Adam Tijerina asked:




Due to the recent credit crisis and housing collapse leading rules have changed dramatically. Despite historically low mortgage rates, most people cannot qualify for them without a really good credit score. This is why it is very important to get your free credit scores and know where you stand and know where you have to improve to get the lowest mortgage rate.

So where can you get free credit scores?

Several sites now offer free “credit scores” which are based off of scoring formulas similar to the national credit bureau formulas at TransUnion, Equifax, and Experian. The accuracy of these scores is debatable. Comments on a recent Wall Street Journal article stated these scores are not reliable when it comes to mortgages and refinancing.

These sites are credit.com, creditkarma.com and quizzle.com. They can provide you with an estimated score range instead of an exact score and you can expect loads of advertisements all over the site with many offers you are encouraged to sign up for.

Why doesn’t the government provide free credit scores in addition to free credit reports?

The easy answer is they were not part of the arrangements with the credit reporting agencies who are now required by law to provide them for free. They are only required to provide your free credit reports and that’s just what they do. They can still make money selling you the credit scores and that’s just what they do.

You can expect to pay around $8-$10 for each credit score so that’s around $24-$30 each time you want to check your scores. And then the experts tell you to check them every few months so you can easily spend over hundred dollars over the course of a year.

So where does that leave you?

You can go to sites that you see advertised on TV and sign up to get your free credit reports and scores from all three credit reporting agencies.

Doing this will allow you to monitor your credit score on an ongoing basis so you can check your credit worthiness in less than a minute instead of having to sift through 20 to 30 pages of your credit reports trying to decode all the abbreviations.

Getting your free credit scores this way does not lower your score because it is a soft inquiry instead of a hard inquiry which can lower your score. And you will be able to keep track of any suspicious activity in your credit report that could affect your score or result in identity theft.

Kevin

Toddy Martin asked:




Are you credit worthy? If you are, the next question would be, how credit worthy are you? Some companies might not be using the exact wording but at least before they lend you the money, their thoughts revolve on this particular idea.

Just how important is it to be credit worthy? If credit worthiness is defined as a debtor’s willingness to repay a debt, then apparently, it must be of utmost consideration to every debtor. Money lenders are in business because they want to make money, not to lose some. And no lender will take chances in giving loans to a person who does not seem to be credit worthy at all.

But how do these lenders or lending institutions weigh the credit worthiness of a person?

Your credit report will most likely contain the vital information needed by lending institutions to assess whether you are credit worthy or not. Truth be told, not everyone uses the same standards for assessment but at least there are common denominators in the assessment game. You can be assured that payment overdues, whether 30 days or 60 days or even longer, will leave a negative mark on your credit report and will almost certainly taint your record. Because if you are all the more willing to pay back the person or the institution which lent you money, then you should have given much thought about paying it on time.

Another parameter to consider is your monthly income. Most lenders have become quite dependent on this factor because of the simple logic that the person with a higher income has more money to repay his or her loans. Haven’t you noticed how the well-heeled can access more credit, apply for multiple credit cards, and breeze through mortgages? It might sound unintelligent because they are supposedly wealthy and they do not need to go through the process of availing loans because of their status. Someone with a lower monthly income needs it more than they do.

But of course, as the years pass, there have been specific guidelines to accommodate even laborers with meager salaries. There are actually instances that people who have lower income can access more loans compared to their more privileged counterparts. What specific instances are these? When people with more income have become delinquent borrowers and have built a disappointing credit history through the years, that is when creditors become wary of lending them once again.

Philip

Roy Leadwell asked:




A Bankruptcy on your credit report can be devastating for you. If you try to get a this will be the first thing the lender will see and it will show you as not credit worthy. You will hear a lot of people say that it is impossible to remove a bankruptcy from your credit report. The truth is that you can dispute any type of negative mark on your credit report.

It is important to remember that it is the credit bureau is responsible to verify any information that is on your credit report, whether any negative information is your account or not, if they can not verify it, they must delete it. The Fair Credit Reporting Act, puts the burden of proof on the credit bureau. Always remember to be truthful with any information on your credit report. It is important to know that the credit bureaus do not investigate public records and the courts do only verify such records in person. They will claim that they can verify your records, but they don’t. It is important for them to know that if a consumer were to seek litigation and monetary damages in a court of law, they would loose, big time.

It is important to be persistent with making sure your credit report is accurate and that you need to dispute anything you find to be inaccurate on your credit report. You have to make sure you check your report often and that you follow up when you make a dispute to see if it has been removed or not. Remember that your credit is the first thing a lender looks at when determining your credit worthiness.

