile your federal tax forms without any processing fees. Best of all, the eFile provider will keep you up to date on the status of your return, from submission to processing, so you never need to worry that the IRS hasn’t received it.Because of the popularity of this method, all but two states (and those that don’t have an income tax system) also offer electronic systems to file state income tax forms. While the tax forms vary from federal to state, you almost always need the same information. If you use tax software to complete and eFile your federal return, chances are you’ll be able to do the same with your state return.
There are really no rules in place that stipulate why or what reasoning is being used by credit card companies to lower consumers’ credit limits on their accounts. Normally, the consumer has an idea why the card company has taken certain steps to limit their risk if the consumer had knowledge of a late payment or went over their credit limit, but now the only reason seems to be is that you are a credit cardholder with an outstanding balance.
Many consumers when receiving their monthly statement are finding their credit card limit has been reduced or their interest rate has been increased without warning. What is true and understood by most consumers is that once their credit limit is adjusted, it also may result in a change in their credit score.
Most consumers are asking how credit card issuers are making the decision to lower their credit limits especially if their credit score is over 720, they have never been late making their payments, they have not gone over their credit limit and they have no negative information in their credit report. The easy answer would be because of the current economic situation. However, there are other factors that will affect your credit card limits also.
First, every account has a statistical value based on usage. Credit card accounts paid in full or that are rarely used are of no value to a credit card company. There simply is no money in it for the company because the cardholder is not paying interest on a balance, there are no annual fees associated with the account and most importantly, these type of consumers are rarely accessed transaction fees when they do not follow the terms and conditions on their credit card account.
A second factor is risk quotient. Credit card companies now consider more heavily whether it is likely a customer will be delinquent on their account. Remember, your creditors pay the credit reporting agencies for your financial information. If a credit card issuer sees where you have defaulted on another credit card account, the credit card company in an effort to protect their financial interests will take the appropriate action to decrease their risk.
And last, you do not use enough of your credit line. Credit card companies are now reviewing your spending patterns and in some situations will reduce your credit limits accordingly. There is a term used for this practice, it is behavioral analysis where card companies evaluate where you spend your money and how much.
If you have not used your credit card in awhile it sends a red flag to your credit card company which could result in your card company reducing your credit limit or even closing your credit card account. Keep in mind that you are still responsible for any outstanding balance on your account and that your credit history with the company remains intact for review.
Granted, interest rate increases and dramatic reductions in credit limits can send consumers deeper into financial stress, rather than encouraging them to pay their bills. Credit card companies are focusing on reducing their risk, which means they will take the necessary measures against consumers so they are not left holding the bag.
If you pay on time and are never late, you may still be considered a risk. Currently, card issuers are reviewing your payment habits, credit score, and even where you shop to determine how likely you will be to default on your account and become a risk to them. In this economy, the banks definition of risk is changing which benefits them in more profit, but the consumer is hit again with higher payments, less spending power and nowhere to turn for help.
Janice Devereau is an internet, affiliate and network marketers with interests in health and wellness, credit repair, debt management, self-improvement and travel. For more information, visit my website at http://www.j6financialsolutions.com/eraseyourdebt.htm.
Obama hailed the G20 summit as historical, which hopefully it will prove to be, but peoples’ day to day reality is certainly not going to change overnight.
The G20 summit termed the times that we are living in as “the greatest challenge to the world economy in modern times”
A fast cash payday loan is becoming an increasingly popular solution in these challenging times.
However the G20 summit state that they believe that prosperity is indivisible and growth has to be sustained and to be shared.
They have pledged to do what is necessary to:
1. To restore confidence, growth and jobs 2. To repair the financial system to restore lending 3. To strengthen financial regulations in order to rebuild trust 4. To fund and reform international financial institutions to overcome the crisis and prevent any future ones 5. To promote global trade and investment 6. To build an inclusive, green and sustainable recovery
It’s not that this doesn’t sound promising and positive but it will take time to decide on the specific measures and then actually to implement them, and then eventually for the ripples of positive reaction to show their effect.
