Archive for July 20th, 2010
What Is a FICO Credit Score
Tuesday, July 20th, 2010FICO and the FICO Credit Score is almost the only term used anymore when it comes to credit scores and anything related to your financial numbers. The company, Fair Isaac Co, was founded in 1956 by Bill Fair and Earl Isaac to determine and predict risk for financial institutions. They thought that based on past performance, a prediction could be made in future transactions. Sometimes this works, but many times it does not.
If you believe that your credit score is a reflection of you, perhaps of the type of person you are, you’d better think again.
Millions of Americans have low credit scores and millions use subprime credit cards. Their bad credit, usually considered to be below 600, is only an indication of the risk they pose to lenders. This risk is based on past use and performance of their financial life.
Credit scores do not take into consideration the type of person you are. Likewise, it makes no difference what your gender may be. Height, weight, income and marital status make no difference when calculating your FICO Credit Score.
What matters is how much credit you have, the type of credit you have and how you pay your bills. There are other factors, but these three categories are the main criteria for determining what your score will be.
What type of credit do you have?
Department stores, and auto loans plus a mortgage are all acceptable types of credit. The problem lenders are the high risk types, like Payday loans. American General and other high interest rate lenders will cause your scores to go down too. Stay away from jewelry store financing. Furniture is another type of financing that will cause your credit scores to go down.
How do you pay your bills?
Believe it or not there are people who will wait till the last minute to pay their credit card bills. They do this with the attitude that the lender is going to have to wait till the bill is actually due. I’ve even heard it muttered that they’re not getting my money sooner than the due date. If you are one of these people, I have bad news for you.
Credit card debt is calculated with interest due on the remaining balance on a daily basis. Everyday you owe money you are paying interest. Also, your balance is changing-going up, so why wait to pay your bills? If you have the money, pay early. And besides, it is not your money. You borrowed it. Remember?
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About the Author:
Do you understand your FICO credit score? Are you looking for lower interest loans. Why pay an outside company when you can clean up your own credit reports? With online software, like AVAIL, whic has just become available to consumers, you do not need a credit repair service to write a series of dispute letters for you. In fact, AVAIL writes a dispute letter automatically. All you do is print and sign. Don’t be misled that credit repair is a huge mystery because it isn’t. For a very small fee, you can be online in a secure server. You will be able to see what lenders see and you will be able to make fast and important decisions about your credit reports.
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How do credit cards get cloned?
Tuesday, July 20th, 2010How safe is your credit card? Plastic cash that lets you buy almost everything by just swiping the card can also turn out to be your worst nightmare.
This is not an isolated incident. With the use of the credit and debit cards on the rise, their misappropriation has become a major worry for one and all. Credit card users in India have been robbed of crores of rupees due to card-cloning over the years.
Intl bank cards frauds have also raised taking advantages of the loopholes in the system. In many cases, Indians have used details from foreign credits cards to swipe away millions.
The offenders often get away as laws are not very stringent in India for such acts of crime. The maximum punishment would be imprisonment for up to three years.
How do credit cards get cloned?
Credit card-cloning, or skimming, is a method, by which someone obtains your credit card details, copies them onto a bogus card and begins using the credit card.
Waiters, shop assistants, courier boys and even MBA graduates have been arrested in the past for stealing vital information, making clone cards and spending cr of rupees.
How is cloning done?
A device with a scanning slot can be easily procured from the shops, or even ordered online. The fraudsters swipe customers’ credit cards discreetly through the device that comes with software that can store information from about 3,000 cards.
It just takes a few seconds to swipe the card and transfer the card details into this device. This information can be then be copied on to expired, blank or stolen cards to make a clone of the original card.
Such China-made data readers are priced between Rs 30,000 and Rs 50,000.
What kind of details will the fraudster get?
The magnetic strip gives the credit card number, name on the credit card and the expiry date. However, the name and address of the person is not revealed.
Click for More info on Credit Card Cloning
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About the Author:
Working with a WRS Info India Pvt Ltd.
