IDENTITY GUARD® TOTAL PROTECTION℠ is the best credit monitoring service and an outstanding credit protection company. They do a fantastic job identifying if your information is being sold illegally over the Internet or changed fraudulently in databases. There are three products included in the IDENTITY GUARD TOTAL PROTECTION service: credit account protection, Web monitoring and security software.
IDENTITY GUARD’s credit account protection is more than comprehensive. Instead of simply placing a fraud alerts on your credit file, IDENTITY GUARD tries to stop unauthorized use of your personal information before it occurs. This service includes a search for applications of credit in your name, such as credit cards or loans, as well as a search for applications for other accounts, like cell phone registrations. This application search takes place every business day. In addition, the service monitors your credit report to notify you of certain changes to your file.
If changes are made to one or more of your credit accounts at any of the three credit bureaus, IDENTITY GUARD will send you an email within 24 hours of the change so that you can quickly block and/or close the accounts and report the matter to the authorities. In our opinion daily three bureau credit monitoring is a must have for any monitoring service. By utilizing MOBILE LOCKBOX® (see below), you can choose to be alerted of any changes via text message. There is also a simulator for those looking to improve their credit score that allows them to see how different scenarios affect their credit score.
With its Web monitoring service, IDENTITY GUARD will scour the Internet far and wide to see if your information is being released or shared by identity thieves. This is possible because the service scans the online markets and channels used most often for the illegal trading and distribution of personal information.
The company will also check public records databases for inaccurate information regarding your accounts, which may occur because a thief has compromised your information or may simply be errors, but either way, you can correct them in a timely fashion. In other words, you will be alerted to changes to your sensitive information to help you stop identity thieves before they start opening accounts.
IDENTITY GUARD’s security software is known as ZoneAlarm. It was created to target identity thieves who try to install software on your computer through websites or emails or who con you into sending them your personal information through spoofed web pages. It has the capability to block viruses, spyware and fraudulent emails to protect you from phishing attacks, hackers and malicious spam. The software is updated regularly as new viruses and phishing attacks are created. ZoneAlarm is just as effective as McAfee and Norton internet security suites so you are in effect saving $50 per year by not having to purchase those products and it doesn’t hog all your system resources like Norton does. In other words your computer will run faster.
In addition to the above services, IDENTITY GUARD TOTAL PROTECTION offers two more services to give you more convenience and peace of mind: PRIVACYPROTECT® and MOBILE LOCKBOX.
PRIVACYPROTECT is another Web security product that can protect your personal information. Some of the more high-tech identity thieves can steal your personal information by remotely installing software on your machine that records your keystrokes as you type in personal information. You may already have this spyware on your machine without even knowing it. Once your machine is protected with PRIVACYPROTECT software, your keystrokes will be encrypted. So even if he is recording your keystrokes, all the spy will see – and be able to copy – is gobbledygook.
MOBILE LOCKBOX is a program that can help you safely store user names and passwords. Since the most secure passwords and user names can be complicated and difficult to remember, this service gives you a trusted place to keep them without writing them down while still allowing you to access them at your fingertips. All you need is a cell phone, PDA or computer to “lock up” your account numbers, passwords, files, records and other sensitive information. Plus, with all of this information in one place, it’s easy to cancel all of your accounts if you find that they have been compromised or if your wallet or purse is lost or stolen. Just give IDENTITY GUARD a call and it is taken care of all at one time.
IDENTITY GUARD’s Identity Theft Assistance Center will assist you through the entire process of recovery if you are ever victimized by this horrible crime.
Identity theft insurance* is also provided with coverage of $1,000,000 with no deductible for unauthorized fund loss, legal defense, lost wages and costs or expenses you may incur to recover your identity and restore your accounts. Some restrictions ($1000/week up to 4 weeks for lost wages for example) do apply so please see IdentityGuard.com for further details about their ID Theft Insurance.
They do promise to reimburse you for any financial loss as a result of identity theft with their simple no-nonsense disclaimer: “On the slim chance that your money is stolen by identity thieves while you are a customer, you will be reimbursed the difference between your actual loss and the amount reimbursed to you by your financial institution, up to $1 million. The major stipulations are that you: report your loss to us within 90 days; you let us help you recover your losses, you apply for reimbursement from your financial institution.”*
With its credit monitoring and comprehensive online protection, IDENTITY GUARD is the perfect weapon against 21st century thieves. With over 10 million identity theft victims per year, they are a great partner to have on your side. It’s much better to be protected than to end up in those statistics.
IDENTITY GUARD is offering their TOTAL PROTECTION service for $14.99 a month (regularly $17.99) with a 30-day no-obligation trial period. Price is locked in for subsequent years so long as you don’t cancel. Just click the link below this sentence to receive this discount and get the peace of mind you deserve.
IDENTITY GUARD TOTAL PROTECTION Discount – click here.
Intersections, IDENTITY GUARD, TOTAL PROTECTION, PRIVACYPROTECT , MOBILE LOCKBOX and ID RISK ASSESSMENT®
are federally registered trademarks of Intersections Inc.
*Reimbursement will be provided by insurance carrier. Insurance underwritten by National Union Fire Insurance Company of Pittsburgh, Pa. The description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverage and exclusions. Coverage may not be available in all jurisdictions and is subject to actual policy language.
Wednesday, June 29, 2011
TrueCredit Review
TrueCredit is a service provided by TransUnion Interactive. It is different from the credit monitoring solution offered by TransUnion in that TrueCredit monitors all three credit bureaus. This service offers a free 30-day trial, and costs $14.95 per month thereafter.
One advantage to TrueCredit is that you can request an updated copy of your Experian and Equifax credit report/score once every 30 days, and can update your TransUnion report/score once per day. When you request these reports from TrueCredit it doesn’t have a negative effect your credit score.
TrueCredit is constantly looking for new features to help consumers monitor their credit report. Recent new features include instant message updates, insurance scores, and a mortgage simulator. Insurance scores is especially interesting in that it allows you to see data used by insurance companies to determine what rate you pay.
Every time you log into your TrueCredit account you will see a “change checker.” This window provides a quick snap-shot of recent activity on your credit report. Even if you never login to the website TrueCredit will send you an email within 24 hours of any key change to your credit report.
On the negative side of things, some TrueCredit customers have reported frustration with spammy emails and affiliate ads after signing up with the credit monitoring service.
