In an economic climate in which lack of stability is a commonplace investors are realizing the necessity to have an up to date status of their credit scores. Free Annual Credit Report Online continues to be a most trusted resource for fulfilling this demand by providing investors and consumers alike with an on the spot snap shot of their credit rating as furnished by the three most dependable credit bureaus on the market.

Seeing that credit is a unclear number which could vary day to day, one picture at a unitary point in time is not good enough to help clients feel comfortable on the subject of their true all round credit score. Mike Jacobs, who has owned his own company since the early 1990′s, comments: For me, taking loans on my business is as important as generating sales. Before I go into a negotiation with loan companies I usually want to realize where I stand on my credit. With free annual credit reports I could keep up with precisely what exactly is occurring with my credit and work out the essential improvements as required. This system is fast, simple, and moreover it’s free to get started.

Customers cover anything from entrepreneurs, business owners small and large and regular residents performing everyday purchases. They all have contributed to the progress and popularity of this service. They have all accepted the significance of having ready access to their credit reports and consider it a worthwhile investment.

The use of this service is expected to grow significantly in the next year and as demand increases the cost of obtaining a service such as this may also rise. Several experts are guiding customers to obtain this kind of service while it is still affordable.

Source: benzinga.com

The scores can be taken from a credit report collected by one of the three credit bureaus: Eperian, Equifax and TransUnion. Lenders use credit scores in quickly measuring the paying capacity of a loan applicant. the higher the credit score, the better the paying capacity or less risk of default and the more likely that a potential borrower will get the best deal. The FICO score – developed by fair Isaac, is the most common used by the lenders. Your FICO scores which are derived from your credit reports are used by lenders as a measurement showing how much outstanding debt you owe and how much credit you have available to you. Having too much of both may not be a good indicator, leading to a denial of a new loan application.

Scrutinize your credit reports. report any inaccuracy or error for the bureaus to investigate and correct them. Some items may lower down your credit rating such as unused open lines of credit or account that you thought had been long ago. Each of the three bureaus may gather different credit history information which is why your credit score may vary. That’s why it is recommended to get reports from the three. If you have been denied of employment, credit or housing loan application within the past 60 days, you may obtain a free credit report from all the three credit bureaus.

Credit reports can be obtained free from Annual Credit report (which is the only authorized source according to the FTC), while you FICO score can be taken from MyFICO.com.

However, those borrowers with weak credit scores always had the FHA. This government agency insures mortgage loans. Working through a traditional mortgage loan officer, borrowers could qualify for FHA mortgage loans even if their credit scores were low. That remains the case in part today, but even the FHA has boosted its credit requirements. Today, borrowers must have a FICO credit score of at least 580 to qualify for an FHA loan that comes with a required down payment of 3-and-a-half percent of a home’s final sales price. That down payment figure, by the way, is a good one: Most traditional lenders today require borrowers to come up with a down payment of 20 percent of a home’s final sales price. For a $200,000 home, that comes out to a down payment of $40,000 – not an easy sum for most homebuyers to come up with.

Those borrowers who have credit scores from 500 to 579 will still be able to take out FHA mortgage loans, but they’ll have to come up with a down payment of 10 percent. That’s still an improvement over what they’d have to come up with for most conventional mortgage loans, but 10 percent is a lot more burdensome than 3-and-a-half percent. And those borrowers whose credit scores are lower than 500? They don’t qualify for FHA mortgage loans at all.

These requirements, though, are hardly excessive. Borrowers with credit scores under 580 have made some serious financial mistakes in their past to earn such low scores. They’ve undoubtedly missed payments, paid other bills late, or suffered such financial disasters as Chapter 7 or Chapter 13 bankruptcy filings. These borrowers aren’t ready to own homes. They need to work first on their financial health before adding the huge burden of a monthly mortgage payment. Homeowners who take the steps necessary to boost their credit scores – pay all their bills on time and reduce their credit card debt – will be far better prepared to make the move to owning a home.

For instance, many people think that if they pay their bills on time, their credit score must be good. Right? Wrong, say our experts. Even if you always pay on time, if your cards are close to being maxed out, your score isn’t going to be as high as it could be, since borrowing up to the hilt looks like a risk factor to the credit bureaus. Surprised? Read on to find out five more credit secrets that can help you get the credit score you deserve.

