How to make sense of your credit report

Breaking down this important record — how to read it, how to fix it

It’s important to check your credit regularly when you are trying to build quality credit and avoid identity theft. There are three nationwide credit agencies: Experian, Equifax, and TransUnion that can provide a free credit report once every 12 months. It’s not always the easiest thing to decipher a credit report and know what to look for.
Here are some tips.

Credit report vs. credit score — what’s the difference?  

Your credit report has more information and is more in-depth than just your credit score. (Your score is not included in the free report, but can be authorized by federal law for a free.)

The credit report is a detailed listing of all your debts and payments going back through your entire payment history. According to Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network, “For each credit account you have, the report shows creditors’ names, the amount owed, the highest balance owed, available credit, whether the account is open or closed (and who closed it), the number of times a payment was past due and whether the account is in default.”

The five sections of your credit report include: 

• Identifying information. This is where you’ll find your name, address, date of birth, Social Security number and aliases. It may be a good idea to review this information, because you may end up getting charged for debts that do not belong to you.
• Creditor information. This section is usually the longest and contains all of your information such as; how much you owe, who you owe, current or past due debts, whether it is opened or closed, and other status information. It’s imperative to make sure that this information is correct.
• Collection accounts. This section lists any and all accounts that are in collection. Make sure this information and is accurate, and if you do have debts try to pay them off as soon as possible. Once the debts are paid, be sure to ask the credit bureaus explaining that the debt is paid off.
• Public records. Information regarding bankruptcy judgments, liens, and overdue child support will be displayed here. Review for accuracy as bankruptcy and financial problems can remain for 7-10 years.
• Inquiry section. This section is a list of businesses that have reviewed your credit information. If there are unfamiliar names checking out your credit, it would be best to contact them and find out why.

In the majority of cases the credit score ordered will be your FICO score which is named for the company that developed it in 1989. Each agency has its own way of calculating the credit score so your FICO score can vary depending on the credit bureau that provides the score. The exact formula for determining a FICO score is classified, but FICO does disclose some basics that can impact your score. For example:

• Payment history. Any late payments – credit card, car loans, or mortgages will cause a negative impact to the FICO score. On-time paid bills will increase the score. 35% of a FICO score is applied here.

·         Amounts owed. If there is a history of small balances and payments made on time, your score will improve. If there are high percentages of credit owed, it will likely harm your score. This category accounts for 30% of a FICO score.

·         Length of credit history. This accounts for 15% of your score and it determines how long your credit accounts have existed and how long since you have utilized some of the accounts.

·         Types of credit used. This is worth 10% of your FICO score and looks at a mixture of a number of loans, including mortgage, revolving, installment, and consumer finance. Having different types of credit is beneficial for your score.

• New credit. The last 10% of your FICO score is determined by how many new credit accounts are opened up in what period of time. The shorter period of time with more accounts, the more it hurts your credit score overall.

The percentages for each category should be able to assist consumers in determining what areas are most impactful to their credit score.

What if there is an error on my credit score?

If there is a problem with your credit score, call the credit bureau that provided the report and state your case. The bureau is required to make fixes within 30 days or the line of credit must be halted until the problem is fixed. Be sure to plan accordingly and pay off any and all revolving debt!

Marcadis Singer, PA

Florida Collection Attorney

5104 South Westshore Blvd.

Tampa, Florida 33611

info @ marcadislaw.com

(888) 547-1881

(813) 288-1881

New Clients 

Ext. 247 Gil Singer

Ext. 240 Ralph Marcadis

Existing Client Client Liaison

Ext. 242

To Pay a Claim

Ext.  245

http://www.marcadislaw.com

Debt Collection Questions - Part 2

We are often presented with questions by the people we collect from.

These answers should be considered general common sense, and not specific legal advise.  Every one's situation is different, and we are specifically not offering legal advise in the following article.

I co-signed for my nephew, and now he can't make payments!

If you cosigned, then you are liable, that's what co-signing means.   You are just as liable as your nephew.  If  you want to protect your credit, then paying makes a great deal of sense.  Any creditor has all the the rights and remedies against a co-signer as the primary.  PLEASE be sure you know that when you sign on the dotted line.  Sometimes, it is a better idea to loan the money directly to your nephew, and have him pay you back, than to be blindsided to discover no payments have been made for months, and you are responsible.

Debts that are past the statute of limitations are still on my credit report!

Different debt has a different "statute of limitation".  A statute of limitation, is the period of time that a court will enforce your obligation to pay a debt.  After a certain period of time, while you may still owe the debt, the court will not enforce it.  This has nothing, absolutely nothing, to do with reporting the debt.   A courts ability to enforce a debt is entirely and totally separate from a credit agency's reporting ability.

The general guideline for reporting is that the credit reporting agency may report your credit delinquency for up to 7 years from the first date of delinquency  (defined as more than 180 days past due).  This is totally separate from a statute of limitations on collecting a debt.