TrueCredit is dedicated to helping consumers monitor their credit, but doesn’t offer business solutions.
If you have any questions about products offered by TrueCredit you will have to rely on articles on the website. We were unable to find an email address and the “virtual agent” is exactly that, virtual. The agent is a robot named Jenny and she is easily confused, but she did give us the phone number (which can’t be found anywhere else on the site).
The only benefit we were able to find with TrueCredit that you can’t get with TransUnion is credit monitoring that tracks all three credit bureaus. Such a feature is the mark of a truly comprehensive credit monitoring solution.
For information about how to improve your credit report, look at How to Build a Better Credit Rating and TopTen Tips for Finding a Credit Counselor. If you are looking for help protecting your identity, check out our Identity Theft Protection Services Reviews.
One advantage to TrueCredit is that you can request an updated copy of your Experian and Equifax credit report/score once every 30 days, and can update your TransUnion report/score once per day. When you request these reports from TrueCredit it doesn’t have a negative effect your credit score.
TrueCredit is constantly looking for new features to help consumers monitor their credit report. Recent new features include instant message updates, insurance scores, and a mortgage simulator. Insurance scores is especially interesting in that it allows you to see data used by insurance companies to determine what rate you pay.
Every time you log into your TrueCredit account you will see a “change checker.” This window provides a quick snap-shot of recent activity on your credit report. Even if you never login to the website TrueCredit will send you an email within 24 hours of any key change to your credit report.
On the negative side of things, some TrueCredit customers have reported frustration with spammy emails and affiliate ads after signing up with the credit monitoring service.
TrueCredit is dedicated to helping consumers monitor their credit, but doesn’t offer business solutions.
If you have any questions about products offered by TrueCredit you will have to rely on articles on the website. We were unable to find an email address and the “virtual agent” is exactly that, virtual. The agent is a robot named Jenny and she is easily confused, but she did give us the phone number (which can’t be found anywhere else on the site).
The only benefit we were able to find with TrueCredit that you can’t get with TransUnion is credit monitoring that tracks all three credit bureaus. Such a feature is the mark of a truly comprehensive credit monitoring solution.
For information about how to improve your credit report, look at How to Build a Better Credit Rating and TopTen Tips for Finding a Credit Counselor. If you are looking for help protecting your identity, check out our Identity Theft Protection Services Reviews.
Credit Report.com Review
CreditReport.com claims to be one of the leading providers of credit report and scoring information for consumers. CreditReport.com has served consumers since 1998 and is a registered trademark of Mighty Net, Inc, which is not directly affiliated with any of the three major credit bureaus.
This service is a good solution if you are concerned about identity theft and don’t require additional assistance in monitoring your report for fraud. If you are not familiar with identifying potentially fraudulent items on your credit report we recommend you look at one of our top three contenders in the credit report category as they offer services that watch for such activity.
When you order a 3 credit bureau report and credit score from CreditReport.com you are automatically signed up to receive a 7 day free trial for a credit report and credit score monitoring service. This service costs $14.95 per month if is not canceled during the free trial period.
With the CreditReport.com monitoring service you will receive email alerts if there are any significant changes to your reports or score.
The 3 Bureau Credit Report service provides unlimited online access to the report for 60 days. This doesn’t mean you can generate unlimited reports, but rather you can view and print the initial report as many times as you want.
CreditReport.com also allows you to request a copy of a credit report from a single credit bureau. If you go this route you may choose which of the three bureaus your report comes from. This is not as effective as monitoring all three, but if you just want a quick snapshot it is a good option.
CreditReport.com is not an actual credit bureau which means they are not able to investigate disputes. It is recommended you contact the three credit bureaus if you discover inaccurate information on your credit report.
Identity protection, theft resolution services, and identity theft insurance are not provided by CreditReport.com.
CreditReport.com is dedicated to individual consumers and does not provide services directly to businesses. Also, they are not authorized to provide credit reports to anyone except the consumers, which means businesses can’t use CreditReport.com to request consumer credit reports.
If you have any questions or concerns about services offered by CreditReport.com, you may contact them via telephone or email. There is also a detailed frequently asked questions section available on their website.
CreditReport.com offers inexpensive credit report services to consumers and provides excellent educational material on their website, but they lack business and identity protection solutions.
For information about how to improve your credit report, look at How to Build a Better Credit Rating and TopTen Tips for Finding a Credit Counselor. If you are looking for help protecting your identity, check out our Identity Theft Protection Services Reviews.
Please Note: We did not actually request a credit report, credit score, or credit monitoring services from this company. Review is based on available information, sample reports and experiences with customer service.
This service is a good solution if you are concerned about identity theft and don’t require additional assistance in monitoring your report for fraud. If you are not familiar with identifying potentially fraudulent items on your credit report we recommend you look at one of our top three contenders in the credit report category as they offer services that watch for such activity.
When you order a 3 credit bureau report and credit score from CreditReport.com you are automatically signed up to receive a 7 day free trial for a credit report and credit score monitoring service. This service costs $14.95 per month if is not canceled during the free trial period.
With the CreditReport.com monitoring service you will receive email alerts if there are any significant changes to your reports or score.
The 3 Bureau Credit Report service provides unlimited online access to the report for 60 days. This doesn’t mean you can generate unlimited reports, but rather you can view and print the initial report as many times as you want.
CreditReport.com also allows you to request a copy of a credit report from a single credit bureau. If you go this route you may choose which of the three bureaus your report comes from. This is not as effective as monitoring all three, but if you just want a quick snapshot it is a good option.
CreditReport.com is not an actual credit bureau which means they are not able to investigate disputes. It is recommended you contact the three credit bureaus if you discover inaccurate information on your credit report.
Identity protection, theft resolution services, and identity theft insurance are not provided by CreditReport.com.
CreditReport.com is dedicated to individual consumers and does not provide services directly to businesses. Also, they are not authorized to provide credit reports to anyone except the consumers, which means businesses can’t use CreditReport.com to request consumer credit reports.
If you have any questions or concerns about services offered by CreditReport.com, you may contact them via telephone or email. There is also a detailed frequently asked questions section available on their website.
CreditReport.com offers inexpensive credit report services to consumers and provides excellent educational material on their website, but they lack business and identity protection solutions.
For information about how to improve your credit report, look at How to Build a Better Credit Rating and TopTen Tips for Finding a Credit Counselor. If you are looking for help protecting your identity, check out our Identity Theft Protection Services Reviews.
