Just what is a "Credit Bureau"?
Define "Credit Report"
Define "Credit Score"
How does this impact me?
What is your role in this?
But isn't it illegal to get help with your credit?
How much can I expect my credit score to increase?
Am I guaranteed results?
How much time will it take?
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Just what is a "Credit Bureau"?
A "Credit Bureau" or "Credit Repository" is a privately owned company that amasses and stores records on the payment habits and credit history of millions of individual consumers. They generate billions of dollars in profits by selling these records to mortgage and other lenders.
They have no legal authority as they are in no way affiliated with the US government. But they nevertheless have enormous power and influence over the lives of individual Americans!
In the United States there are three major credit bureaus. They are:
Equifax
Experian
TransUnion
Define "Credit Report" back to top
By gathering information from public records, lenders, debt collectors and the court system, credit bureaus assemble information on individual citizens into a file called a "Credit Report."
Your credit report has information on your accounts with mortgage and car loan lenders, merchant lenders and credit card companies.
It also has public records such as court judgments, foreclosures, repossessions, liens and bankruptcies.
Now when a lender is evaluating a loan applicant on his credit worthiness he will contact one (or more) of the credit bureaus and buy a copy of the credit report for that person. Based on the information in the credit report and the "Credit Score" the lender will decide whether the borrower is a good risk or a poor one.
The applicant is granted or denied a loan based on his decision. If he is granted a loan, the credit report and score will determine what interest rate he will have to pay.
Define "Credit Score" back to top
Your credit worthiness is reflected in your "Credit Score". This is a 3 digit number assigned to you by each credit Bureau based on your credit report. The higher your score, the better.
This shows you the range of the scores.
Below 585 Very poor
585 - 669 Poor
670 - 699 Fair
700 - 729 Good
Above 730 Excellent
The bureaus determine the credit score differently than one another, and so your credit score will vary depending on which Bureau is reporting it. But they are likely to be in the "ballpark".
In computing your credit score the bureaus look at five basic factors in degrees that vary, roughly as such;
History of Payments 35%
Have you made timely payments on your bills?
Have you paid your bills late?
How late have they been?
How often have payments been late?
Have accounts been turned over for collection?
How many?
Has your car been repossessed for nonpayment?
Have you declared bankruptcy?
Present Level of Debt 30%
What is the total of all your present debts?
How Long is Your Credit History 15%
How many years have you carried debt? Lenders prefer to see a long history (of timely payments) instead of a short one
Types of Credit 10%
Most accounts are either "installment" accounts or "revolving" accounts.
Card and mortgage loans are installment loans. You pay at predetermined intervals and pay a set amount each payment.
With the revolving account you may pay more or less with each payment. Credit card accounts are of this class, but they often do require a minimum payment.
Lenders prefer to see a mix of both types.
Pursuit of New Credit 10%
Are there are many recent "inquiries" on your credit report (potential lenders buying your credit report)?
Lenders don't like to see a lot of recent inquiries. That could indicate the borrower is in jeopardy of overextending himself.
How does this impact me? back to top
Credit bureaus store credit reports on millions of Americans, so it's not surprising if there are a few mistakes. But unfortunately there are far more than just a few. In fact, it's estimated that anywhere from a third to an unbelievable 90% of all credit reports have mistakes.
Let's put it differently - at the very least there's a 1 out of 3 chance that there are mistakes in your credit report!
Considering how important your credit score is those are NOT very good odds - and that's looking at the LOWEST estimate!
Just how many mistakes would it take to hurt your credit score?
............ It only takes one............
Now one would think that when it comes to something as important as your credit ... something that has such a critical impact on your life, both personal and financial ... that the credit bureaus would avoid taking a slovenly attitude toward accurate reporting.
One would think "there ought to be a law" ...
Fortunately there is! The United States Congress passed one to address the problem ... the Fair Credit Reporting Act, or FCRA.
Under the FCRA everyone has the right to challenge the accuracy of information in their credit report. And when you contact one of the credit bureaus to dispute such information they have 30 days under the law to investigate. If during those 30 days they cannot or do not verify the accuracy of the information, they must delete it.
That's wonderful news for consumers. But there's a problem.
From the point of view of the credit bureaus the FCRA is a nuisance. There's absolutely no advantage for them. It just means lost time, money and productivity.
And because of that they find ways to make it harder for the consumer. The FCRA has a "loophole" that the credit bureaus know how to utilize, the "frivolous" issue. The credit bureaus are not required to investigate a dispute they deem "frivolous". And the worst part is that it's the bureaus themselves who initially decide if a dispute is frivolous.
Talk about putting the fox in charge of the henhouse!
As you can well imagine the bureaus are quick to label disputes as frivolous even if they are not. And although the consumer can always take them to court if they can afford to, most people lack the funds to hire the high priced lawyers the credit bureaus can ... especially those people who are paying exorbitant interest rates because of mistakes on their credit report!
What is your role in this? back to top
We know all about the "roadblocks" the credit bureaus use to confound people and obstruct their efforts to get inaccurate information deleted from theie credit report. Utilizing your rights under the Fair Credit Reporting Act we guide you in challenging the correctness of data on your report, to remove items that could be damaging your credit score.
We know how to deal with the credit bureaus and get results!!
But isn't it illegal to get help with your credit? back to top
Although the credit bureaus would like to discourage you from seeking help in challenging data on your credit report, don't ever let them convince you that it's in any way illegal to do so. It most assuredly is NOT!
Another trick they'll sometimes use is to reply to your dispute and try to convince you that utilizing help is a waste of your money and that all credit repair companies are scammers! And while it's true that some are, the bureaus' intention is NOT to help consumers ... it's to protect credit bureau profits by putting obstacles in the way of consumers!
Under the FCRA every consumer has the right to question - on his own - information on his credit report. But likewise, everyone also has the right to prepare his own tax return, and yet many people would rather hire an accountant to do their taxes, rather than try to navigate the complexities of the tax code.
By allowing an expert to take care of your credit you stand the best chance of raising your credit score ... and getting back the good credit you deserve!
How much can I expect my credit score to increase?back to top
Results are going to vary, but in most every case there is going to be major improvement.
And bear in mind!
In regard to your credit, ANY improvement will make a big difference in your personal and financial life ... impact in the form of more favorable interest rates, the ability to get loans when that ability was previously lacking, and less stress and mental turmoil.
Am I guaranteed results? back to top
Nobody can promise your credit score will improve ... at least no one who is the least bit honest. And no LEGITIMATE company will!
Every person's situation is different. But in most every case there will be major improvement to one's credit report and credit score ... improvement that will enable the client to get a mortgage, credit card, or car loan ... and at a far lower rate of interest.
Don't forget - depending on your situation just ONE single error on your credit report could mean a difference in your credit score - and in whether you'll be able to buy a home.
How much time will it take? back to top
That will depend on your personal situation. It took many years to form your current credit history, and it's just not realistic to expect perfect credit overnight.
Nevertheless, sometimes it takes just over a month to see major improvement. Other times it may take a few months. It can take a year or longer, but this is rarely the case.
But most of the time you're likely to see major improvement in your credit in 4 - 8 months time. |