Marcadis Singer, PA

Florida Collection Attorney

5104 South Westshore Blvd.

Tampa, Florida 33611

info @ marcadislaw.com

(888) 547-1881

(813) 288-1881

New Clients 

Ext. 247 Gil Singer

Ext. 240 Ralph Marcadis

Existing Client Client Liaison

Ext. 242

To Pay a Claim

Ext.  245

2014 The Year Ahead in Debt Collection Part 5

Credit Report Disputes

Amazingly, as long as the big 3 credit bureaus have been in existence, there has never been a fine for sloppy practices or ignoring consumer disputes.

One has to ask, are they that well run, or has oversight been that sorely lacking?

This is a question that will likely be addressed by the agency of the coming year.

One of the thorniest issues will be finding a way to disentangle individuals credit.  For instance, when there is a divorced couple with one being a responsible bill payer, and the other not.  Thsi tangling can become a credit untangling nightmare.


Surprisingly, if you extrapolate from comments made by Chi Chi Wu, a lawyer at the National Consumer Law Center focussing on consumer credit issues  "We would like to see matching  <social security number> based on all nine digits of the social security number." that implies at least to us, that someone's credit with a similar personal history, just a number or two off from my social security number, could have a big impact on my own personal score.

These are things well worth the time and effort of the board to sort out.

Marcadis Singer, PA

5104 South Westshore Blvd.

Tampa, Florida 33611

info @ marcadislaw.com

http://www.marcadislaw.com

(888) 547-1881

(813) 288-1881

6 Sure Fire Ways To Get Upside Down in Debt! - (Con't.)

6. Play the balance transfer game.

Taming the debt monster is mostly about a mindset to be free of debt, and discipline.

Don't Feed The Debt Monster

The balance transfer game is a shell game, that seems to make a lot of sense on the surface.   There's a zero interest, or low interest card you can apply for.   Get it, and move all the debt from your high interest card to the low interest card, planning to pay it off in the 6 months low interest window.

The problem here is that you now have 2 cards which you can stack up debt with.  The low initial interest rate card is rarely paid off in the 6 month window.  The card issuers know this, that's why they offered it to you.   With the low interest card now maxed by moving all the high interest debt to it, you begin to re-use the high interest card as it now has breathing room.  Once the no interest window is over.. BAM... you now have 2 high interest cards, with balances, that you are paying for.

If you are given the opportunity to get a no interest introductory card, chances are that it is because your credit has improved enough that a card issuer is prepared to take additional risk offering you more credit.  Perhaps, your present card holder is not prepared to lose your debt business.   Try calling your current card holder, and explaining that you have another card offer, and asking for a reduction in interest to keep you as a customer.

It doesn't always work, but chances are it will work more often than thinking you will pay off the low interest card in time to not be paying on 2 high interest cards instead of one!

6 Sure Fire Ways To Get Upside Down in Debt! - (Con't.)

3. Overspend or simply spend spending future earnings that haven't been banked yet.

That contract is going to come in next month with a big fat commission, so I can afford to buy the television today... right?

One of life's little realities are that the money doesn't always come, or come when you expect it, but the credit card bill is always on time.

Another trap is that the money comes, but before the credit card bill arrives, and gets spent on a celebratory trip, and then the credit card comes, and there's no extra money to pay it.

One of the best strategies is to spend when the money gets there, don't spend ahead.

7 Credit Falacies!

So much misinformation about what impacts your credit score.

We'd like to set the record straight on 7 Credit Fallacies.

Bottom Line, as much as possible, be responsible, don't run up debt you can't afford, and live up to your obligations.

Fallacies

1.  The feds own credit bureaus.

HOOEY - the 3 major credit bureaus Experion Equfax and TransUnion are for profit public companies.

2.  Your Education Impacts your Credit Score.

As if someone would downgrade Bill Gates' credit because he didn't finish Harvard!   Credit scores are a measurement of your credit risk, and does not look at your education, race, bender or nationality.

3.  Multiple Inquiries Hurt your Credit Score

This used to be the case, but when you shop for a major purchase, it is normal to have a brief period with multiple inquiries as you find .. say.. financing for a car.   Multiple requests in a short period are often treated as as single inquiry, and have nearly no impact on your score.

4.  Checking your own credit report hurts your score.

FALSE!  In fact, savvy credit management dictates that you DO check your credit reports to be sure that everything there is accurate!

5.  It costs to see your credit history.

NOPE - you get - by law - a free credit report every year by going ot http://www.AnnualCreditReport.com

6.  Credit Counseling hurst credit scores

Getting help does not impact your score, and a good credit counselor can help you budget, get your finances under control, and improve your score.

7.  It Takes Years to change your credit score.

Your FICO score is updated monthly, and can be continuously and constantly improved and updated.  manage your credit wisely, and watch that score climb.