Please Note: We did not actually request a credit report, credit score, or credit monitoring services from this company. Review is based on available information, sample reports and experiences with customer service.
Credit Monitoring Services
Online credit monitoring services provide consumers with a suite of tools that help you to take proactive action in monitoring your credit report, while protecting your credit and identity information. Monitoring services notify you via email and/or wireless telephone instantly of any changes made to your credit report, which can help you identify fraudulent activity faster, and therefore minimize the negative impact it would have on your credit.
Notifications by Credit Monitoring Services
What types of activity will generate a notification or alert from the credit monitoring services? As a member of such a service, you’ll receive notification whenever your address has been changed, a new account has been opened, or when an existing account has been changed. This is extremely valuable information as you will know immediately if someone is attempting to use your good name to obtain financing. Time is of the essence when dealing with credit and identity fraud, and without credit monitoring services, it could be several months before you are aware of fraudulent activities.
Tips for Improving Credit
Most credit monitoring services also provide a host of tools that allow you to see what your credit score is at the current time, as well as steps you can take to improve it. Since credit scores are used to determine whether or not to extend individuals credit and at what interest rate; it’s important that your score be as high as possible.
Citi’s Credit Monitoring Service provides a very useful credit analyser function that allows members to determine the effects of several types of activities on their credit score. For example, if you’re considering applying for a car loan, you can use the analyser to determine how much of an impact applying will have on your score, as well as what would happen if you obtained the loan or applied and were denied the loan.
You can also use the analyser to view how missing a payment or two might effect your score overall, or determine which activities will raise your score the most and how long it will take. Extremely useful for individuals who are working diligently to improve their credit score, the Citi Credit Monitoring Service with credit analyser takes the guesswork out of improving your credit.
Identity Theft Insurance
Many credit monitoring services offer identity theft insurance programs that will reimburse members of the credit monitoring service up to a certain dollar amount if there are instances of fraud. (This service is not available to individuals living in the state of New York.) Typical expenses that are covered by identity theft insurance include:
* Lost wages for several weeks of work missed if you take time off to deal with the fraud
* Repayment of notary or certified mail costs for the delivery of affidavits.
* Long distance phone costs in conjunction with the fraud
* Attorney fees incurred for dealing with the fraud
Companies Offering Credit Monitoring Services
There are numerous companies that offer credit monitoring services. Most of the services offered are the same or similar, but a few companies having notable differences may make their services more beneficial to individuals. If you’re looking to improve your credit, you want to be sure a credit monitoring service offers an analyser, like Citi Credit Monitoring Service,creditreport.com, TrueCredit, or Identity Guard.
If you want to see results from all credit bureaus, then it’s important that you select a company that provides access to all of the major credit bureaus and not just one. Equifax offers a credit monitoring service, but only for your credit information with Equifax. Each of the credit bureaus may report slightly different information, so you may want to go with a service that can provide access to all 3 of the major credit reports.
Notifications by Credit Monitoring Services
What types of activity will generate a notification or alert from the credit monitoring services? As a member of such a service, you’ll receive notification whenever your address has been changed, a new account has been opened, or when an existing account has been changed. This is extremely valuable information as you will know immediately if someone is attempting to use your good name to obtain financing. Time is of the essence when dealing with credit and identity fraud, and without credit monitoring services, it could be several months before you are aware of fraudulent activities.
Tips for Improving Credit
Most credit monitoring services also provide a host of tools that allow you to see what your credit score is at the current time, as well as steps you can take to improve it. Since credit scores are used to determine whether or not to extend individuals credit and at what interest rate; it’s important that your score be as high as possible.
Citi’s Credit Monitoring Service provides a very useful credit analyser function that allows members to determine the effects of several types of activities on their credit score. For example, if you’re considering applying for a car loan, you can use the analyser to determine how much of an impact applying will have on your score, as well as what would happen if you obtained the loan or applied and were denied the loan.
You can also use the analyser to view how missing a payment or two might effect your score overall, or determine which activities will raise your score the most and how long it will take. Extremely useful for individuals who are working diligently to improve their credit score, the Citi Credit Monitoring Service with credit analyser takes the guesswork out of improving your credit.
Identity Theft Insurance
Many credit monitoring services offer identity theft insurance programs that will reimburse members of the credit monitoring service up to a certain dollar amount if there are instances of fraud. (This service is not available to individuals living in the state of New York.) Typical expenses that are covered by identity theft insurance include:
* Lost wages for several weeks of work missed if you take time off to deal with the fraud
* Repayment of notary or certified mail costs for the delivery of affidavits.
* Long distance phone costs in conjunction with the fraud
* Attorney fees incurred for dealing with the fraud
Companies Offering Credit Monitoring Services
There are numerous companies that offer credit monitoring services. Most of the services offered are the same or similar, but a few companies having notable differences may make their services more beneficial to individuals. If you’re looking to improve your credit, you want to be sure a credit monitoring service offers an analyser, like Citi Credit Monitoring Service,creditreport.com, TrueCredit, or Identity Guard.
If you want to see results from all credit bureaus, then it’s important that you select a company that provides access to all of the major credit bureaus and not just one. Equifax offers a credit monitoring service, but only for your credit information with Equifax. Each of the credit bureaus may report slightly different information, so you may want to go with a service that can provide access to all 3 of the major credit reports.
The Pros and Cons of a Credit Repair Service
Many people choose to utilize a credit repair service in order to help fix their credit score. While this service can be beneficial in some cases, it also has a few drawbacks that you should know about. Here are some of the pros and cons of using a credit repair service.
Pros
One of the biggest advantages of using a credit repair services that you can work with a company that knows how to repair credit. When individuals try to repair their own credit score, there is a good chance that they do not know exactly what they are doing. By contracting with a professional agency, you know that they are going to know how to repair a credit score effectively. Many times, these agencies can significantly increase your credit score within a very short period of time.
Most of these credit repair services also have working relationships with creditors. For example, if you have a lot of credit card debt, the credit repair service may be able to contact them directly and help resolve any issues that you might have with them. As an individual, you may not have the capability to do the same thing on your own.
Whenever you work with a credit repair service, they will be able to sit down with you and help you avoid getting into further credit problems. Many times, they will be able to look at your financial situation and help you come up with a budget that works for you. This way, you can start to live within your means and avoid accumulating more debt in the future.
