California Credit Report

Since it is pretty well established that having a good credit score can mean lower interest rates on loans, mortgages and credit cards, it is certainly worthwhile getting to know the truth about credit scores. Most people are misinformed about the effects that certain financial actions have on their credit score. Hopefully this will clear up some common misconceptions.

Cancelling Old Credit Cards - This can be a big mistake. An old credit card that is an long standing part of your credit history can actually have a positive effect on your credit score. The length of your credit history is one of the things tha will count to your advantage on your credit score, so having an old credit card helps rather than hinders. It can account for up to 15% of your score. If you really don’t want the card, then consider just putting it in a draw somewhere and forgetting about it. Cancelling it is not usually a good option.

Not Using Credit - A large part of your credit score revolves around how you deal with your existing loans and credit cards. If you don’t use credit at all, then it is difficult to build that credit history. Even if you try to use cash for everything, you should consider putting the occassional item on credit and paying it off so as to build your credit history.

Scrambling for Credit - One thing that has a negative impact on your credit score is applying for multiple cars or loans in a very short space fo time. This is often as sign of financial difficulties and can result in credit providers viewing your credit negatively. Try not to apply for too many cards at one time.

Giving False Information - Never, ever attempt to be misleading on loan or credit card applications. If you are caught (and it is easy to get caught) then this can really destroy your credit score and make it exceptionally difficult to get credit in the future. Be honest, act with integrity and it is possible to improve your score. Be deceiptful and you can destroy it all.

Allowing Debts to go Over a Month - A very big portion (35%) of your credit score is based on debts that you fail to repay within 30 days after the due date. If you are going to be late paying a bill, then make sure it doesn’t go longer than 30 days. You may even want to try calling your creditor to let them know that you are currently aware of teh debt and making arrangements to pay it.

Starting a Credit History Too Late - Having no credit history really isn’t that much better than having a bad credit history. Consider getting and using a credit card (responsibly) even if you don’t think you need it. Getting a credit card at a young age and training to pay it off every month can help establish a long and reliable credit history. Get started now and see the benefits when it comes time for you to start getting loans.

Not Knowing Your Credit Score - Keeping tabs on your credit score is easy, free and recommended. Creditors make mistakes and some of those mistakes make their way onto your credit score. By getting a copy of your credit report every year, you can take steps to correct those mistakes and also know where you credit score stands.

In general, there are two types of people who get into a debt problem that they have trouble getting out of. The poor who get into credit card and small loans problems and the middle class who leverage themselves into debt. Luckily there is a single strategy to use in both cases that can help either type of person get out of debt relatively easily. Read on to find out how this can help you too.

Many poorer people seem to find themseleves in a quagmire of debt that they find difficult to escape. Usually it is only three or four thousand dollars, but as payments on rent, credit cards and cars get missed it starts to pile up and people find themselves in some trouble. With credit cards, especially, the attraction of only making a minimum payment becomes too much. The high interest rates, however, mean that relatively small debts soon baloon out to larger debts requiring larger repayments. This debt spiral takes them into more and more debt that becomes harder and harder to get out of.

The first step of getting out of this kind of debt is education. Understanding the nature of different types of debt is the first key to recognising the pitfalls. For example, thinking that you can get away with only paying the minimum monthly balance of a credit card will usually land you in unmanageable debt - you’d be surprised how many people fall for it though.

The main strategy to get out of this type of debt though, is usually to refinance. What this means is that you take out another loan from the bank at a much lower rate of interest. You then use that loan to pay off all of your existing loans. This can often save people hundreds of dollars per month in outgoing loan repayments. Of course, you have to commit to not going into any further debt on cars, toys or credit cards, but this strategy can make you life a hell of a lot easier.

For the other group of people in the middle class, they are usually in a lot more debt to the tune of over fourty or fifty thousand dollars. This is usually brought about by high interest repayments on houses, luxury car repayments and also the costs of raising a family and putting kids through school and college etc. Even a couple of unpaid credit cards can start to eat into the cash flow of such a household.