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Prepaid Credit Cards: Control your credit card spending
Tuesday, July 20th, 2010Prepaid credit cards have been available for over ten years but people did not recognize them. These cards came in spotlight when people started falling in debt traps due to credit cards. Lenders offered plastic money to each and everyone person without noticing their financial capability. As a result, people spent money to get luxurious goods and services; they did not use it wisely. Now, people have understood that this plastic money is meant to use for emergency purposes. These credit cards are saving account cash which individual can use for any purpose with the help of plastic card.
Consumers are not allowed to spend more than the amount deposited into the account. It saves you from liabilities. One good thing of these cards is that lenders do not run credit check while offering the card. It means, bad credit holders can also enjoy the benefits of plastic money if they got cash in saving account. There is no APR charge on these cards because customers use only their money to make transaction. It is not credit at all. Users do not need to worry about later payments or late payment fees; banks deduct the amount on the spot from the account as you make purchase.
People can also withdraw the cash from any ATM machine available in market without paying any interest or charges. This is the best option for credit card holders who miss their credit cards. According to experts, this card option makes you more responsible because you start spending the money according to the available cash. Prepaid credit cards also offer rewards point and other incentive options. They are easy to use and not risky at all.
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About the Author:
Borton Stevens is an expert author and has more then 7 years of experience in writing finance related topics. To know more about Prepaid Credit Cards Visit: http://www.instantcreditcards.org.uk/
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Prepaid Card Market Grows Fast as Government Squeezes Credit Card Industry
Tuesday, July 20th, 2010The Squeeze on Credit
A major new law affecting credit card use in America was the Credit Card Act of 2009. Credit card companies lobbied against provisions in the law the felt would hurt their profits. The Act law makes it tougher for anyone under 21 to get a first credit card without a cosigner. The law prevents banks from increasing credit card interest payments without a good reason other than profit taking. As the Great Recession pushed unemployment over the10% mark (and much higher in some states), people cut back on their spending. Historically high foreclosures also played a role. And credit card spending dropped. Credit is not popular, and hence alternatives like prepaid cards are more attractive.
Prepaid Cards
Roughly six percent of consumers have used a prepaid card in the last six months and about 9% have used one in the last year says “The Survey of Consumer Payment Choice,” Federal Reserve Bank of Boston (Jan.). This Survey also reveals that 80 percent of consumers currently own some sort of debit card, while 78 percent own a credit card. And of the credit cardholders, 17 percent own a prepaid card.
According to the Federal Reserves, debit card use surpassed credit card use in America by 2006. At that point there were over 25 billion debit card transactions annually compared with nearly 22 billion credit card transactions. Transaction volume reached $2 trillion for credit cards versus $1 trillion for debit cards. Both forms of electronic payments grew, yet debit card use grew three times faster over recent years.
The average per transaction amount for debit cards is half that for credit cards today. This difference can attributed to the fact that the only limit for spending on a credit card is the credit limit of a borrower, while a debit card user cannot spend more money than is loaded onto a prepaid card or resides in a checking accounted tied to a debit card.
Consumers today embrace all forms of electronic payments for convenience, ease of use, and cost effectiveness. They are paying bills online, getting cash back at stores, and are using debit cards to buy things at bricks-and-mortar and online stores, at restaurants, and at gas stations.
Debit Card Use Grows
Global Industry Analysts report that online purchases are fueling this trend towards online payments. The report indicates that by 2012 there will be more than 5 billion debit cards in circulation. Fraud is shifting from the traditional schemes like check kiting, the report says, to more sophisticated schemes such as hacking into financial database stealing identity information.
One way to combat fraud is to use a PIN number when making a debit card transaction. This is done with a PIN reader machine at the point of sale, and a card thief would have to have your PIN number in order to complete the sale this way. So don’t write down your PIN number and keep it with your card but rather memorize it. And don’t use one as simple as 1234. Merchants prefer PIN transactions because the processing charge (interchange rate) has been historically less than credit cards. The new Credit Card act limits the interchange banks can charge for debit transactions. This is a good thing for consumers.
So, if you haven’t thought about the value of debit cards, maybe it is time to consider your buying habits and make the switch away from credit.