Ireland, where the Celtic Tiger used to reside, has unemployment at the highest since 1996.
The International Monetary Fund and other lenders have agreed in principle to lend 20bn to Romania, and they have already provided loans to Latvia and Hungary.
Job losses continue everywhere, and here in the Costa del Sol, Spain, one of the most expensive 5 Star Hotels has not paid their staff for 4 months.
There’s no escaping the crisis, and as it is called in Spain “La Crisis”, and I wonder will the fact that the Spanish Prime Minister, Rodriguez Zapatero and Obama can now call themselves friends make much of a difference in the near future to the huge job losses in Spain, and of course across the United Kingdom and all of Europe.
The Italian Prime Minister, Silvio Berlusconi, on 4th April 2009 had such a pressing phone call to take on his mobile phone that he could not possibly greet his hostess Angela Merkel, who was rather bemused and puzzled by his behavior.
In fact he walked away from the venue and continued on talking, to the disbelief of even his own security team, and was nowhere to be seen to cross over the European bridge to the French side. He missed out on most of the proceedings only to turn up eventually for the second group photo.
But in the United Kingdom the public finances have become so bad since November 2008 that the basic income tax rate would need to increase by 8 percentage points to bring government borrowing back on track by 2015-2016, a statement released by the Institute of Fiscal Studies on Monday 6th April 2009.
In the Financial Times, Philip Lane, Professor of International Macroeconomics at Trinity College Dublin, certainly feels that the initial phases of the G20 can be implemented effectively and on time.
It is further down the line that needs more attention, especially bearing in mind that the execution of the policies which relate to domestic banking systems and aggregate demand management will be in the hands of the national governments, with a degree of shared sovereignty.
We will all be watching very closely, and live in hope that the correct measures can be carried out and that the spirit in which worthwhile G20 decisions have been made will be kept alive for a long time. For those who wish to source a fast cash payday loan, you must be over 18 years of age.
Have you worked hard to reduce your total debt balance only to find you are in a yo-yo pattern? Debts go up and down and each up exceeds the previous one, and over time your debt actually increases. To escape the debt yo-yo something must change.
Making the change, however, can be as challenging as losing weight. For example, I have lost about 500 pounds in my lifetime. Each time the scales tell me my weight is excessive, I set a goal for the pounds to lose, and select the diet. (Any diet gets results. Some diets appeal to me better than others.) My usual goal is somewhere between 20 and 30 pounds. Success! Now, the diet is replaced by my old lifestyle. Before I know it, the weight increases. I not only regain what I just lost, but I add a few extra pounds. Then, I start the cycle over again.
Debt habits follow the same pattern. The yo-yo-effect keeps an upward movement in debt balances over time. Significant debt reduction calls on solid efforts for a year or two, and balances respond downward. The good feelings of success trigger relaxing our efforts and old habits return. Debt balances again begin to increase.
How can debts move higher than the previous level? For one thing, when credit card companies see your regular payments reducing balances they will often increase you card limit or reduce the interest rate or both. Other credit card companies offer you a new card with special deals of one kind or another. Both of these approaches encourage you to increase your credit card debt; thus, the debt balances move upward.
The lesson I failed to learn from my yo-yo cycle in weight loss, which likewise applies to debt management, is to maintain a relatively level position, reduction must be accompanied by a maintenance program. This means developing new habits, not a return to old ones. Hence, you stop the yo-yo effect in managing your debt balances.
The pattern you want is simple enough. Many programs reduce debt. When you have reached your goal, establish personal policies and practices to maintain your new desirable level pattern. Escape the yo-yo!
About the Author
Lane Anderson, CPA advises individuals and couples first on reducing debt and, second, on implementing self-reliance principles and practices to manage debt effectively. To begin with, get his free copy of “5-Step Fast Start Plan to Debt Reduction” is available at http://www.debtreducingtips.com
Trying to get out of bad credit is a challenge for anyone. Sadly, some people resort to actions that only aggravate the problem instead of solving it. Students especially are prone to committing wrong actions when trying to get out of debt. If you are stuck in bad credit, what are the actions that you should avoid? Get a payday loan to pay your credit card debt. Payday loans offer a quicker way to getting cash for emergencies but paying debt shouldn’t be one of those emergencies. Yes it’s true that you’re guaranteed to get a payday loan regardless of your credit score but using it just to avoid delaying or missing on your credit card payment is unreasonable.