Once again, refinancing can also help this group regain control of their debt payments. Often, just refinancing an asset such as a house or even a car can save hundreds of dollars per month. Another option for many mortgage holders is to take out a “Home Equity Line of Credit” which can reduce interest payments on expensive credit cards. The important part of this strategy is to pay off the higher interest debts as a matter of urgency.

The common thing about either of these scenarios is that most of the time, the person in debt doesn’t understand the nature of how they got themselves there. With a little bit of education about how to pay off bad debt and reduce expenses, people can generally get themselves out of bad situations much more easily than they think.

So you just got rejected for a loan. You’re feeling a bit lousy and wondering how you’re ever going to get to where you want to be in life financially. Whether you were lining up for a new house or just a credit card, the feeling of not being able to get credit when you need it is pretty awful. What a lot of people don’t realize is that they can repair their credit pretty quickly and get access to loans and credit cards that can help them get ahead. Here are some things you need to think about doing.

Firstly, you need to know what exactly is holding your credit score back. That isn’t really too difficult. You just need to get a hold of your credit report. Luckily, you can get your credit report for free as the government has legislated that the credit reporting companies must make your report available to you.  In fact the government sponsor the site over at www.AnnualCreditReport.com which will give you genuine free access to your credit reports.

Once you have your credit report in your hands, you need to organize it. First you need to make a list of the items on your credit report that are not 100% accurate. These are the easy kills. For each item that you regard as inaccurate or misleading, you need to write to the credit reporting company that listed the item and explain why you think that item was incorrect. Attach documentary proof if possible. That company is legally obliged to investigate the item that you raised. This can actually lead to the company removing that item from your credit report altogether.

This process needs to be repeated over time. Be sure to regularly check the state of your credit report and challenge any misleading items on it. By doing this simple task, your credit report and your overall credit score will continue to improve.

It’s not fast and it’s not sexy but it is very effective. If you need help with writing the letters or knowing which items to dispute then consider getting the help of a private company that specializes in credit report improvement (but remember to shop around and find out online what other people are saying about them).

So you’re in the quagmire of credit card debt and each month the debt is getting bigger and bigger. You probably have a couple of different credit cards that are all in the red and you are only ever making the minimum payments on them and sometimes you are missing the payments altogether. It’s having a negative bearing on your credit score but you don’t really know what to do. Here is what you need to do.

Ok, we’re going to assume that you have considered refinancing, but have decided against it for whatever reason. Let’s try to get this debt clear by using your current income. It’s going to mean tightening your belt, but that shouldn’t be a problem if you really want to get out of debt.

First thing is to sort your credit cards. You need to list them from the one with the least amount of debt to the one with the most.

Now, ideally, you will want to set aside 10% of your gross monthly income for this strategy. If you earn $2000 per month, you will want to set aside $200 in extra repayments.

When you make your next payment on your credit cards, pay off the minimum monthly payment for each one and then add the 10% to the credit card with the least debt. The idea is to clear the one with the least debt as quickly as possible.

Repeat that process each and every month until the credit card with the least debt is cleared. Then start doing the same for the next smallest debt.

Now if you cannot afford 10% of your gross income, then at least put an additional 10% of the minimum monthly payment on the credit card with the least debt.

Getting a momentum going is the important thing and you can certainly increase the payments you are making at a later time.

Now this obviously isn’t a magic bullet and you will need discipline and time to pay off your debts entirely.

The upside however is that you will be making regular payments on your current debts and showing that you can pay them off reliably. That can only help your credit score.

Did you know that your credit report is currently available to any company that asks for it? Did you also know that you have the power to put a “freeze” on your credit report so that nobody can access it? But there are a few things you should know before you decide to either freeze your report or continue to allow open access to it. Here’s what you need to know.

A credit freeze is also known by different names. Credit report freeze, credit report lock down, credit lock down or a credit lock are all referring to the same thing. It is basically an order that you give to the credit reporting companies (Experian, Equifax or TransUnion) that disallows them from giving information about your credit report to companies who ask for it.

Initally the laws that require this were done in response to identity theft victims who wanted to stop the ability of identity thieves from getting further credit and loans in their names. In general, that’s probably the only reason you will want to use it.