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About the Author:
David Pratt works for MiCash Inc., a prepaid debit MasterCard company in Georgetown.
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Crazy Credit Repair Collection Facts
Tuesday, July 20th, 2010Many Collections are Not Valid
Many people in credit repair programs face some level of collection activity. Between phone calls, dunning letters, and the often cryptic list of debts that appear on credit reports, it can be problematic to identify legitimate debts and determine the best course of action.
A Unique Breed of Collector
There is a unique breed of collector that specializes in buying and dunning ancient collection accounts; debts over seven years old. These accounts are unattractive to first level collectors as they are beyond the statute of limitation for enforcing through the courts. They are also beyond the credit bureau reporting period limit.
Profiting From Ignorance
Of interest to anyone in a credit repair program, the age of the debt means that legal action can be neutralized by the statute of limitation defense, and any threat of reporting to the credit bureaus is not valid. The lack of legal leverage does not stop these collectors from vigorously practicing their craft. In fact, these last-chance collectors represent the most profitable part of the collection industry!
Credit Repair Education Pays
What is their secret? They prey on consumers who do not know their rights. If you are contacted by a collector about an ancient debt, just examine the statute of limitation, check out the reporting period limit, and send the collector a cease communication letter. They will go away forever. There are many great credit repair resources online. A little education goes a long way!
Another Common Quirk
While a bit of credit repair education can arm you with the knowledge you need to vanquish these collectors of ancient debt, there is another type of collection account that can be eliminated quickly with a dispute letter, if you know what to look for…
Compliance Failures
A significant percentage of all collections on credit reports fall into a very special category. These accounts are everywhere. Left alone they can linger for years, in some cases decades. They have the power to depress the credit scores of their unfortunate victims, often dramatically. And they should not be reporting.
Failure to Vacate
Collectors buy and sell debt. Over the last decade this practice has become commonplace, and much more frequent. Many collectors will sell an account in as little as six months if it does not pay. When an account is sold the collector is supposed to vacate all credit bureau reporting. Sadly, this often does not happen. And yet a little credit repair could eliminate the offending account completely.
The Credit Repair Solution
If you have collections on your credit report, it is fairly certain that you are a victim of this type of defunct account. Credit repair is the answer. The first and most obvious indication is the presence of more than one collection account for the same debt. If you examine your credit report and find several collections for the same debt, all but one is erroneous. And the last one may be too!
The Value of Vigilance
Given the speed at which collectors churn their portfolio these days. It is quite feasible that even the most recent collection on your report is in error. Once you remove all of the duplicates, examine the last, most recent, account. It may be legitimate, but if the reporting date is over six months, or if you have been contacted by a different collector since the reporting date, it may be a candidate for credit repair as well. Good luck!
Copyright © 2010 James W. Kemish. All Content. All Rights Reserved.
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About the Author:
Jim Kemish is the president and founder of Sky Blue Credit Repair, a leading credit repair service. Sky Blue Credit has been dedicated to providing intelligent customized credit solutions since 1989.
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Misconceptions Regarding the Fair Isaacs Credit Ratings
Tuesday, July 20th, 2010Even children so young they don’t yet understand the very notion of consumer credit can probably sing a jingle or two underlining just how vital scrutiny of all three credit bureaus must be. There’s a sadly excellent chance that one or more of the agencies’ reports will contain at least one substantial error that will be the fault of either lender or credit bureau. If, for instance, the agencies fail to erase a discharge or past lien after the statute of limitations has legally passed – the formal duration of credit bureau monitoring will change with both the specific nature of the debt and the state or county in which the borrower resides – that old debt alone could be the cause of FICO scores bottoming out by forty or sixty points, which would remove many borrowers from serious contention for apartment rentals, new vehicles, or even an increasing number of employment positions.
Recognizing the potential for inaccurate data within credit reports to subsequently skew the numerical calculations of FICO Beacon scores, significant debts such as home equity mortgages will as a matter of industry practice always pull the credit rating from each one of the bureaus and only utilize the middle score – that is, immediately throw away the highest and lowest scores – for determining eligibility requirements. While we should all applaud this uncharacteristically responsible and forward thinking tenet of the famously reckless mortgage industry, consumers should also take note to go through with a fine tooth comb any one FICO score noticeably below the others. There’s bound to be some disparity between credit bureaus taking into account all of the pages and pages of transactions recorded, but a rough equivalence should be presumed.
