NationalCreditReport.com, a leader in credit report, credit score and credit monitoring services, reminds consumers that there are many things that might seem like a good idea when working to get a good credit score, but consumers should do their research before taking any steps that might cause credit report damage.

“There are some common mistakes that people make when they are working to repair or raise their credit scores,” said Samuel S. Ambrose, Vice President of Marketing and Operations of NationalCreditReport.com. “Things that seem harmless like closing credit card accounts can actually lower your score with the 3 major credit bureaus and affect lending decisions by the financial institutions that obtain your credit report for review.”

The 3 major credit bureaus (Experian™, Equifax™, and TransUnion™) collect information such as bill payment trends, outstanding debt and number of open accounts and use that information to calculate your credit score.

“This seemingly smart move could really cause credit report damage,” said Ambrose.

According to Ambrose, many people attempting to clean up their credit report close longer-standing credit card accounts that they no longer use. Since the 3 major credit bureaus give you points for the length of your credit history, closing a long-standing card could actually hurt you. A better move is to keep that card and use it sparingly to keep it active. Attempt to pay it off in full each month.

Charging too much on one credit card can also make it harder for you to get a good credit score because you’re using a larger portion of the credit granted to you. You don’t want to come close to your limits on your cards. Spread your charges among a few different cards to avoid credit report damage. Set up automatic bill pay if you think you might have trouble remembering to make payments on time.

Another mistake that can cause credit report damage is applying for more credit than you really need. Having many inquiries by creditors can cause your credit score to drop slightly.

Finally, it is not just negative information that can hurt your credit score. Many people make the mistake of not having any or enough credit history. In order to be viewed as a good credit risk by potential lenders, you have to have some proof that you are good at paying your debt on time.

At the company’s website, www.nationalcreditreport.com, consumers can sign-up for a free credit score and a free, seven-day trial of its Triple Safeguard Credit Monitoring™ service. The company also offers consumers the opportunity to purchase their credit report and score for one low price with “no strings attached.” Interested customers can visit www.nationalcreditreport.com/nostringsoffer to buy their credit report and score without being enrolled in a credit monitoring service.

About NationalCreditReport.com
Since 2004, NationalCreditReport.com has specialized in providing credit information and credit monitoring services to consumers to help them understand their credit report and score. NationalCreditReport.com encourages consumers to check their credit report on a regular basis.

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Q: I have 8 credit cards and have decided to pay them in full to keep them all with zero balances. Want to boost my credit score. I am currently at 652 with TransUnion. I am going with cash only. Do you think, some credit cards can be closed due to inactivity?

A: Depends on a bank a given credit card is from, your overall credit picture and who knows what else. I normally rest my credit cards around 6, may be 7 months. I have not yet had a credit card closed due to inactivity. My wife had Chase cut the credit limit on her business Visa from $18,000 to $6,900 after about a year of total inactivity. Then of course, many other issuers stepped in with their offers, so she is not complaining. I know for a fact that Target Visa gets often closed or credit limit is decreased if kept inactive for 4 to 6 months.

Capital One actually has repeatedly sent us rather nice offers with 0% percent transfer rate for 12 months and only 3% transfer fee, which is more than decent by today transfer offers, with almost everyone else asking at least 4%. Each of us has Capital One credit card that has been inactive for at least 7 months. I started using mine, because I have a feeling that after a few nice offers, the card can be closed or credit limit trimmed severely due to inactivity. I want to keep my $20,000 line of credit in tact, who knows what can happen.

Although there are several scoring methods, most lenders use the FICO method from Fair Isaac Corporation. Each of t­he three major credit bureaus (Experian, Equifax and TransUnion) worked with Fair Isaac in the early 1980s to come up with the scoring method.

A credit score is determined much like a grade in school. Consider how a teacher calculates grades by taking scores from tests, homework, attendance and anything else they want to use, weighing each one according to importance to come up with a final, single-number score. It’s the same for a credit score. But instead of using the scores from pop quizzes and papers, it uses the information in your credit report.

Your credit score is calculated by weighing information in your credit report.

