Auto and home owner’s insurance
Most Insurance companies these days are using credit scores to qualify and price their customer’s policies. In many cases and under certain circumstances, Insurance companies have the right to increase their premiums based on the credit standing of those they insure.

If you don’t have an excellent credit score, you could pay more. These companies will quote studies and statistics that back up their claims. Be aware that a low credit score may mean higher premiums on both auto and home owner’s insurance.

Employment
A lot of employers these days are using credit checks to screen their potential employees. With so many people looking for a job and the employer having plenty of applicants, employers can be more selective than before.

Many job seekers, particularly when applying for a job that requires them to deal with substantial amounts of money, find that their prospective employer will not hire them with mediocre credit scores. Although this seems a bit inappropriate and unnecessary to some, the logic behind the credit check is sound. Some companies simply respond, “If a job candidate can’t handle their own finances in a responsible way, how will they handle ours?”

More and more companies are using credit reports as part of their screening process and that means it will be harder and harder for those with low or marginal credit scores to find employment. If you are looking for a new job or there is a chance you will be in the near future, take the time to check your credit and do all you can to correct any errors. Then take the necessary steps to improve your score. Doing so, can remove the uncertainty about your credit, take a great deal of stress out of your job search and give you a much better chance of finding employment.

Rental agreements, loans and leases
It’s become common place that a credit check is required for renting a home or apartment or securing a loan or lease on a vehicle. Even if you have a perfect record of paying your rent on time at a previous apartment, you may still have to agree to a credit check. Landlords and rental management companies measure your credit risk in much the same way as banks and other lenders. A shaky credit report may disqualify you or cost you more. A credit check is almost a certainty when entering into a loan or lease for a vehicle.

Take preventive measures
It’s a good idea to carefully check your credit report before you apply for a job, take out an insurance policy or rent your next apartment.
And do so as early as possible so you can correct any errors on your report and get the excellent credit score that you deserve!
Find out how to clean up your credit report the easy way:

This free video presentation reveals how you can save over $90,000 dollars just by raising your credit score only 80 points!

Watch the free video presentation while it is still available

How we know

Before applying for a bad credit car loan it’s always a good idea to check each of your credit reports and know your credit scores. We know because at Auto Credit Express we’ve been working with poor credit retail car buyers for more than twenty years.

Another example is our web site that contains a bad credit auto loan application – something we realized was needed after seeing the confusion and frustration which customers with bad credit often experience at car dealers that fail to offer second chance auto loans.

And while bad credit buyers can always visit a local tote the note dealer, this won’t solve their car credit issues since these dealers usually don’t report loans or loan payments to the credit bureaus and their loans often end up in repossession.

Speaking of loan payments and credit bureaus, let’s discuss what a credit report actually is.

A credit report

A credit report is simply a record of your borrowing and payment history. Banks, credit card companies and many other places that extend credit usually report your payments to one, two or even all three of the major credit reporting agencies in the United States – Equifax, TransUnion and Experian. This is a type of credit known as “applied for” credit. This means that you requested to borrow money from the reporting lender.

Your credit report may also contain certain “not applied for” credit entries. These entries include items such as bad checks, medical bills and any tax liens or civil judgments – that is, bills that you owe that are not a result of a credit application.

What’s the difference? If you pay all your bills on time, you won’t have these “not applied for” entries listed on any of your credit reports.

View your credit report

Viewing each of your credit reports will also let you know if there is anything they contain that is incorrect. If there is, many of these mistakes can lower your credit score. If you plan on buying a car, knowing what’s on your credit report as well as your FICO score can tell you whether or not you might qualify for a regular car loan or if you need to find a dealer that specializes in car loans with bad credit.

The dividing line for either type of loan is not always black and white but typically, if your FICO score falls below 640, you will need to apply for a bad credit auto loan.

Our job

Once you’ve checked your credit report and credit scores and you’ve determined that you will probably need a bad credit auto loan, the next step is to find a dealer that offers them, since not all do. The best place to do that? We’re glad you asked.

At Auto Credit Express, we specialize in placing customers with bad credit with dealers that can help them. These affiliate dealers are knowledgeable and work with a broad spectrum of lenders to ensure the best chance at getting approved for a car loan.

So if you are serious about getting your credit back on track, you can begin the process right now by filling out our online bad credit car loan application now.

“A few points difference in your credit score can have thousands of dollars’ impact over 30 years of a mortgage,” said Mike Wickham, retail branch manager of Starion Financial in southwest Fargo.

Through the end of February, Starion branches are offering free credit reviews, including a free credit report and score, to anyone who makes an appointment. Wickham said the goal is to explain to people why their scores are high or low.

“We feel it’s important we educate people ahead of time on how their score can impact them,” Wickham said.

Where is my score?

There are many different types of credit scores, but the ones most often considered by lenders are FICO scores, developed by the Fair Isaac Corp.

FICO scores are provided to lenders by the three major credit reporting agencies: Equifax, Experian and Transunion. Each may report a different score, though won’t vary too much, Wickham said.