Should discrepancies pop up when going through the credit report documents, you will want to immediately take measures to force the guilty bureau to make amends and correct the erroneous information. Do not, however, be misled by the companies that claim to specialize in FICO score restoration. While experience in credit repair has its rewards – and it would be silly to disregard the influence of an attorney at law for cutting through the first level of bureaucracy shielding the three bureaus – it’s at the same time especially hard to justify the expense of employing commercial firms for such endeavors now that the Federal Trade Commission has shown such interest and effectively corralled the credit reporting agencies into lightening quick responsiveness.
Governmental bylaws have definitively placed the burden of proof at the doorstep of the lenders, and the credit card debt companies have only four weeks to submit formal paperwork that vouchsafes their complaints or else all mention of a charge off or similar negative marks will be forever discarded. Despite their impressive letterhead and dizzying spiel and well appointed offices – and, more to the point, the price tag which affords their lavish lifestyles – attorneys can’t do anything more than Joe Six Pack armed with copies of the family credit, a personal computer connected to the internet, and a few hours of concerted effort. If you’ve already begun working with a debt relief professional such as a settlement negotiation counselor, you’d be careless not to pick the consumer finance specialists’ brains about how best to white wash the credit reports. Under only the most unusual circumstances, though, should you spend one additional cent on the proceedings.
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About the Author:
For more information and help with debt relief please visit http://www.totaldebtrelief.net/
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Credit Card Bad Debt Relief Grant Money
Tuesday, July 20th, 2010Credit Card Bad Debt Relief Grant Money - Debt Relief Grant – A New Beginning to Life
A person usually finds himself in a pool of debt due to unemployment, some personal prohibitive or unit undesirable situation in his life. He seeks many ways to eliminate his dues. There is no necromancy stick to eliminate the your financial burden; the fellow has to put his circumstance besides efforts in overcoming his problem. Visit here now http://onecreditcardgrantmoney.blogspot.com
Debt consolidators green you money to lick goodbye to your burden. The non profit debt helping hand companies also aid you out of financial crunch.
Suitable For All
The fiscal sell has provided ways to consolidate your unsettled amount. Now, debt reinforcement is succulent available drag the tout to remove your financial problem. There are:
Debt consolidation loan
Debt consolidation mortgage
Debt consolidation remortgage
Consolidation procedure has to act for properly reviewed before stunning sincere forward.Negotiations acting a exceptionally finance role in this process. The company acts as facilitators again helps you foreign of your problem, by approaching the lenders with your situation.
Their ambition is to work for your benefit and negotiate to the principal nib possible. The monthly outflow is made significantly lower and this really gives a lot of breathing space. existing adds to your profession level and a positive aspect on life.It is finance to analyze, where and how you accumulated your dues and how did this brought you to the plight of bankruptcy. If this pool of digit is relevant to your spending habits, you cede postulate to find ways of repairing your position. duck purchasing made thence easy and bloated on credit, it is possible that you will score up buying many items, you may not really require. Before you sign the charge slip for credit, pause a moment to admit whether:
The item you are buying is really required –Would you have bought it against cash, even if credit were not available to you?
Debt Consolidators
A consolidation caravan offers their service at subordinate impinge and easy terms and conditions.There are many such companies and you need to scrape together one shot according to your convenience. There are basically two practices they adopt. You importance opt for a service that provides basically a loan that let’s you recover all your previous loans and pay now the single debt. The interest rates are usually very high in this event. The other type is where the company pays all your existing loans and you have to pay for the peculiar loan of that company. significance this case, the regard rates are lower also manageable.
Credit Card Bad Debt Relief Grant Money - Debt Relief Grant – A New Beginning to Life.
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Credit Card Bad Debt Relief Grant Money - Debt Relief Grant .