Cons
One of the biggest disadvantages of this type of service is that you will have to pay them for their services. In some cases, you might have to pay a substantial fee in order for the company to help you out. When you are already having money problems, you might not have any extra money lying around to pay for a credit repair service.
Another problem that you might have with a credit repair service is that there is no way to ensure that they are going to be able to do their job. You might pay them a large sum of money to fix your credit and then they do not follow through with the job. There are some scam companies out there that will take advantage of unsuspecting customers in this situation. It can be very frustrating to invest money in something only to find out that it is not legitimate.
With a credit repair service, you are going to be turning your credit over to an outside agency. They are going to tell you what to do and give you steps to take in order to repair your credit. In order to successfully complete the process, you will have to do exactly as they say. If you are not type of person that likes to be told what to do, this could be a problem for you.
Pros
One of the biggest advantages of using a credit repair services that you can work with a company that knows how to repair credit. When individuals try to repair their own credit score, there is a good chance that they do not know exactly what they are doing. By contracting with a professional agency, you know that they are going to know how to repair a credit score effectively. Many times, these agencies can significantly increase your credit score within a very short period of time.
Most of these credit repair services also have working relationships with creditors. For example, if you have a lot of credit card debt, the credit repair service may be able to contact them directly and help resolve any issues that you might have with them. As an individual, you may not have the capability to do the same thing on your own.
Whenever you work with a credit repair service, they will be able to sit down with you and help you avoid getting into further credit problems. Many times, they will be able to look at your financial situation and help you come up with a budget that works for you. This way, you can start to live within your means and avoid accumulating more debt in the future.
Cons
One of the biggest disadvantages of this type of service is that you will have to pay them for their services. In some cases, you might have to pay a substantial fee in order for the company to help you out. When you are already having money problems, you might not have any extra money lying around to pay for a credit repair service.
Another problem that you might have with a credit repair service is that there is no way to ensure that they are going to be able to do their job. You might pay them a large sum of money to fix your credit and then they do not follow through with the job. There are some scam companies out there that will take advantage of unsuspecting customers in this situation. It can be very frustrating to invest money in something only to find out that it is not legitimate.
With a credit repair service, you are going to be turning your credit over to an outside agency. They are going to tell you what to do and give you steps to take in order to repair your credit. In order to successfully complete the process, you will have to do exactly as they say. If you are not type of person that likes to be told what to do, this could be a problem for you.
How Credit Repair Companies Work
Many credit repair companies offer to fix your credit report errors fast. When you take a close look at their methods, though, you’ll notice that you can do the exact same things on your own for free. Some companies even make you do most of the leg work, which means you don’t really benefit from anything. Here’s what you need to know about how they work so that you can determine whether it’s a service worth paying for.
Obtain Information from You about Errors
Credit repair companies begin the process of disputing errors on your behalf by collecting the necessary information from you. The company you choose will send you copies of your credit reports from all major credit report bureaus and ask you to circle the records that are erroneous. You’ll most likely get a phone interview with a representative to explain why the record is inaccurate or incomplete.
Send Dispute Letters on Your Behalf
The company will then customize a letter template and send the appropriate bureaus credit dispute letters. In the letter, the company will ask for an investigation and for the record to be removed or corrected. It will also submit any documentation that you provided.
Set up Automated Payments
Some credit repair companies also set up automated payments with creditors so that you can work towards paying off your remaining debts. They may or may not try to settle with creditors. That depends on the services they offer.
These are all things that you could be doing yourself, and it may not be worth the expense to pay someone else to do them. The money you save could be put towards paying off your debts.
Obtain Information from You about Errors
Credit repair companies begin the process of disputing errors on your behalf by collecting the necessary information from you. The company you choose will send you copies of your credit reports from all major credit report bureaus and ask you to circle the records that are erroneous. You’ll most likely get a phone interview with a representative to explain why the record is inaccurate or incomplete.
Send Dispute Letters on Your Behalf
The company will then customize a letter template and send the appropriate bureaus credit dispute letters. In the letter, the company will ask for an investigation and for the record to be removed or corrected. It will also submit any documentation that you provided.
Set up Automated Payments
Some credit repair companies also set up automated payments with creditors so that you can work towards paying off your remaining debts. They may or may not try to settle with creditors. That depends on the services they offer.
These are all things that you could be doing yourself, and it may not be worth the expense to pay someone else to do them. The money you save could be put towards paying off your debts.
The 3 Major Credit Bureaus and Why Their Scores Differ
TransUnion, Equifax and Experian are the three major credit bureaus, and they all have different credit scores for each individual with a credit history. The difference in scoring can be confusing because you may not know which one is going to be considered the most by those who are reviewing your credit reports. The three credit bureaus have developed VantageScore in order to make your credit scores easier to understand, but it’s important to know how and why they score your credit they way they do.
Based on Special Scoring Models
Each of the major credit bureaus developed its own scoring model on which it bases all credit scores. As a result, you can get up to a 100-point difference. Here are the ranges to know about:
* Transunion scores range from 300 to 850 points.
* Equifax scores range from 350 to 850 points.
* Experian scores range from 330 to 830 points.
The two commonly used scoring models are called FICO or PLUS.
Data Collection Varies
Creditors may report your information to one or two of the credit bureaus but not to all three. Also, in the process of collecting information, what one of the major credit bureaus ends up with may be far different from the information gathered by the other two. Your financial record has a direct impact on your credit score, and different records will produce different scores. It’s for this reason that lenders and others often average your scores; they are trying to determine a more accurate number.
Check your credit reports for errors and send the major credit report bureaus dispute letters if necessary to make corrections. It may help to bring all three scores closer together.
Based on Special Scoring Models
Each of the major credit bureaus developed its own scoring model on which it bases all credit scores. As a result, you can get up to a 100-point difference. Here are the ranges to know about:
* Transunion scores range from 300 to 850 points.
* Equifax scores range from 350 to 850 points.
* Experian scores range from 330 to 830 points.
The two commonly used scoring models are called FICO or PLUS.
Data Collection Varies
Creditors may report your information to one or two of the credit bureaus but not to all three. Also, in the process of collecting information, what one of the major credit bureaus ends up with may be far different from the information gathered by the other two. Your financial record has a direct impact on your credit score, and different records will produce different scores. It’s for this reason that lenders and others often average your scores; they are trying to determine a more accurate number.