Anyone can get one free credit report yearly from each of the three credit reporting bureaus at www.annualcreditreport.com, but the credit score isn’t included for free on those reports.

Since 2003, lenders have been required to disclose to applicants scores used to judge them, and two new laws that kick in this year will give more people free access to their scores, according to a Feb. 9 article by MSN Money’s Liz Weston.

What’s in a score?

Credit scores are based on five factors, according to a booklet from Fair Isaac:
* Payment history (35 percent of the score).
* Amounts owed (30 percent of the score).
* Length of credit history (15 percent of the score).
* New credit (10 percent of the score).
* Types of credit in use, such as revolving (credit cards) and installment (mortgage and car loans) accounts (10 percent of the score).

FICO scores range from 300 to 850. The lower a person’s score, the riskier they appear to a lender or other credit granter, said Jesse Jurgenson, a financial counselor at The Village Family Service Center in Fargo, which offers credit reviews for a fee.

“The best way to predict if somebody will pay their bills in the future is how they’ve paid their bills in the past,” he said.

Jurgenson said there are several criticisms of the scoring system. It can be inaccurate, if the credit bureaus have wrong information. It also looks at a seven-year time frame, meaning mistakes from your early 20s can still haunt you at 30. It doesn’t consider personal circumstances, such as a medical crisis.

“The system’s not perfect, but you have to rank people somehow,” Jurgenson said.

Credit scores don’t consider factors like age, race, religion or education.

What’s a good score?

Wickham says around 700 is the dividing line between a good and bad score.
Jurgenson said anything above 680 used to be considered a good score, but as lenders have less money to loan, it’s upped the necessary credit score to low 700s.
Someone with a score under 500 will have trouble getting credit approval, Jurgenson said.
Improving a score takes time, Wickham and Jurgenson said. That’s why applicants should check their scores six to 12 months before seeking a big loan.
By looking at their credit report, applicants can dispute any mistakes and detect possible identity theft.
Credit reports also provide clues on why a score may be low – such as missed payments or overextended credit – and what can be done to raise it.
The most basic advice is to use credit responsibly. Jurgenson often tells college students to use one credit card to buy gasoline and then pay off the card on time each month.
“You need to use credit to build credit,” he said. “In some ways it’s better to have bad credit than no credit.”

Tips for a good FICO score

* Do pay your bills on time? If you have missed payments, get current and stay current.
* Don’t use a high percentage of your available credit.
* Don’t open several credit cards in a short period of time. Apply for and open new credit accounts only as needed.
* Don’t close unused credit cards. Owing the same amount but having fewer open accounts may lower your score.
* Do pay off debt rather than moving it around.

Source: my FICO

Margaret Mikitka is the face of the American homeowner boondoggled by the housing crisis. She lost her job, and then, she lost all faith in the system. Mikitka describes the disheartening conversation she had with a ban representative.

“I don’t understand. I thought the loan modification was to help lower the payment so we can stay in our home. They said not necessarily. In your case, your benefit was we lowered your interest rate but we increased your monthly payment.” Mikitka continues, “So we had no choice, but to give up our home, and that was the hardest thing I ever had to do!”

Realtor Tony Galarza says, “You’re looking at 18 to 24 months for a homeowner to rebuild his or her credit. So the fact that Experian is opening up this opportunity…is great!”

After Margaret short-sold her family’s home, Galarza helped Margaret find a rental just a few blocks away. She walked us to that home where another family now lives, as she laid out her plan: to pocket the 600 bucks a month they’re now saving, and rebuild their credit so they can own a home again.

News that the Experian Credit Agency is the first to count rental histories when calculating one’s credit score, is the first solid bit of hope she’s had in awhile. Mikitka says, “All I want is help!”

Mortgage broker Chris Brown says this news about Experian means she may finally get some help. Brown says, “To see private industry step up with creative ways to help displaced homeowners get back in their own home, is huge! I can only hope other credit bureaus will follow.”

Mikitka says, “My son was really heartbroken, but I told him, we’re going to get another home; so he doesn’t have to worry.”

Right now, Experian is only referencing rental histories through a credit bureau that collects data from a property management network, so most of the larger rental properties. The hope is eventually, landlords can form a sort of alliance so they too can be counted.

Source: myfoxorlando.com

The good news is that there are things consumers with less than stellar credit can do to improve their standing among lenders and to rebuild their credit score. In this article, we will look at techniques you can use to improve your stats.

Credit Score? What’s That?

A credit score is the key to understanding how creditworthiness is evaluated by lending institutions, as a good credit score can unlock the vault to help obtain financing.

Your payment history, loans outstanding and a general indebtedness are statistically evaluated by the credit bureaus. The big three of the industry are: Equifax, TransUnion and Experian. Based upon a compilation of that data, your profile is assigned a number between 300 and 850, with 300 being the least credit worthy and 850 being the most credit worthy.