Putting a credit freeze on your credit report can make it very difficult to get credit. If a company who you have applied for credit with (think loans, credit cards, store cards, utilities companies) cannot get a copy of your credit report, they may very well not offer you the service you were looking for.

On the other hand, there are several reasons you might like to lock down your credit report anyway. If you already have access to all the credit you need including home loans, credit cards and utilities, then there may be some benefits to a credit freeze. For starters if you value your privacy more than your ability to get credit, then it is perhaps a good idea. If you want to limit your access to easy credit then you can freeze your credit report and allow only specific companies access to the information when you have applied for their services. This may help with people who find themselves unable to resist new credit cards!

If you do decide that putting a credit freeze on your credit report is a good idea, then here are the contact details you need for the credit reporting companies.

Remember there will be a small fee for implementing a credit freeze at each company.

Equifax - Credit Freeze Information
Mailing Address:
Equifax Security Freeze
P.O. Box 105788
Atlanta, Georgia 30348

Experian - Credit Freeze Information
Mailing Address:
Experian
P.O. Box 9554
Allen, TX 75013

Transunion - Credit Freeze Information
Mailing Address:
Trans Union
Fraud Victim Assistance Department
P.O. Box 6790
Fullerton, CA 92834

Unfortunately, the credit card industry has landed Americans in over a trillion dollsrs of debt and many in credit score hell. Many consumers find themselves in repayment difficulties and it’s largely through no fault of their own. The modus operandi of credit companies is quite predatory meaning that with credit cards especially it’s a case of buyer beware.

Credit card companies use various tricks and deceptions that you really need to be aware of before you start using their credit cards. Here are a couple that you need to look out for.

Obfuscation - Some credit card companies have contracts that are up to 30 pages long. This is completely unnecessary and is really just an attempt to confuse the customers and hide unfavourable conditions in a sea of legal jargon. If you cannot read and understand your contract in a reasonable time then do not sign it. Find another company.

Introductory Interest Rates - Many companies will bring new customers on board with great introductory interest rates. They will emnpasize the low intrest rate in their advertising (often with intentionally misleading wording that can lead the customer to believe that the rate is permanent). Unfortunatly, those interest rates will go up so many customers who have budgeted for repayments at a lower rate will suddenly find themselves subject to much higher repayments and consequent spiralling debt.

Changing Terms - Some companies reserve the right to change the terms of a contract at any time for any reason. No great need to explain how that can relly backfire on the consumer!

Shifting Due Dates - Some unethical companies actually shift due dates for repayments so that the consumer incurs late payment fees. Check the wording of your contract to make sure they cannot do this to you!

Interdependent Cards - Did you know that in some cases, a late payment on one credit card can lead to increased interest rates on another credit card?

Now, many politicians are aware of this and are attempting to take steps to help prevent some of these poor business practices by credit card companies. But this will take time. In the meantime the only realy defense is to carefully read the terms and conditions of any new credit card you apply for. Get good financial advice and make sure you only go with reputable credit companies.

Unfortunely for us, it’s buyer beware.

Unfortunately most people are planning and executing a strategy that will make them the slave of financial institutions for the rest of their lives and make keeping a good credit score much more difficult . For example, a great way to be a slave for the rest of your life, is to make the minimum payments on your credit card.

Let’s think about it for a second. Credit card statements have two prominent figures on them. The balance and the minimum required payment for the month. Make no mistake, credit card companies make these two figures promininent for a reason. The first is to let you know that you either have more credit to spend or need to apply for more credit and the second is to keep you indebted.

Let’s do the maths and see how paying the minimum monthly amount off your credit card can really screw you.

Let’s assume a credit card interest rate of 16% and a total credit card debt of $2000. A pretty standard monthly minimum payment would be around 1.7% of the balance.

If you continue to pay off the minimum monthly balance, you are only going to be eating into your debt by a little over $7 per month.

If you never ever put another item on that credit card and continue to pay off the minimum monthly balance, that credit card will take you just over 23 years to pay off!!

That is financial slavery.

That is also how credit card companies are making billion dollar profits and sending their customers to the cleaners.

If you feel you are nearing this situation or you have several loans or credit cards that you are having trouble with then you need to get a credit payment strategy happening as soon as possible.