1. Pay off revolving debt first. There are two different kinds of debt most of us carry: installment debts, which are generally secured by collateral (such as a car loan), and revolving debt, such as credit card balances. Since credit card balances are unsecured — the company can’t repossess the spoils of your last shopping spree if you don’t pay up — they’re viewed as much riskier in the FICO equation. As a result, paying off revolving debt boosts your credit score more than paying off a comparable amount of installment debt. “Paying off installment debt has such a small impact on your score,” says Ulzheimer. “Last year, I paid off a $284,000 mortgage and my score went up four points.” In other words, put that overtime check, bonus or tax refund toward credit card bills if you want the most bang for your high-score buck.

2. Payments to collection agencies don’t boost your score. By the time a debt goes to a third-party collection firm, the original lender (your credit card company, for instance) has already written off the loan as a loss and noted that delinquency on your report. While there are a host of good reasons — such as not getting sued and not being pestered with phone calls at all hours — to pay the bill once a third party collector has it, those payments won’t count toward your FICO score and won’t erase the notation of delinquency.

Likewise, if you get dinged with an insufficient funds fee at your bank and “retaliate” by closing the account or not putting any more money into it, you can get slapped with a collection action by your bank that will negatively impact your score. “In addition to bank account debt, such collection accounts can also arise from utility bills, parking tickets, and even library fines – and can often impact your score as much as unpaid credit card or loan debt,” Paperno warns. Bottom line: Pay those bills before they’re sent to a collection agency if you want to preserve your score.

3. Accentuate the positive. While you obviously want to make sure that black marks like missed payments don’t stay on your report any longer than necessary, it’s perfectly okay and even desirable to have old accounts that were in good standing still listed. For instance, say you paid off a car loan and never made a late payment on it. While you could lobby the bureaus to take that information off your report, it’s more beneficial to leave it on, says Ulzheimer. “This is a great example of when less is more. Don’t ask them to take it off if it’s in good standing.”

4. Opening and closing accounts can lower your score. “FICO’s research has found that opening a new account is predictive of increased risk, and opening any type of credit account or loan action can lower one’s score,” explains Paperno. The good news, he adds, is that your score will rise back to its original level within a few months if you keep the balance low and make your payments on time.

Closing cards can ding you because it skews your credit utilization ratio — that is, how much of your available credit you’ve used — when that line of credit suddenly vanishes. For this reason, experts say to use all your cards at least occasionally. An unused card does you no good if the issuer cancels it due to inactivity.

5. Borrowing more to pay down your debt is dicey. Despite the fact that Americans are often pitched offers of “consolidation” loans by their bank or mortgage lender, taking on more debt to eliminate your credit card bills is a risky proposition. “You’re borrowing from Peter to pay Paul,” says Ulzheimer. Since most consolidation loans are home equity loans backed by your house, failure to get a handle on your spending and pay off your debts as intended could have catastrophic consequences, he points out. “If you miss these payments, the down side is much more significant.” There’s also the fact, as we pointed out above, that opening new accounts can at least temporarily lower your score.

However, taking out an installment loan to pay off your credit card bills could prove beneficial — with one significant caveat. As Paperno points out, installment debt doesn’t drag down your score the way a bunch of maxed out credit cards can, so if — and this is the big “if” — you have the discipline to pay off your cards with that new loan money and stop using the cards until the installment loan is paid off, you could raise your score. But as Paperno points out, it takes a super-sized helping of discipline in order to make this tactic successful.

Source: walletpop.com

The Fair Credit and Reporting Act (FCRA) requires each of the 3 credit reporting agencies to provide everyone ONE free credit report every 12 months. As stated by the Federal Trade Commission, the only website you can go to access this free credit report is at annualcreditreport.com. This is absolutely the only site that is part of this program. But there is one drawback, this site only provides you a credit report/history, and not your credit score. You have to pay extra for the score.

Don’t fret, there are some other ways to get to get a free credit report and score. Many of the websites that offer credit reports have 30 day free trials. For instance, about a year ago I used freecreditreport.com, part of Experian. I ordered my credit report and score, checked it online, took notes, then called in a canceled within 4 hours of ordering the service. I was never charged a thing. Also, at one point, and I believe they still are now, American Express was offering a 30 day free trial to its card holders to receive credit reports and scores. Just login into your americanexpress.com account, and under other services sign up for the credit report/score program. Assuming you cancel the program within 30 days you will not have to pay a dime, and you will get your credit report and score from all 3 bureaus.

Another way you can sometimes get a free credit score is from your bank. Many banks use their own version of your credit score, some call it a soft score, meaning it is their own proprietary formula/score. I do know Bank of America uses this and it is factored into credit card application and mortgages with them. If you are nice to one of the branch employees, they will often share with you your soft score. While this is not your actual credit score, it will give you a very good idea of what your score is.