Dennis

Alexander Wright asked:




A consumer credit report is a limited record of your personal information as it relates to your consumer credit activities. It is primarily used by lenders and creditors to determine your credit reputation or credit worthiness when deciding to extend you credit or grant you a loan. Although numerous smaller credit reporting agencies (CRAs) exist, there are only three major credit reporting agencies (CRAs) that are widely accepted; TransUnion, Equifax, and Experian. The consumer credit report is separated into a few major categories with the most common being Credit History, Public Records, Collection Accounts, Inquiries, and Personal Information.

The Credit History section displays some of the most common information that you would expect to see on a consumer credit report such as real estate mortgages, credit cards, lines of credit, personal loans, and auto loans. While displaying some of the most common information that you might expect to see such as the account name and account number of each account, this section of the consumer credit report also displays the status of each account and whether it is current or past due in payment. This section of the consumer credit report goes into further detail by displaying the balance, minimum payment due, and payment history of each account.

The Collection Account section of the consumer credit report displays information on accounts that have been charged off by the creditor and sent to collection agencies. The collection name and collection number should be exhibited along with the original creditor’s information. It should also exhibit the date in which the account was charged-off and sent to collection along with the dollar figure the collection agency is seeking to recover.

The Public Records section of the consumer credit report is reserved for county and state court records & displays such items as foreclosures, bankruptcies, judgments, and tax liens. While numerous consumers do not have items that fall into this category, it is not uncommon for this section to be missing from the consumer credit report. Foreclosures, judgments, bankruptcies, and tax liens/civil liens are considered to be some of the most derogatory items that can be found on a consumer credit report. They have a very serious negative impact on the consumers credit score and a tremendous influence on a creditors or lenders decision to issue credit or grant a loan.

The Personal Information section of the consumer credit report consists of numerous items such as your full name, current and previous addresses, any known aliases, social security number, year of birth, current & past employers. If available and available, this section will also exhibit similar information about your spouse.

As some of the terms used in this article may be unfamiliar to you, I have listed numerous terms and their corresponding definition below in order to help you understand the common consumer credit report.

Credit Report: A complex report containing the credit history of a consumer. A consumer’s credit report is generated by a credit reporting agency and contains information provided by the consumer’s present and past creditors to be used in determining the consumer’s credit worthiness.

Credit Reporting Agency: Credit reporting agencies, often referred to as credit bureaus, are companies that collect, manage, and report information received from creditors and collection agencies regarding the individual consumer. The three largest and most commonly known credit reporting agencies are: TransUnion, Equifax, and Experian. Many consumers believe these companies to be official government entities, which is a common misconception. In fact, they are for-profit companies.

Collection Account: A debt that is considered to be a loss or expense by the creditor. The creditor will attempt collecting that debt through the use of an internal collection department, outsource the account to a contracted collection agency, or sell the debt to a third party for a reduced price.

Chapter 7 Bankruptcy: The most common form of consumer bankruptcy, Chapter 7 Bankruptcy typically releases a debtor from any and all liability for the credit accounts included in a bankruptcy. In exchange, the debtor must usually forfeit some personal property. A Chapter 7 bankruptcy remains on the debtors consumer credit report for 10 years.

Chapter 11 Bankruptcy: Although Chapter 11 Bankruptcy is normally used for businesses, it can be used by consumers in specific rare cases involving extremely large debt. However, Chapter 7 and Chapter 13 can be much simpler and provide better protection for most consumers.

Chapter 13 Bankruptcy: Chapter 13 is a type of consumer bankruptcy under which the debtor does not forfeit personal property. Rather, the consumer agrees to a three- to five-year wage earner plan to repay all or part of their debt. A Discharged Chapter 13 bankruptcy remains on a consumer credit report for 7 years from the date filed. An Open or Dismissed Chapter 13 bankruptcy remains on a consumer credit report for 10 years from the date filed.

Foreclosure: The legal process by which a creditor may sell mortgaged property to recover a defaulted mortgage.

Judgment: A determination by a court of law that, in the case of credit, may require a person to satisfy or pay a debt.

Tax Lien: A charge upon real or personal property for the satisfaction of debts related to taxes.

Civil Lien: A charge upon real or personal property for the satisfaction of some debt or duty ordinarily arising by operation of law.

Inquiry: An instance in which all or part of your credit file is accessed by a company or individual. Inquiries stay on your consumer credit report for not more than two years.

Linda