Why? Because you’ll be surprised at how your fees will soar especially if you fail to pay it back on your next paycheck. Don’t put yourself at risk to incurring more debts than you already have.
Taking out cash advances from your credit card. Don’t be tempted to take out a cash advance from one your credit cards just to pay your unpaid balance with your other credit card. A cash advance incurs interest right after you got the money so if you think you’re helping yourself get out of bad credit, you’re actually only digging yourself in to deeper debt. Never use your credit card to make a cash advance.
Using your retirement savings to pay off your credit card debt. You should be aware that when you take out money from your retirement fund, you won’t be able to get your money in full. You will be charged with 10 percent penalty fee for withdrawing your funds prematurely plus you will be taxed for the amount you took out leaving you with just about 65% of the original amount you withdrawn.
Obtaining a home equity loan to pay your credit card bills. Putting your home in the line is a very, very risky move especially if paying back on time is what put you in debt in the first place.
Experiences prove that there is a tendency for people to continue spending because they have a home equity loan to rely on. In the end, they found themselves stuck in more debt than they can afford to pay and even worse, they also put themselves in danger of losing their home property.
Carelessly transferring balances to another credit card. It is true that transferring over your balances to a credit card with lower interest rates can help you get off your debts more easily. But don’t be too careless about it.
Some credit cards may entice you with a 0% introductory interest but if you don’t check how much the interest would be after the introductory period expires, you may be surprised to see that this card imposes even higher interest rates than your past credit card. Study the terms and conditions first before transferring over your balances. More importantly, make sure that you can pay off the balances you transferred before the introductory period expires. About the Author Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on credit cards for bad credit,credit cards for good credit and other credit-related issues. Its main objective is to help people build good credit.
Identity theft is one of the easiest crimes to commit for many thieves. In most cases, they never even have to come face to face with you. The risk is low for them, making your risk of becoming a victim of identity theft very high.
The U.S. Department of Justice defines identity theft as a crime in which “someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.” Basically, someone uses your information or credit to purchase things that they won’t have to pay for – you will.
In 2008, an estimated 9.9 million U.S. consumers were victims of identity theft, according to Javelin Strategy and Research. In order to clear up the mess left behind by the thief, the victim spent an estimated 25 hours trying to resolve the fraudulent charges and lost an additional $500 in the process.
Victims of identity theft don’t only have to deal with the damage done to their credit and pocketbooks. The emotional toll of becoming a victim of the crime can be devastating in many cases. One of the most overpowering feelings is one of simply not knowing what to do. Here is where you should start.
Contact the Credit Reporting Agencies
As soon as you realize that your identity has been stolen, you should contact the 3 major credit reporting agencies. You don’t have to contact each agency separately, the law requires the agency you call to contact the other two with your report. A flag will be placed on your account requiring any business that tries to view your credit report to verify your identity first. You will then receive 2 free reports from the 3 agencies over the next 12 months. You can reach the credit reporting agencies at:
If you have had your credit cards stolen or any unauthorized charges on your accounts, you should contact the credit card companies. Ask to talk with someone in the fraud department. Make sure that you write down when you call and the name of each representative that you speak with. The law gives you 60 days from the date you normally receive your bill to dispute any charges on your account. If you are within this time frame, your losses for unauthorized charges are capped at $50. Hopefully, your credit card issuer will work with you so that you aren’t liable for anything. Contacting your issuers as soon as possible will allow you to have new accounts set up and stop any further unauthorized charges to your accounts.
It is a good idea to keep a record of all conversations with agency, name, phone number, date, and time called. You will want to follow up all of your phone conversations with a letter that outlines who you spoke with and a summary of the conversation. Remember, if it isn’t in writing, it may not legally exist. Always mail letters using certified mail, return receipt requested.