The number ranges from 300 to 850. Although the exact formula for calculating the score is proprietary information and owned by Fair Isaac, here’s an approximate breakdown of how it is determined:

* 35 percent of the score is based on your payment history. This makes sense since one of the primary reasons a lender wants to see the score is to find out if (and how promptly) you pay your bills. The score is affected by how many bills have been paid late, how many were sent out for collection and any bankruptcies. When these things happened also comes into play. The more recent, the worse it will be for your overall score.
* 30 percent of the score is based on outstanding debt. How much do you owe on car or home loans? How many credit cards do you have that are at their credit limits? The more cards you have at their limits, the lower your score will be. The rule of thumb is to keep your card balances at 25 percent or less of their limits.
* 15 percent of the score is based on the length of time you’ve had credit. The longer you’ve had established credit, the better it is for your overall credit score. Why? Because more information about your past payment history gives a more accurate prediction of your future actions.
* 10 percent of the score is based on new credit. Opening new credit accounts will negatively affect your score for a short time. This category also penalizes hard inquiries on your credit in the past year. Hard inquiries are those you’ve given lenders permission for, as opposed to soft inquiries, which include looking at your own score and have no effect on the score. However, the score interprets several hard inquiries within a short amount of time as one to account for the way people shop around for the best deals on a loan.
* 10 percent of the score is based on the types of credit you currently have. It will help your score to show that you have had experience with several different kinds of credit accounts, such as revolving credit accounts and installment loans.

This information is compared to the credit performance of other consumers with similar histories and profiles. The three major credit bureaus each have their own version of the credit score, all of which are based on the original Fair Isaac scoring method. Equifax has the BEACON system, TransUnion has the classic FICO Risk Score system, and Experian has the Experian/Fair Isaac RISK system. Some lenders also have their own scoring methods, which may include information such as your income or how long you’ve been at the same job.

When it’s all said and done, just how important is this magic number? And what does it mean for your interest rates?

You probably wouldn’t be satisfied to see only 1/3 of a medical report about your health – or even to see 1/3 of an inspection report on your car. So why should you be content to see only 1/3 of your credit history? Single bureau credit reports paint only 1/3 of a consumer’s credit history picture. To get the most complete view of your credit, a 3-in-1 credit report is your best bet.

Credit bureaus: The Big Three
There are three major national credit bureaus that compete with each other to cover consumer credit information: Equifax, Experian and TransUnion. These credit bureaus compile and distribute the following consumer credit information:

* Account balances
* Payment habits
* Credit history
* Length of employment
* Previous employers
* Personal information
* Current and previous addresses
* Bankruptcies
* And more…

The three credit bureaus are independent of each other and do not share information. Therefore, the personal financial information contained in one of your credit bureau files may not appear in another. A potential lender can pull credit information from any one of the three credit bureaus. Many national banks and lending institutions report credit information to all three credit bureaus, but other credit grantors and smaller banks may report to only one or even none. Therefore, a single credit report could be missing some of your important financial information.

On the other hand, a 3-in-1 credit report provides your complete credit history as reported by all three credit bureaus: Equifax, Experian and TransUnion. In a 3-in-1 credit report, you can view a list of all your credit accounts line-by-line, bureau-by-bureau, allowing you to see how each of the individual national credit reports are reporting your accounts, as well as which credit grantors have recently reviewed the credit report. Obtaining a 3-in-1 credit report leaves nothing to the imagination—you see all the accounts and financial history a potential lender will see.

3-in-1 credit report: Safety in numbers
According to a study done by U.S. PIRG, up to 70 percent of credit reports contain errors of some kind. By getting a 3-in-1 credit report, you can review all your financial information for potential errors and inconsistencies, ensuring that no incorrect information goes unnoticed. And false information on a credit report can be one of the first signs of ID theft, so the sooner you catch an error with a 3-in-1 credit report, the faster it can be corrected.

A credit report is most effective when it provides a complete review of your credit history and presents all details of your credit exactly how potential lenders will see it, with nothing omitted. A 3-in-1 credit report gives you the peace of mind of knowing that you have seen every single piece of your financial history. With a 3-in-1 credit report, you can view everything potential lenders can see, and you can review your credit report for any false financial information and stop a potential identity thief in his or her tracks.

Stop wondering where your credit history stands. Click here to get your complete 3-in-1 credit report now!

A new credit scoring system that rivals the traditional FICO score is now available to consumers.

For $5.95, Internet users now are able to check their VantageScores online through Experian, one of three U.S. credit-reporting bureaus that jointly developed the system. The site also includes a simulation showing how potential actions, such as closing a credit-card account or making a late payment, could affect a person’s score.

