Free Credit Reports

On December 4, 2003, President George W. Bush signed into law the Fair and Accurate Credit Transactions (FACT) Act. This came about as the result of a rise in identity theft and the need for citizens to able to view and monitor their credit reports to check for accuracy of information. Recent statistics have shown that 80% of credit reports contain errors!

Now, all United States citizens are entitled to one free credit report each year from each of the three credit reporting agencies: Experian, Equifax, and TransUnion. This one free credit report can be very valuable to the everyday consumer as it is used by most lending institutions and credit card companies to evaluate you and decided if you are a good credit risk.

There are various ways you can go about getting your free credit report. You can go to any of the credit reporting agencies' websites: www.experian.com, www.equifax.com, or www.transunion.com. There will be links there that can guide you through getting your free credit report.

Probably one of the easier ways, however, to go about it is to visit www.annualcreditreport.com. They will guide you through the process by asking a series of questions and asking personal things to help determine that you are who you say you are. Within a few moments, your free credit report will appear on your computer screen and you will be able to save it to your computer and print it out so you can check for any mistakes.

Many people feel that the FACT Act is one of the best pieces of legislation to come into effect in a long time. Many years ago, the everyday consumer would have to pay money to see their credit report. The information was almost held hostage unless that person wanted to pay up. The FACT Act was written and passed to prevent this.

Legislators agreed that people should have access to information about them and that they deserved to be able to see what the credit reporting agencies have compiled about them. So now, each and every American can get a free credit report each year.

We urge you to get your free credit report right now if you haven't already. It is how lending companies decide if you can get a car loan, a home loan, a line of credit, and even some types of jobs. For most Americans, this is very important. So, go get your free credit report and stay on the road toward having a clean credit record.

Expert Credit Consultants, LLC specializes in establishing business credit and funding using the exclusive Business Credit and Finance Suite as well as credit restoration and optimization. www.ExpertCreditConsultants.com.

Late Payments and Credit

Making your credit card payments on time is extremely important to your credit score. Late payment fees and higher interest rates are undesired results of late credit card payments.  

What does a late payment really do to your score? Credit score calculation doesn't treat all late payments the same. While thirty and sixty day late payments affect your credit score more in the months they occur, their effects diminish over time as long as they’re isolated incidents. A ninety-day late payment, on the other hand, is more harmful to your credit score, especially if it occurred within the past 24 months.

Whether it is a 30, 60, or 90 day late payment, the results are detrimental to your credit score, so you don’t want to drop the ball and miss a payment.  How your creditors respond to late payments can continue to affect you for months, and even years, to come. 

Five Things Happen When You Pay Late

1.       Your creditor will charge a late fee. Your next billing statement will include a fee for the late/missed payments. Late fees typically range from $35 to $50. You'll receive a late fee each month your payment is late.

2.       Your interest rate will increase. Creditors don’t just penalize you with a fee, they’ll often increase your interest rate to the default rate. The higher interest rate increases your finance charges making it more expensive to carry a balance.

3.       Other credit card interest rates might increase. If any of your other creditors include a universal default clause in your card agreement, you’ll see those interest rates rise as well.

4.       The credit bureaus are notified when your payment is more than 30-days late.  An entry is added to your credit report and will stay for seven years.

5.       Your credit score will drop. Remember, your payment history makes up 35% of your credit score. Late payments can have a significant effect on your score affecting your ability to get new credit in the future!

Defensive Tip: Set up auto-pay on your all your credit cards to make the minimum payments. This will ensure that at least your minimum payment is made on time, regardless of how hectic things can get! This is what we call strategic planning.

Expert Credit Consultants, LLC specializes in establishing business credit and funding using the exclusive Business Credit and Finance Suite as well as credit restoration and optimization. www.ExpertCreditConsultants.com.

The Truth on Credit Repair Companies

Contrary to what the credit bureaus would like you to believe, credit repair does work. This is, of course, provided you are getting the best credit information and advice and have an experienced professional working on your case.