Check your credit reports for errors and send the major credit report bureaus dispute letters if necessary to make corrections. It may help to bring all three scores closer together.
How to Fix Your Credit Score Yourself
The best way to fix your credit score is to start employing good borrowing practices. First, ensure the credit information on your report is correct. Next, take steps to improve the information present. Finally, avoid steps that can actually damage your credit despite having the appearance of financial benefit.
Correct Information
View your credit report at any of the three major agencies. You do not need to know all three as they will likely be very similar. If there is any item reported that you have no knowledge of or believe is incorrect, contact the reporting lender and the credit agency immediately to request correction.
Improve your Score
Once your score is correct, you can take steps to build it up. Take small loans and use your available credit cards where possible. Pay down your balances monthly, and be sure to make all your maintenance payments on time. Instead of paying in cash for small purchases like groceries, consider using a credit card. As long as you repay the balance immediately, the expense will be minimal and the impact for your score will be very beneficial.
Avoid Negative Behavior
Contrary to advertisements, consolidation, refinancing and loan workout plans can actually damage your credit substantially. These options, unless offered in a penalty-free environment, will cause you to lose ground with your credit. Only take these routes if you are in over your head and face default without the help. If you are using a federal program, you may have options without penalties, but this depends on your original loan contracts.
Correct Information
View your credit report at any of the three major agencies. You do not need to know all three as they will likely be very similar. If there is any item reported that you have no knowledge of or believe is incorrect, contact the reporting lender and the credit agency immediately to request correction.
Improve your Score
Once your score is correct, you can take steps to build it up. Take small loans and use your available credit cards where possible. Pay down your balances monthly, and be sure to make all your maintenance payments on time. Instead of paying in cash for small purchases like groceries, consider using a credit card. As long as you repay the balance immediately, the expense will be minimal and the impact for your score will be very beneficial.
Avoid Negative Behavior
Contrary to advertisements, consolidation, refinancing and loan workout plans can actually damage your credit substantially. These options, unless offered in a penalty-free environment, will cause you to lose ground with your credit. Only take these routes if you are in over your head and face default without the help. If you are using a federal program, you may have options without penalties, but this depends on your original loan contracts.
How to Recognize Credit Repair Scams
Learning how to recognize credit repair scams will save you pain and money. The scammers promise to remove negative information from your credit report, so that you can be approved for future credit. They can't deliver on those promises, and the fee you pay to them is lost. The good news is that these scams follow the same patterns, so once you understand how they work, you can avoid them. Here's how they work:
Pay Us First
Credit repair scams work by getting consumers to pay the scam artists money up front, so that they can disappear with it or provide incomplete or inadequate services. You shouldn't pay anyone a fee to repair your credit report, which you can do on your own, and certainly not before they've provided the services they promised. You should also be aware that the Credit Repair Organizations Act makes it illegal for companies to charge upfront fees prior to repairing credit. There are also related state laws that prohibit this practice.
We'll Contact the Credit Reporting Agencies
The pitch made by companies behind credit repair scams is that they'll handle everything, and that there's no need for you to contact the credit reporting agencies on your own. Red flags should go off in your head when any company wants to block you from dealing directly with anyone. If the company you're dealing with tells you this, then you’re probably in the middle of a scam.
Start a New Credit History
Some companies suggest that they can help you start a new credit history altogether by using alternative identification numbers. For example, a company may advice you to obtain an employer identification number (EIN) and to obtain credit using it, instead of using your social security number. That's opening the door to fraud and the company will be long gone with your money when you end up in legal hot water.
We Can Get Rid of Accurate Information
Any information that's accurate on your credit report cannot be removed by you or a "credit repair company." However, this remains to be one of the top credit repair scams going. The company offers to use insider knowledge to remove the record that's accurate, but you have to pay them for their expertise and service. What they don't tell you is that the credit reporting agency cannot and will not do it. To do so for consumers would be to destroy the entire credit reporting system and those agencies aren't going to risk that.
Get a Credit Card from Us
Some consumers feel the need to obtain new credit in order to rebuild their credit. There are credit repair scams to meet that need, and one example consists of the company offering a pre-approved credit card to the prospective victim. All you have to do is call one or more 900-numbers to get your cards. What often happens is that you're charged for the call, and you either get a bogus list of companies offering credit cards or you don't get anything.
Avoiding credit repair scams is difficult if you're feeling hopeless about your debt situation. There are legitimate ways to eliminate debt and get back on the path of good finances for free. Research those strategies first, before seeking help from others.
Pay Us First
Credit repair scams work by getting consumers to pay the scam artists money up front, so that they can disappear with it or provide incomplete or inadequate services. You shouldn't pay anyone a fee to repair your credit report, which you can do on your own, and certainly not before they've provided the services they promised. You should also be aware that the Credit Repair Organizations Act makes it illegal for companies to charge upfront fees prior to repairing credit. There are also related state laws that prohibit this practice.
We'll Contact the Credit Reporting Agencies
The pitch made by companies behind credit repair scams is that they'll handle everything, and that there's no need for you to contact the credit reporting agencies on your own. Red flags should go off in your head when any company wants to block you from dealing directly with anyone. If the company you're dealing with tells you this, then you’re probably in the middle of a scam.
Start a New Credit History
Some companies suggest that they can help you start a new credit history altogether by using alternative identification numbers. For example, a company may advice you to obtain an employer identification number (EIN) and to obtain credit using it, instead of using your social security number. That's opening the door to fraud and the company will be long gone with your money when you end up in legal hot water.
We Can Get Rid of Accurate Information
Any information that's accurate on your credit report cannot be removed by you or a "credit repair company." However, this remains to be one of the top credit repair scams going. The company offers to use insider knowledge to remove the record that's accurate, but you have to pay them for their expertise and service. What they don't tell you is that the credit reporting agency cannot and will not do it. To do so for consumers would be to destroy the entire credit reporting system and those agencies aren't going to risk that.
Get a Credit Card from Us
Some consumers feel the need to obtain new credit in order to rebuild their credit. There are credit repair scams to meet that need, and one example consists of the company offering a pre-approved credit card to the prospective victim. All you have to do is call one or more 900-numbers to get your cards. What often happens is that you're charged for the call, and you either get a bogus list of companies offering credit cards or you don't get anything.