Unlike FICO, which is solely a numerical score, a VantageScore consists of both a number and the letter grade A, B, C, D or F. While the two scoring systems may look different, the behaviors leading to high or low scores are similar.

“The same traditional truths hold,” said Stan Oliai, vice president of consulting and analytics for Experian. “It’s good to have credit, but not too much. It’s good to use credit, but not too much.”

VantageScore was introduced in March by credit-reporting agencies Experian, Equifax and TransUnion, which touted it as a simpler scoring method because it uses a single formula to evaluate consumers’ debt risk profile. Under FICO, each credit bureau uses a different method for calculating credit risk.

Neither the credit bureaus nor Fair Isaac Corp., which markets FICO, make public the exact formulas they use, although they do disclose the main components. People who score high on FICO, credit bureaus representatives say, should also fare well using VantageScore.

Oliai also claims that VantageScore does a superior job of evaluating the credit of so-called “thin files,” or consumers with short credit histories. The system segments people in a particular category, such as individuals with a short credit history or a bankruptcy filing, into high- and low-risk groupings. Such information is particularly sought after for subprime lenders, who lend to people with tarnished credit records at above-market interest rates.

Consumer confusion ahead
Consumer advocates say credit seekers could be at some disadvantage if VantageScore gains acceptance. The advent of competing credit scoring systems, they say, could make the already confusing task of understanding one’s credit score even more bewildering.

“Until now, if you were given a 720, you knew that was a good score,” said Gail Hillebrand, an attorney at Consumers Union. “Now, in evaluating your score, you need to know what the grading range is, and that’s a new question consumers didn’t have to ask before.”

Under VantageScore, credit scores range from a low of 501 to a high of 990. Each 100-point interval corresponds to a letter grade, in ascending order. A score of 501 to 600, for example, would translate into a grade of “F”, while someone with a score greater than 900 would receive an “A.” More than two-thirds of all consumers qualify for a grade of “C” or higher. FICO scores, by contrast, range from 300 to 850, with 85 percent of Americans coming in at higher than 600.

Online Credit Score

When it comes to applying for a loan, applying for a credit card and applying for certain jobs, you will see that all of these things have one thing in common. All of these actions will require you to have a good credit score in order to qualify.

A credit score or a credit rating is what banks base their decisions in approving you for the loan of for a credit card. Sometimes, there are companies that also look at your credit rating in order for you to qualify for a certain job.

Your credit report will contain all your credit history. It will show if you have been paying your loans and credit card bills on time and it will also contain information about your monetary judgments, your tax liens and even bankruptcy.
It is a fact that many people don’t know what their credit score or credit rating is. Because of this, they will often get negative credit reports because of applying frequently for credit cards and loans and getting rejected because of bad credit rating.
Because of this reason, it is important for you to know your credit rating. This is why it is necessary for you to obtain your own copy of your credit report in order to know about your credit history and know if you have a good credit rating or a bad credit rating.

You obtain a copy of your credit report through credit reporting agencies. The credit reporting agencies makes your credit report and gives you your credit score. They make their reports based on the creditor’s reports about your credit.

If you werent paying your credit card bills or your loans on time, the creditors will give you a negative credit report to credit reporting agencies. Sometimes, a bad score can be caused by errors on the report. For this reason, it is very important for you to find out about your credit history by applying for a credit report from credit reporting agencies.

The document will contain all kinds of necessary information about your credit payment history. It will contain your identifying information, such as your name, address, current and previous address, date of birth, national security number, your previous employer, and also your spouse’s name if you are married. It will also contain your credit information with banks, credit card companies, retailers and also other lenders.

The credit report can be viewed by creditors in order to determine if you are worthy of getting approved for a loan. It is also a document that can be analyzed by landlords and employers for your credibility.

Your credit report will be provided by the three major credit bureaus in the United State, namely; Equifax, Experian, and TransUnion. The reports can be ordered at the same time. Also, these reports can be obtained for free, once a year. There are also companies that provide credit reports for free. However, these companies use their own system and are usually inaccurate.

So, if you haven’t applied for a credit report before within the year, you can obtain one through the three major credit bureaus in the United States. You can even order all three credit reports for free. By doing this, you will not only know about your credit history and credit rating, but you can also compare it and know about certain errors made.