It is this number that lending institutions use as a basis for determining whether you qualify for a mortgage or a quick escort out the lobby doors. So, now that you understand how the score works, let’s look at five tips that will help you raise a bad score and win favor with those stern-faced bankers. (For a detailed breakdown of this calculation, see How Is My Credit Score Calculated?)

Tip No.1 – Pay More Than the Minimum

If possible, always make payments over and above the minimum interest payment that is due. Credit bureaus not only look at the amount of debt an individual has outstanding, but also the length of time it takes to pay off the debt.

Unfortunately, there’s no calculation that can be used to measure exactly how much this will boost your score. There are a myriad of factors that go into computing a credit score, but accelerating payments and satisfying debts on a timely basis is recommended as a means of repairing credit by lending institutions and well-known credit counseling agencies such Credit Guard of America.

Tip No.2 – Work Out a Plan

Most people don’t realize that if they are behind on their debt payments and are going through some trying times, their lenders will often consider negotiating a revised payment plan or possibly forgiving a portion of the debt. For lenders, negotiating is cheaper than either hiring a collection agency or risking that the individual might have their debts cleared in a bankruptcy proceeding.

If you need a reprieve, approach the lender and ask for more time to make payments. You can also present a revised payment structure. If you can develop a plan that works for you and makes sense for the lender, there is a good chance they will accept it. If and when a deal is struck to forgive a portion of your debt, be sure that the major credit bureaus are aware of it and that they make the appropriate notations on your credit report. Less debt and timely payments equal a higher credit score.

You can check to see if the appropriate notations have been made by accessing your credit report, which will document your borrowing and any material changes made to these reports. You are entitled to one free report every 12 months. For more information on getting your free report see the Federal Trade Commission Website.

Tip No.3 – Switch from Credit to Debit Cards

Credit card debt is no friend to your credit score. One of the best ways to avoid credit card debt is to pay the debt right away, through the use of a debit card. (To learn why cards and your credit report have a stormy relationship, see How Credit Cards Affect Your Credit Rating.)

Debit is different from credit. With a debit card, you deposit money into an account and then use the card to charge against the money. There is no credit bill to rack up, and you can only spend what you actually have.

It is important to note that credit reports don’t typically factor debit card payments into the credit score equation. But by disciplining yourself and using a debit card to settle debts on the spot, (rather than racking up huge credit card balances) you will, by extension, have a better credit score. (For more on the pros and cons of debit, read Credit, Debit And Charge: Sizing Up The Cards In Your Wallet.)

Tip No.4 – Cut Up Those Store Cards

Many people are just one more card away from witnessing the tragic death of their wallets. The leather strains and stretches to hold in all that easy credit. It’s hard not to have an overstuffed wallet when every retailer you visit now has an in-house credit card they’d be ever-so-happy to sign you up for. While these cards often give bonus points, free merchandise or favorable rates, the bad news is that the more open accounts you have, the lower your credit score will be.

From a credit bureau’s perspective, the logic behind this is that you could theoretically tap all of these credit sources to the max at one time and rack up a huge amount of debt. In other words, credit agencies and lenders are worried about your potential for taking on high interest debt, as well as the likelihood that you probably maintain small balances on each of those cards. If they don’t have an outstanding balance the easiest solution is to simply call and cancel the cards.

If you have balances on numerous cards right now, one excellent solution is consolidating your debt. A personal loan at 12% is still better than the 20%+ rates some cards charge. However, if consolidation doesn’t sound attractive, consider paying off the debt that has the highest interest rate first, and close out your accounts one by one as you pay them down. (For advice on debt consolidation, check out Digging Out Of Personal Debt.)

The goal should be to reduce your card count to one or two credit cards. It will make reviewing monthly statements and paying your bills much easier. It will provide discipline as your overall credit limit will be lower, and finally it will keep your wallet from exploding in your pocket, which can be very messy.

Tip No.5 – Add Comments to Your Credit Report

Often when you peruse your credit report you’ll find an error. Perhaps you’ve paid off a particular loan that isn’t reflected on the report, or there are legitimate reasons why a particular debt hasn’t been satisfied, such as a temporary disability. In these instances your first recourse should be to contact the credit agency and request they make the appropriate changes. Fibbers beware: you will probably have to provide some documentation.

Few people realize this, but credit reports typically have a space for you to provide your comments at the bottom. This section is another area of recourse that can be used. It lets you comment on why a particular debt hasn’t been paid or to point out any factual errors. To do this, the individual must contact the credit bureau directly and again may have to provide some documentation to support the claims.

To be clear, adding comments to the credit report won’t necessarily boost your credit score. However, some lenders may take your comments into account when deciding whether to grant you a loan. This little-known space can be invaluable if you are fighting an incorrect rating.

Bottom Line
A low credit score is not the end of your financial world. Discipline and responsibility can help rebuild even the lowliest of scores. Paying more than the minimum, reducing the number of cards in you wallet, negotiating a payment plan and taking advantage of the comments section on your credit report can all help boost your score and improve your odds of success the next time you need a loan.

Source: investopedia.com