Avoiding credit repair scams is difficult if you're feeling hopeless about your debt situation. There are legitimate ways to eliminate debt and get back on the path of good finances for free. Research those strategies first, before seeking help from others.
Sample Credit Dispute Letter
A credit dispute letter is a tool that you can use to get inaccurate information removed from your credit report. You can ask each of the consumer reporting agencies to delete the record or to modify it in some other way. The departments in charge of handling disputes will conduct an investigation, and either grant or deny your request. Here’s what you need to know about writing a credit dispute letter:
Sample Credit Dispute Letter
The three major components of any letter you write are:
* Your statement that the record in dispute is incomplete or inaccurate
* Explanation of the reasons why the record is not complete or correct
* A specific action request, such as to delete or change the information
The Federal Trade Commission offers a full sample credit dispute letter when contesting errors on your credit report at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm. Here’s an excerpt from the letter which incorporates the three major components:
"This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information."
Things to Accompany the Letter
Investigators at the reporting agencies will pay particular attention to the reasons you've stated for why the record should be modified. It's important to provide as detailed an explanation as possible. You'll also need to include documentation to support your claims. You have many options for documentation support, including:
* Copy of your credit report with the record highlighted or encircled
* Court documents
* Records of payments
* Letters from creditors confirming the full payment of debt
It's often not enough to make your requests without some documentation if you want investigators to take the actions you've requested. Make sure that your documentation relates to the explanations you've given in your letter. If what you provide has nothing to do with your statement that the record is incomplete or not correct, then the credit dispute letter won’t be effective. To obtain a free credit report, visit www.annualcreditreport.com.
Where to Send the Letter
You should address your credit dispute letter to the complaint department at each of the consumer reporting agencies. The addresses are as follows:
TransUnion
Complaint Department
P.O. Box 6790
Fullerton, CA 92634
Experian
Complaint Department
P.O. Box 9532
Allen, TX 75013
Equifax
Complaint Department
P.O. Box 740241
Atlanta, GA 30374-0241
Your letter will be forwarded to investigators who will notify you that they are in receipt of your letter, and at a later date will explain the outcome of your request.
Take immediate action by sending a credit dispute letter when you discover a discrepancy on your credit report. You can order a free credit report annually or pay for a service that sends alert based on new records that appear on your credit report.
Sample Credit Dispute Letter
The three major components of any letter you write are:
* Your statement that the record in dispute is incomplete or inaccurate
* Explanation of the reasons why the record is not complete or correct
* A specific action request, such as to delete or change the information
The Federal Trade Commission offers a full sample credit dispute letter when contesting errors on your credit report at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm. Here’s an excerpt from the letter which incorporates the three major components:
"This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information."
Things to Accompany the Letter
Investigators at the reporting agencies will pay particular attention to the reasons you've stated for why the record should be modified. It's important to provide as detailed an explanation as possible. You'll also need to include documentation to support your claims. You have many options for documentation support, including:
* Copy of your credit report with the record highlighted or encircled
* Court documents
* Records of payments
* Letters from creditors confirming the full payment of debt
It's often not enough to make your requests without some documentation if you want investigators to take the actions you've requested. Make sure that your documentation relates to the explanations you've given in your letter. If what you provide has nothing to do with your statement that the record is incomplete or not correct, then the credit dispute letter won’t be effective. To obtain a free credit report, visit www.annualcreditreport.com.
Where to Send the Letter
You should address your credit dispute letter to the complaint department at each of the consumer reporting agencies. The addresses are as follows:
TransUnion
Complaint Department
P.O. Box 6790
Fullerton, CA 92634
Experian
Complaint Department
P.O. Box 9532
Allen, TX 75013
Equifax
Complaint Department
P.O. Box 740241
Atlanta, GA 30374-0241
Your letter will be forwarded to investigators who will notify you that they are in receipt of your letter, and at a later date will explain the outcome of your request.
Take immediate action by sending a credit dispute letter when you discover a discrepancy on your credit report. You can order a free credit report annually or pay for a service that sends alert based on new records that appear on your credit report.
What to Do if You're a Victim of Identity Theft
If you find yourself a victim of identity theft, you can take some steps to minimize the damage and protect yourself against future theft in the process. It's important to react as soon as you discover that a theft has taken place, so that thieves don't have more time than necessary to completely destroy your finances or cause you a lot of problems. Here's what you should do:
Investigate All Wrong Doing
You have to know the extent of the theft in order to take the appropriate actions. To begin with, you should obtain copies of your credit report to see what unauthorized accounts have been opened. You should also check your bank accounts, credit accounts and all other accounts to search for fraud activities. Once you have an idea of what's happening, you'll know what steps to take.
File a Police Report
A police report is probably not going to cause the police to pursue the matter, because other types of crimes are often given a higher priority. However, it is helpful to have one as you work to undo the fraud and theft. For example, your bank may readily refund any money stolen if you submit a copy of the police report that documents the crime. It's also part of your legal documentation should you decide to pursue the matter in court.
Notify Credit Bureaus
Write a letter to all three credit bureaus stating that you are a victim of identity theft. Explain the circumstances, and relay any information you have about fraudulent accounts opened in your name. Each agency, TransUnion, Equifax and Experian have fraud departments to handle identity theft cases. You'll probably get a fraud alert on your file to make it difficult for future accounts to be opened without your authorization.
Contact Financial Institutions
You also need to send letters to every financial institution where you have an account, and where there's evidence of fraudulent activity. They may also have a fraud department as well to help each victim of identity theft. It's also a good idea to place a call to those institutions where you haven't noticed any tampering, just in case it's next in line. You can ask them to place a hold on the account and not to authorize any transactions until you give them further notice.
Close Fraudulent and Tampered Accounts
As soon as you discover accounts that have been opened in your name by an identity thief or tampered with, your best option is to close those accounts. Go the banks and other financial institutions in person if you can, but if not, close the accounts in writing. You don't know who has your information and how many times it may have been sold. Even if you ask for holds to be placed on the accounts, you may end up with problems in the future once you lift hose holds. Follow up by filling out the forms necessary to dispute purchases or transactions that you did not authorize.
You don't have to remain a victim of identity theft. Take these action steps to minimize the damage done and reclaim your life.
