CREDIT SCORES

Are you struggling to obtain credit in this extremely difficult economy? You need to know that your credit scores, which are a reflection of your past financial behaviors, are viewed as the barometer to your financial health and is the ultimate tool that credit providers use for deciding what type of credit rates and lines you will be approved for. Be careful of securing and using store credit cards as they can actually harm your credit record.

Having a good credit score is one of the most important indicators of your financial health.

With time, good spending habits and a little effort, you can see your score increase. We’ve compiled a list of the best credit repair tips that will definitely give your score a boost. Many of them may seem like common sense, but you’d be surprised at how many people don’t really understand what factors affect a credit score.

The credit bureau Experian announced that it will be terminating its agreement with Fair Isaac that allows FICO scores to be available to consumers based on its data. The news comes as a surprise to consumers who rely on access to this data to judge their own creditworthiness.

Why Are They Doing It?

After 6 years of partnering up with Experian, representatives from Fair Isaac are scratching their heads in confusion as to why the credit bureau made the decision. However, the credit bureau explains that while it is eliminating access to FICO score information, it will still allow access to its own data-generated VantageScore. The only problem is that very few lenders rely on this score to make lending decisions, which means access to this score won’t help provide the information consumers need to make borrowing choices.

If you have ever had a credit card stolen or been the victim of identity theft, you know how a wrong negative item can wreak havoc on your credit score. Even misinformation and simple human error can result in mistakes and negative items on your credit report. For example, you could pull your credit report tomorrow and find out that someone in Texas shares your name, but not your history of on-time payments – and their credit card account has been mistakenly attributed to your file! If that happens to you, you’ll want to know how to correct any wrong negative items in your credit report.

In order to dispute an error in your credit report, it’s advisable to send a letter to the consumer credit bureau (or bureaus, if more than one report is inaccurate) and notify them in writing of the erroneous information. In your letter, you should identify the item or items you dispute, explain your position and request that the information be removed or corrected. It helps to include copies of any documents that support your dispute, such as letters from the creditor confirming that you have paid off the account.


Some credit bureaus also allow you to dispute negative items on your credit report online, at their website. While this may save time, it is not always as effective as sitting down and typing an old-fashioned letter – if for no other reason than that it gives you documentation to support your case.

What is an “Investigative Consumer Report,” and how does it differ from a credit report? As it turns out, there is quite a substantial difference between an investigative consumer report and a credit report.

Your credit report is a collection of data, gathered from your creditors, which summarizes your credit history. When you apply for the credit, your bank, credit card company or mortgage lender uses your credit report to evaluate the potential risk of lending money to you. Although the data can be boiled down to a three digit numerical score, it makes no inference about your general reputation or character. You could be a falling down drunk and a wife-beater, but as long as you pay your bills on time, your credit report will be spotless.

An “investigative consumer report,” on the other hand is a form of credit report that is more like a detailed background check. In addition to covering your general creditworthiness, it also involves the gathering of information on your “character, general reputation, personal characteristics or mode of living.” The gathering of that information may even include interviews with your neighbors, friends, and other associates about your lifestyle, character, and reputation.

If you declare a Chapter 13 bankruptcy, it remains on your credit record for 7 years. A Chapter 7 bankruptcy will leave its mark on your credit history for even longer: 10 years. In either case, your credit score will plunge and you will find it difficult to get any form of credit during that time. However, while a bankruptcy can deal a devastating blow to your creditworthiness, the effects do not have to be long-lasting.

While a bankruptcy filing will remain on your record for the full legal term, you can begin to diminish its effect the day after it is filed by adopting good habits with your credit and not biting off more than you can chew. Here are a few things that you can do to help raise your score and build good credits after bankruptcy.


First, there are two forms of credit you will need to rebuild if you have filed for bankruptcy. Those are:

They say breaking up is hard to do, but can it be hard on your credit score? Unfortunately, the answer can be yes if you are not careful. Many married couples have joint obligations such as a mortgage, car payment, or joint credit accounts with banks and department stores. Technically, the credit of your spouse or family member should have no bearing whatsoever on you, unless you have co-signed for an account and you both fail to meet the terms of the obligation. However, unless you both come to some agreement about how to handle joint accounts before, during, or immediately after the divorce, you may be in for some nasty surprises down the road if your ex decides to be spiteful.

For instance, what if you come home one day and discover that your spouse has run up an exorbitant credit card debt in your name, without your knowledge? You may have a hard time proving that you were not responsible for the debt. If you are the primary card holder, you will probably be held responsible for this unless you can prove that it is a case of outright fraud. For instance, if your ex re-opened the account after your divorce, or forged your signature, that would be a clear cut case of credit card fraud. Even so, you will have to have proof, and will probably need to write a few letters to the bank to get it resolved.

Are you tempted to opening a department store credit card to save a buck when shopping? Many retailers offer in-house department store credit cards that may provide an immediate discount for opening the card. However, there are some disadvantages that need to be considered before opting into their credit card program.

You’ve probably seen the advertisements on television from auto dealerships who claim to be able to work with any buyer to get an auto loan, regardless of your credit history. “Bad credit or no credit, as long as you have a job, we can get you a guaranteed auto loan!” This seems to be the motto of this sort of dealership. But how exactly are they able to offer auto loans for people with bad credit, when no one else will take on the bad credit borrower?

Auto dealerships can choose to offer you a loan if you have bad credit because they are the ones extending you the credit. There are a few things that will allow an auto dealership to offer guaranteed auto loans for bad credit. The first thing you should know about these loans is that the interest rate on a bad credit auto loan is almost always going to be higher than financing that you apply through for through a credit union, bank or other financial institution. Sometimes auto dealerships will charge up to 20% interest on a bad credit auto loan. Over time, this high interest rate will make it almost impossible to pay off a bad credit auto loan.

It’s not uncommon for credit card companies to raise your credit limits; they do so to benefit you – or do they? The truth is that it depends on who you ask. Many people struggle to have their limit raised, while others have their limits raised automatically. There are a variety of reasons that some find their limits raised while others don’t. Let’s take a look at the criteria that fit both scenarios.