Also, if you meet one of these requirements you are eligable for a free credit report.

1) Denied credit, insurance, or a job due to information on your credit report. A notice stating which credit bureau supplied the report should be included in your letter of denial. You then have 60 days to request a free copy of your report from them.
2) Unemployed. You are entitled to one free report a year if you are unemployed and anticipate looking for a job within 60 days.
3) On welfare
4) Believe you are a victim of identity theft. Maybe you recently found a suspicious transaction, or lost your wallet. Place a fraud alert on your file and then ask for a free copy of your credit report.

Q: How long do bankruptcies stay on credit reports?
A: Declaring bankruptcy makes a long lasting impact on credit reports. When a Chapter 7 bankruptcy is filed, most, if not all, debts are voided. This type of bankruptcy can stay on your report for up to 10 years. However, Chapter 13 bankruptcy, in which the debtor must repay some or all of the debt through a court-approved payment plan, remains on your credit report for 7 years.

Q: Can an employer get a copy of your credit report without your permission?
A: The Fair Credit Reporting Act (FCRA) restricts access to your credit file for your privacy. A prospective employer can only get a copy of your credit report if you give your permission.

This seems like a logical thing to do, right? I mean, lower interest rates on your credit accounts equals more money in your pocket, true? Yes, transferring your credit card balance from a high interest credit account to a lower one is an excellent way to save money on interest, especially if you carry a lot of debt on your credit card(s).

But how does this affect your credit rating and credit score? The answer to that question really depends on your situation, and how you go about it.

A closer look

Lets say you have $5,000 in debt on a credit card account from “ABC Credit Services”, which has a total credit line of $10,000. For this example, lets just say this is currently your only open credit card account. Since your debt takes up half of your total credit line, this would put your percentage of debt compared to your credit line, for this account, at 50%. We’ll call this your “debt percentage”.

You’re making payments to ABC with no problems and you seem happy with the account and the interest rate. That is, until one day you check your mail, and there it is, a credit card offer from “XYZ Credit Services” with a fixed interest rate set at half of what you’re paying now with ABC! Suddenly dollar signs start popping up in your head, and you start trying to figure out how much money you could save by transferring your $5,000 balance to XYZ. You then decide you’re going to apply for the account at XYZ. Your credit is good right? No problem! You receive the card in a week or so, and go ahead with the balance transfer.
So how does this affect my credit score?

How this balance transfer affects your credit rating and credit score really depends on what you do from this point on, and also what your credit line is on your new card from “XYZ”. If your credit line on your new card is lower than that of the original “ABC” credit account, then your “debt percentage” will be higher, which generally will lower your credit score. This would be true if you closed the original account at ABC, and kept your new account as your only open credit card account.

If you’ve had your “ABC” credit card for a while (maybe 2 years or more), and you have a good payment history with them, then it will most likely be in your best interest to keep that account open, even if you don’t use it. Especially if your credit line with your new lower interest card is below $10,000. Usually for the sake of your credit score, you don’t want to increase your “debt percentage”, you want to decrease it.

For example, if you keep both accounts open, you will have a total credit line of $20,000. With your $5,000 in debt on your new card, and your original account at ABC having no balance, your debt percentage would only be 25%, which is a good percentage and your credit score will reflect that.

Now reverse that and say that you closed your credit account from “ABC”, given that your credit line at “XYZ” stays the same, you would have a debt percentage of 50%, which is what you started out with in the beginning. Add to that a newly acquired credit card with little or no payment history on it, and you’re credit score would almost surely decrease, at least until you establish a longer payment history on your new account.

So for this example, it would probably be best to keep both accounts open. Your lower debt percentage could possibly offset the hit your score took from obtaining your new credit card. And looking to the future, it should look better on your credit report this way too.

Avoid increasing your debt percentage

When trying to keep your credit score as high as possible, try to avoid doing anything to increase your debt percentage. Even though the amount of debt you are carrying on your “revolving credit” is the same, it will always look better if you’re using 25% of your total credit, compared to using up 50% of it.
But don’t try too hard to decrease it either

Be sure not to take it too far by applying for more credit than you need, just because you think it will help your credit score by having an even lower debt percentage. Obtaining any new credit will generally bring down your credit score slightly, at least for a short period of time. Applying for credit too much and too often will almost always have a negative impact on your credit score, which is exactly what you don’t want. Your time would be better spent on trying to pay down this debt instead.
As with anything, being informed is the key

Balance transfers such as this can and will save you money on interest, if you do it right. Stay informed about how things like this affect your credit, and you should be just fine!