Investigate All Wrong Doing
You have to know the extent of the theft in order to take the appropriate actions. To begin with, you should obtain copies of your credit report to see what unauthorized accounts have been opened. You should also check your bank accounts, credit accounts and all other accounts to search for fraud activities. Once you have an idea of what's happening, you'll know what steps to take.
File a Police Report
A police report is probably not going to cause the police to pursue the matter, because other types of crimes are often given a higher priority. However, it is helpful to have one as you work to undo the fraud and theft. For example, your bank may readily refund any money stolen if you submit a copy of the police report that documents the crime. It's also part of your legal documentation should you decide to pursue the matter in court.
Notify Credit Bureaus
Write a letter to all three credit bureaus stating that you are a victim of identity theft. Explain the circumstances, and relay any information you have about fraudulent accounts opened in your name. Each agency, TransUnion, Equifax and Experian have fraud departments to handle identity theft cases. You'll probably get a fraud alert on your file to make it difficult for future accounts to be opened without your authorization.
Contact Financial Institutions
You also need to send letters to every financial institution where you have an account, and where there's evidence of fraudulent activity. They may also have a fraud department as well to help each victim of identity theft. It's also a good idea to place a call to those institutions where you haven't noticed any tampering, just in case it's next in line. You can ask them to place a hold on the account and not to authorize any transactions until you give them further notice.
Close Fraudulent and Tampered Accounts
As soon as you discover accounts that have been opened in your name by an identity thief or tampered with, your best option is to close those accounts. Go the banks and other financial institutions in person if you can, but if not, close the accounts in writing. You don't know who has your information and how many times it may have been sold. Even if you ask for holds to be placed on the accounts, you may end up with problems in the future once you lift hose holds. Follow up by filling out the forms necessary to dispute purchases or transactions that you did not authorize.
You don't have to remain a victim of identity theft. Take these action steps to minimize the damage done and reclaim your life.
Credit Repair Scams: What to Do if You're a Victim
Credit repair scams abound as more and more people who have taken on debt are desperate to find a way out. The scam is the same over and over again. These "companies" promise to erase your credit and help you start fresh, and all you have to do is pay them a fee. What ends up happening is that you're in a worse position than before once you start dealing with these scam artists, and you're out the money you pay them. Here's what to do if you've been the victim of credit repair scams.
Contact State Consumers Affairs
There are state laws to protect consumers against credit repair scams. Start by contacting your state's consumers affairs office about what happened. The office would be helpful in explaining your credit rights, as well as investigate your complaints against the individuals and companies involved. The agency might also refer you to the state attorney general.
Report Scam to the Attorney General
You don't have to go through the state consumers affairs office to report the scam to the attorney general. The office of the attorney general in your state also gets complaints of credit repair scams and is charged with enforcing the laws against those who are perpetrating those crimes. You can contact the office directly and request that they investigate and pursue the matter for you. It's within the discretion of the attorney general which individual cases to pursue, but if your case is chosen, you'll have a chance of recovering any money you paid as a result of the scam.
Avoid companies in the future that want you to pay them to manage your debt. These are most likely credit repair scams that will set you back, rather than help you become debt free.
Contact State Consumers Affairs
There are state laws to protect consumers against credit repair scams. Start by contacting your state's consumers affairs office about what happened. The office would be helpful in explaining your credit rights, as well as investigate your complaints against the individuals and companies involved. The agency might also refer you to the state attorney general.
Report Scam to the Attorney General
You don't have to go through the state consumers affairs office to report the scam to the attorney general. The office of the attorney general in your state also gets complaints of credit repair scams and is charged with enforcing the laws against those who are perpetrating those crimes. You can contact the office directly and request that they investigate and pursue the matter for you. It's within the discretion of the attorney general which individual cases to pursue, but if your case is chosen, you'll have a chance of recovering any money you paid as a result of the scam.
Avoid companies in the future that want you to pay them to manage your debt. These are most likely credit repair scams that will set you back, rather than help you become debt free.
How to Improve Your Business Credit Score
Your business credit score is built the same way as your personal score. Your business is assigned a number, called a taxpayer identification number, and any lender doing business with you will ask for this number. Then, the lender will report how successful you were at repaying your debt to the major credit agencies, and the agencies will file the reports under your number. If you want to increase your score, try these tips to associate positive debt arrangements with your tax payer ID.
File Loans in your Business Name
The first and most important step to increase your credit as a business is to make sure all of your debts are in your business name. When you first open your doors, you may take loans in your personal name or in the name of one of the owners. This is often necessary since your business has no credit of its own. However, as the business grows, it will develop a legal identity and a financial profile. This can be used to secure debts independent of your name, and you should begin making these arrangements as soon as possible. If you have a business loan secured with your personal information, replace this with a business loan secured in the business's name as soon as possible.
Grow your Business Capital
Credit is determined using a complex algorithm, and a key part of this algorithm is how much worth your business has compared to its debt. By building up your assets and capital, you can increase your business's credit score. If you do not have a large initial asset base, consider taking on investors. Unlike loans, funds from investors do not count as debt, and they will only add to your asset base without increasing your debt load.
Open a Business Credit Card
A factor in the way your credit is calculated is a comparison to the potential credit available to you versus how much of that credit is currently in use. By increasing the amount of credit in your business's name, you can boost your credit score. Open a business credit card, and use the card wisely. As long as the balance remains low, this will help your score. Do not open too many credit cards, however, as this can also drop your score. Instead, you should have a healthy credit-to-debt ratio without having too much available credit.
Pay Debts on Time
The most basic advice about credit is also the best: build your credit by paying your debts on time. When you pay off your credit card each month, you receive a little boost in your score. These two or three points each month can add up to huge increases in your credit score. You will see the largest increases when you pay off big loans, such as your start-up loan. To keep these boosts coming, finance business materials or machinery and pay off the debts on time. If you continue this record, your business will have a very high rating in just a few years.
File Loans in your Business Name
The first and most important step to increase your credit as a business is to make sure all of your debts are in your business name. When you first open your doors, you may take loans in your personal name or in the name of one of the owners. This is often necessary since your business has no credit of its own. However, as the business grows, it will develop a legal identity and a financial profile. This can be used to secure debts independent of your name, and you should begin making these arrangements as soon as possible. If you have a business loan secured with your personal information, replace this with a business loan secured in the business's name as soon as possible.