Notify Your Bank
Closely go through your bank accounts and look for any suspicious debits or withdrawals that cannot be accounted for. If you believe that the security of your bank account has been breached, you should immediately ask your bank to close your account and notify its check verification service. This service notifies retailers and asks them to not honor checks written on this account number. If you are unsure whether or not someone is writing bad checks in your name you can contact the Shared Check Authorization Network at 800-262-7771.
You can also contact the Chex Systems at 800-428-9623 or www.chexhelp.com and ask for a free copy of your consumer report. This service is used by many banks and can help you find out if someone has opened a new checking account in your name.
Contact the Police
As soon as you have safeguarded your finances from any further damage, you should contact your local police or sheriff’s department. Make sure that you ask to receive a copy of the police report; your creditors and banks may want to see it. In many cases, creditors who have been victimized by an identity thief using your name will ask for a police report. You may also find it beneficial to report the crime to your state law enforcement agency. Be prepared to give the police copies of all the documents that prove you are a victim of identity theft. Keep all of your original documents. The Federal Trade Commission has an ID Theft Affidavit that you can fill out and submit to law authorities. It is available for download at www.consumer.gov/idtheft.
You may have to contact the police where the crime was committed, not just your local police. Be prepared to talk with law enforcement officials in other localities and states if necessary. Your local law enforcement or creditors affected should be able to tell you if you need to contact other agencies.
Other Agencies That Can Help
There may be other agencies that you need to contact given your individual situation. When in doubt, call anyway. It is amazing how having your wallet stolen can go from losing cash, to having your credit cards charged up, to having utilities being opened in your name. Having your mail stolen can lead to someone wiring money from your checking account or opening new credit cards in your name. The best way to prevent further losses is to act first.
You can contact these agencies for more help:
-Social Security Administrator’s Fraud Hotline at 800-269-0271 -U.S. Postal Inspection Service at 888-877-7644 -Internal Revenue Service at 800-829-0433 -Federal Trade Commission at 877-IDTHEFT
It will take time to repair the damage caused by identity theft. It won’t be cleared up overnight; you must be both patient and persistent. But by taking action quickly, you will prevent further damage to your credit, your finances, and your good name.
About the Author
Ryan Smith: Credit and personal finance blogger for www.spendonlife.com. Focusing on credit reports, credit scores and identity theft.
This is a trip on a tangent. It’s about getting the vacation you so desperately need and deserve. Here’s a tactic you might not have considered in the past. It involves a bit of work, but it could lead to a lucrative second income — or even a new full time career. And it’s perfect for those of you who love to travel. Yes, you could learn to become a global travel agent.
Now, before you start laughing saying that you got into trouble by overextending your reach (in location, acquisitions, good times, etc.) let me just say that the travel agents I know are really good at helping people have a good time. And that’s what I’m getting at. As a travel agent you derive a good time by helping others have a good time.
Let’s not forget the benefits of being able to book your own travel as a registered travel agent. And, it wouldn’t be worth it much if you could not take advantage of those added bonuses. Bonuses like discounted fairs, the best seats, and so on.
Have a look at their site. Let me know what you think. If you love to travel, and if you can see yourself taking a trip after you’ve made some money as a travel agent and paid down a few debts, then this might be an option for you. Check it out today — Global Travel International!
Have a look at this video, “Insider Techniques To Raise Your Credit Score FAST!” Next week, I’ll (finally!) let you in on how the December Debt Dig-Out turned out. Hint/Preview: it didn’t turn out so well, and I’ll give you all the sad details. Stay tuned.
Valery "Val" Mackie is an ordinary citizen of the United States of America (probably not unlike yourself). Her mission is to fix her credit report by January 3, 2009, while showing you how.
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Valery "Val" Mackie is an ordinary citizen of the United States of America (probably not unlike yourself). Her mission is to fix her credit report by January 3, 2009, while showing you how.