Anyone with a credit score below 720 can benefit long-term from the advice and credit information provided through credit repair companies; however, there are times when your own limitations make adhering to this advice impossible. The two limiting factors are: (1) your financial situation and (2) the time frame within you need to reach your results. It is possible to remove anything from a credit report, even accurate items, if the creditor does not adhere to the law that outlines what needs to be done and by when. Just because you have a certain type of account removed at one time does not mean other, similar items are going to be able to be removed, even with the same circumstances. A hit-or-miss aspect exists in credit repair, because credit repair relies not only on the strategies of the person attempting to repair the credit, but also on the effectiveness or ineffectiveness of the creditors and credit bureaus in adhering to the laws.

The reason credit repair has received such a bad name is due to the abundance of scam artists who flock to the easy money made available by people desperate for this type of service. This unfortunate reality leads the credit bureaus and the FTC to make blanket, untrue statements such as, "Credit repair does not work ever and there is nothing credit repair companies can do for you that you can't do for yourself." Given that approximately 80% of credit repair companies are scam artists, promising the world and then disappearing when you pay, the credit bureaus and the FTC are forced to make such bold statements. It would be impossible for them to explain the truth to consumers without causing them to make a bad choice that would result in them getting scammed. As a result, the credit bureaus and the FTC must adhere to the "credit repair does not work" position.

As I have stated, credit repair does work, but...don't let anyone tell you that credit repair is effective every time. Its success varies with the number of players in the game, some of whom never perform consistently. Even if you have a true master of credit repair on your side, you have to take into account that sometimes the other players perform in a way that throws your master off his game. Even if you follow the same approach with every situation that arises when doing credit repair, your results will still vary due to the other players involved. So if credit repair companies tell you they can get everything repaired on your credit, run the other way, because, at best, the pendulum will swing widely both ways for the same situation.

Credit repair limitations do occur under the following situations. These situations make it nearly impossible for credit repair to help someone needing results within six months or so. Please keep in mind even when you can't be helped in the short term, the credit information that can be given now, if coming from a professional, can prevent you from making a mistake in the near future that may worsen your situation. Here are examples of situations where not much can be done within a six to twelve month period.

1. If more than 50% of the negative accounts showing on the credit report appear as unpaid collections, charge-offs, repossessions, or foreclosures and you do not have the money to either pay the accounts in full or settle them.

The only way to prevent this is to bring the account current by paying the past due amount, or, in the case of a collection, charge-off, repossession, or foreclosure, pay the balance in full or settle it for pennies on the dollar. Unpaid accounts that do not have collection, charge-off, repossession or foreclosure status require only that the past due balance be paid to be considered current. Unless the negative account is a public record, the only way to keep it from being re-reported is to make sure the status is "current, paid, settled, transferred or sold."

Public records are the only negative items that do not need to be paid to prevent re-reporting. Because they are only reported once, public records, such as unpaid judgments and tax liens, can remain unpaid and yet will not reappear once they are removed. In fact, the only time they reappear is when the initial reason for removal was the public record agency failing to respond the credit bureaus' verification request with-in the 30 day period outlined by the Fair Credit Reporting Act, in which case the credit bureau would reinsert the public record if and when the public record agency responds to the credit bureaus after that 30 day period.

2. Credit repair is nearly impossible if you can't pay your minimum monthly payments and you keep adding new late payments to your report. This is a "spinning wheels" scenario that rarely yields much improvement to your credit score.

In conclusion, you can repair your credit if you hire a pro and listen to his or her professional advice. The effectiveness of the credit repair depends not only on the skill of the professional you hire, but also your ability to cooperate with his or her advice.

Expert Credit Consultants, LLC specializes in establishing business credit and funding using the exclusive Business Credit and Finance Suite as well as credit restoration and optimization. www.ExpertCreditConsultants.com.