Grow your Business Capital
Credit is determined using a complex algorithm, and a key part of this algorithm is how much worth your business has compared to its debt. By building up your assets and capital, you can increase your business's credit score. If you do not have a large initial asset base, consider taking on investors. Unlike loans, funds from investors do not count as debt, and they will only add to your asset base without increasing your debt load.
Open a Business Credit Card
A factor in the way your credit is calculated is a comparison to the potential credit available to you versus how much of that credit is currently in use. By increasing the amount of credit in your business's name, you can boost your credit score. Open a business credit card, and use the card wisely. As long as the balance remains low, this will help your score. Do not open too many credit cards, however, as this can also drop your score. Instead, you should have a healthy credit-to-debt ratio without having too much available credit.
Pay Debts on Time
The most basic advice about credit is also the best: build your credit by paying your debts on time. When you pay off your credit card each month, you receive a little boost in your score. These two or three points each month can add up to huge increases in your credit score. You will see the largest increases when you pay off big loans, such as your start-up loan. To keep these boosts coming, finance business materials or machinery and pay off the debts on time. If you continue this record, your business will have a very high rating in just a few years.
How Business Credit Scores Are Determined
When you first open your business, your business credit score may be nonexistent. This may require you to open loans with your personal name. However, aside from these initial loans, your personal credit will have nothing to do with your business's credit. In fact, business scores are calculated with different factors.
Balance Sheets
The primary factor used to determine a business's financial health is its balance sheet. Reviewing your financial report that lists your assets, debts and liabilities will be a top priority of any lender considering you for a loan. Building up your balance sheet takes more than just paying off debts on time. You must show you have an asset base large enough to continue to fuel your operations in the future. You must also show you have turned past debts into income at a high rate in order to remain financially appealing to lenders.
Income and Debt Ratios
Your business's income and debt ratios play large roles in your credit score. A lender will first view your balance sheet, comparing your assets to your liabilities. Then, a lender will view your accounts receivable, attempting to learn your anticipated profits over a certain period. Even a business with a low asset base can be a good borrower if the business has high income but relatively few debts to its name. For example, a web design company has few assets other than a personal computer. However, if the company is owned and operated by one person with no debts, this low asset base may not matter. As long as the individual's income is high enough to repay debt costs, a lender will understand the operation is very lean yet deserving of a loan.
Balance Sheets
The primary factor used to determine a business's financial health is its balance sheet. Reviewing your financial report that lists your assets, debts and liabilities will be a top priority of any lender considering you for a loan. Building up your balance sheet takes more than just paying off debts on time. You must show you have an asset base large enough to continue to fuel your operations in the future. You must also show you have turned past debts into income at a high rate in order to remain financially appealing to lenders.
Income and Debt Ratios
Your business's income and debt ratios play large roles in your credit score. A lender will first view your balance sheet, comparing your assets to your liabilities. Then, a lender will view your accounts receivable, attempting to learn your anticipated profits over a certain period. Even a business with a low asset base can be a good borrower if the business has high income but relatively few debts to its name. For example, a web design company has few assets other than a personal computer. However, if the company is owned and operated by one person with no debts, this low asset base may not matter. As long as the individual's income is high enough to repay debt costs, a lender will understand the operation is very lean yet deserving of a loan.
Credit score
A credit score is a numerical expression based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person. A credit score is primarily based on credit report information typically sourced from credit bureaus.
Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Lenders also use credit scores to determine which customers are likely to bring in the most revenue. The use of credit or identity scoring prior to authorizing access or granting credit is an implementation of a trusted system.
Credit scoring is not limited to banks. Other organizations, such as mobile phone companies, insurance companies, landlords, and government departments employ the same techniques. Credit scoring also has a lot of overlap with data mining, which uses many similar techniques.
FICO is a publicly-traded corporation (under the ticker symbol FICO) that created the best-known and most widely used credit score model in the United States.
Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Lenders also use credit scores to determine which customers are likely to bring in the most revenue. The use of credit or identity scoring prior to authorizing access or granting credit is an implementation of a trusted system.
Credit scoring is not limited to banks. Other organizations, such as mobile phone companies, insurance companies, landlords, and government departments employ the same techniques. Credit scoring also has a lot of overlap with data mining, which uses many similar techniques.
FICO is a publicly-traded corporation (under the ticker symbol FICO) that created the best-known and most widely used credit score model in the United States.
How Credit Scores Work
We depend on credit for so many important things in life -- whether it's for buying a car, house or computer or getting a student loan. A three-digit number -- your credit score -- can determine whether you can do these things and even how much it will cost you.
How can a simple number determine whether you can buy a house or car? If you've read How Credit Reports Work, you know that your credit report contains a history of how you've paid your bills, how much open credit you have, and anything else that would affect your creditworthiness. Your credit score boils down all of that information to a three-digit number. Using the credit score, lenders can predict with some accuracy how likely the borrower is to repay a loan and make payments on time. It's how electronics and department stores can offer instant credit.
This incredibly important number, which affects how much you pay for credit, insurance and other life necessities, used to be hidden from consumers. Until recently, only lenders and other businesses that used the score could access it. Fair Isaac and Company, which developed the score, felt that the score would only confuse consumers since there was nothing to tell them what it meant or what lenders were looking for.
In 2001, however, all of this changed due to pressure from the U.S. Congress and industry and consumer groups. Now you can view your credit score -- for a fee -- from credit reporting agencies and credit monitoring services.
But to help us understand that number and ultimately know how to improve it, we'll need to find out how it's calculated.
How can a simple number determine whether you can buy a house or car? If you've read How Credit Reports Work, you know that your credit report contains a history of how you've paid your bills, how much open credit you have, and anything else that would affect your creditworthiness. Your credit score boils down all of that information to a three-digit number. Using the credit score, lenders can predict with some accuracy how likely the borrower is to repay a loan and make payments on time. It's how electronics and department stores can offer instant credit.
This incredibly important number, which affects how much you pay for credit, insurance and other life necessities, used to be hidden from consumers. Until recently, only lenders and other businesses that used the score could access it. Fair Isaac and Company, which developed the score, felt that the score would only confuse consumers since there was nothing to tell them what it meant or what lenders were looking for.
In 2001, however, all of this changed due to pressure from the U.S. Congress and industry and consumer groups. Now you can view your credit score -- for a fee -- from credit reporting agencies and credit monitoring services.
But to help us understand that number and ultimately know how to improve it, we'll need to find out how it's calculated.
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