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How to Use Statutes of Limitation for Credit Repair
Tuesday, July 20th, 2010The Power of Statutes of Limitation
Statutes of limitation (SOL) pertain to open collection accounts on your credit report. Knowledge of SOLs can make or break your credit repair project. Take the time to research the SOL for each collection account and you be able to choose the most intelligent and effective course of action.
Using the Knowledge
Armed with knowledge of your SOL you will know when and how to contact a collector and how much, if anything, you should offer them. You will know the risks, or lack thereof, of disputing these accounts as part of your credit repair program.
Risks of Ignorance
Conversely, acting blindly, without information about the SOL can lead to disastrous consequences such as lawsuits, and harassment. Many people jump into the dispute process believing there is no harm in sending letters to the credit bureaus challenging everything and anything. This is a mistake.
SOL and Potential Lawsuits
Employing credit repair to challenge collections is fine, as long as you understand the SOL. An SOL for a debt is the length of time following an original default date that a collector can enforce collection through the court system. In other words, it is the amount of time they are permitted to sue you.
Suing After the SOL
For the sake of completeness, I should mention that collectors regularly sue debtors after expiration of the SOL, hoping that the debtor will not know their rights or be afraid to show up at court. Either way, unless a debtor raises the SOL defense a collector can still convert a collection into a judgment, at which point the original SOL is irrelevant.
Your Homework
SOLs are easily found on the web. You will need to locate the SOL for your state and for the specific debt type. Have you moved since entering into the debt? You need to double check your position relative the collector; they have some flexibility in choosing which state SOL to apply, your state of residence, or the state of original contract.
Which State to Use
For credit card debt, collectors use the SOL for the state of residence. For written contracts, like car loans and mortgages, collectors get to pick the state of contract or residence, whichever works best for them.
Judgments and SOL
If you have a judgment and are curious about SOLs, the situation is different; the SOL for the original debt no longer applies. You need to find a SOL judgment chart for the state where the judgment was granted. And since judgments can be renewed, they may even live beyond the initial SOL. Tread lightly.
Credit Repair Options
Once you have your SOL, your credit repair options are simple. If the SOL has not expired, plan your approach very carefully. Collectors are trained to be aggressive, and if they still have legal leverage they may become unpleasant. Several of the large collectors treat dispute letters as a trigger to launch a lawsuit.
You Are in Charge
But if the collector can no longer sue you, and you know it, and you let them know that you know, you are in charge, they should be willing to settle for a tiny percentage of the original debt. If they play hardball you can hang up on them and there is nothing further they can do.
Getting Your Offer Across
In fact, if they remain aggressive, you can send them a cease communication letter and they are not allowed to contact you again. If your offer is not accepted, try sending a cease communication letter, and then follow up with your offer a week or two later. It may be helpful to know that as collectors earn commissions offers made towards the end of a month are often accepted more readily.
Copyright © 2010 James W. Kemish. All Content. All Rights Reserved.
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About the Author:
Jim Kemish is the president and founder of Sky Blue Credit Repair, a leading credit repair service. Sky Blue Credit has been dedicated to providing intelligent customized credit solutions since 1989. Jim is a graduate of New York University and holds a degree in economics.
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Types of Credit
Tuesday, July 20th, 2010
Taking charge of your credit starts with understanding the four different types of credit, how they work, and how they affect your credit score. Establishing an educated position on different types of credit will enable you to make smart financial decisions and aid in deciding what steps you can take to improve credit. The better the credit score, the better the financing rates when purchasing a new home or automobile.
Utility credit is one of the most common types of credit. Electric, gas, and phone companies issue a line of credit to consumers. Utilities are not paid in advance. The service, or energy, used is tallied and due after it has been used. Because of this system most utility companies require a deposit when establishing an account. They also charge late fees and can report late or unpaid accounts to the credit bureau. What they do not do is report your positive payment history. So you basically get no kudos for paying your utilities on time but will be stricken with a negative mark if not paid in accordance with the terms.
If you have a mortgaged home or a student loan you’re probably familiar with loan credit. An application qualification process begins the steps to obtaining a loan. Banks and lenders have strict guidelines to ensure the loans they approve can be paid and will not default. Obviously this isn’t the case in every instance but remains to be the foundation in establishing lines of credit. A good credit score can greatly increase your chances for being approved for a line of credit. The better your credit rating the better the interest on the line of credit. Timely payments are usually reported to the credit bureau to help improve credit. Missed or late payments over 30 days are reported negative and can cripple your good standing very quickly.
If you have ever purchased a car or major appliance and made small monthly payments towards the total balance you have utilized installment credit. The interest or finance charges for this kind of credit are built into your monthly payments. Paying the debt timely will improve your credit score over time. Payment history accounts for 35% of your credit score. It’s the largest factor in the credit score formula.
Basic plastic lands in last place. Credit cards enable consumers to spend money they do not have and offer payback plans with minimal payment requirements and high interest and finance charges. Like other types of credit, rates vary based on the consumer’s credit history. Penalties and fees come in many forms and fashions and can be applied without notice. Late payments are reported to the credit bureau, dropping your credit score dramatically. Your score goes down a lot faster than it goes up. Missing payments is the most common reason scores drop. Spending more than 30% of the available credit will also impact your credit negatively and lower your credit rating. That means if you are approved for a Visa card with an available credit line of $5000 spending more than $1500 of that $5k will drop your score. High interest rates and small payment requirements create a payment cycle that maintains a good credit rating but never pays back the debt.
You can pull your credit report once a year to see what types of credit you have and how they are affecting your credit rating. Its always a good idea to run your credit at least once a year to make sure there aren’t any fraudulent charges and that you have not become a victim of identity theft. Websites like annualcreditreport.com provide free credit reports for consumers once yearly. A certified credit counselor working with a nonprofit organization will provide a free financial analysis and credit report review to consumers who want a professional and definitive review of their credit report and financial portfolio.
Visit our website freedomdm.org and live chat with a credit counselor or complete the contact request form for your free financial analysis and credit report review. Call 800.905.1563 and speak to a professional today about your specific situation and financial goals. Non profit counseling services can eliminate debt and improve credit. You can be debt free, Freedom Debt Management can help.
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About the Author:
Credit counselors work with consumers to assess their financial situation and determine what their best option may be.
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Free Credit Report – What This able of to Repair Credit
Tuesday, July 20th, 2010Increasingly more people want to make sure that they’re making use of all their options as they repair credit. If you are into repairing your credit, you may want to look into a free credit report option to guarantee that you get access to the fine print of your credit.
It is essential to know very well what makes up your credit. If you want to backtrack on certain transactions which you have done in the past, be sure that you don’t have to settle for any possible disputes. That is why it is critical to ask for a free credit report so you can get yourself updated from your credit bureaus probably even once a year. Or, if it is possible for you to request for this regularly, getting access to such reports on quarterly basis will be best.
when you are to repair credit, you need to know what made you spend this much. As you get access to your credit report, you are going to be capable to track if there were possible subscriptions still appearing on your report although you have already opted it out. Or there are possibilities that you may have a delinquent account as a subscriber, through the report you’ll be able to get access to such information and if there are potential disputes, then you will have to call the agency to settle the needed payment for the delinquent account.
For repairing your credit, you will be needing your credit report in searching for some employment opportunities as among the finest solutions in earning extra money. You will have to comply with this as well since employers check out several criterions in hiring an applicant. More often they’d also be looking at your credit score and that will make you want to repair your credit at the soonest time possible.
Obtaining a free credit report will truly assist you to check your credit obligations, either if these are commodities that you have bought and subscribed to which has to be paid instantly, or for the purpose of error resolution, to look for possible disputes which has to do with your recent purchases. Through acquiring a copy of your report, you will have the ability to build a plan on what you will have to do to resolve your issue with repairing your credit.
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About the Author:
How to go about repairing your credit rating – Credit Report Com was started to provide useful information and links to tools to assist people in understanding there credit report, and the impact this has when applying for finance. Credit Report Com is not affilated with any particular credit reporting service or agent. You should ensure you seek your own legal and financial advice before taking any action in relation to information provided on this site. Click here to learn How to get your free credit report and more
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