Look for these on your credit report!

You probably already know that you should check your credit report at least once a year. But just why should you care about your credit report in the first place? Well, your credit report is the “snapshot” of your financial health that’s used by lenders, landlords, credit card companies, insurance agencies, cell phone companies and even future employers to judge your creditworthiness. 
Your credit report and your credit score is based on your credit history, and lenders use that to decide your ability to pay your bills or repay your debt.

So your credit history impacts a lot, which is why checking your credit report and making sure it’s accurate is so important. Understanding your credit report – what you owe and to whom – and making sure your report doesn’t have any errors will make sure that you’re as financially healthy as possible.
                     

When you do get your credit report, you’ll want to look through it to make sure that everything is accurate and there is no suspicious activity or accounts you don’t recognize. Here’s what to look for when you look through your credit report:

Information that’s not yours: If you have a common name, your credit history might have some information from someone else’s history. Make sure your name and address are accurate on your report.

Information from an ex-spouse: If you are divorced, your ex’s information may be mixed up with yours.

Accounts you don’t recognize: If there is an account on your credit report that you don’t recognize, it could mean that someone has used your personal identity to open up financial accounts in your name. This is also known as identity theft. Identity theft happens when someone steals your personal information and uses it for financial gain. A person might open a new credit card account or open a new bank account in your name if they someone got access to your full name, birth date and Social Security number. If bad checks are written or bills are not paid from these accounts, it will show up on your credit report.

Out-of-date information: You may have negative marks that are listed after the legal deadline for removing them from your report. Most negative marks can stay on your account for up to 7 years.

Wrong notes for closed accounts: An account that you closed yourself may look like a creditor closed the account. An account closed by a creditor can actually hurt your credit history, so make sure it’s reported correctly.

Non-delinquent accounts still appear as delinquent or more than one delinquent date is listed on your account: Credit reporting agencies may not have noted which delinquencies have been fixed. Similarly, it you have an account that’s in collections, your report might accidentally have more than one date for when your account became delinquent. Make sure there’s only one date listed.

If you do spot an error on your credit report, you have the right to dispute any inaccurate or incomplete information. You’ll need to contact both the credit bureau and the organization or company that provided that information. Both are responsible for correcting inaccurate or incomplete information in your report.

Learn more about identity theft, visit: www.cibilconsultants.com

Source: Secondary

They affect your credit score most.

You probably already know about the connection between your credit history and your credit report and how both impact your credit score. Remember that your credit score is like the grade on your credit report: companies use this number to rate your likelihood that you’ll repay your debts and pay your bills.

But just what are the factors that go into calculating your credit score? And which ones impact your score the most?

Here’s the breakdown of what affects your credit score, from the highest impact to the least:

Your payment history : Whether you pay your bills on time and if you always pay at least the minimum amount. Even one late payment can impact your credit history.

                      

The amounts you owe : Some percent of your credit score is determined by the amounts you owe, which is made up of two parts: the total amount of money you owe all your lenders and the percentage of available credit that you’re using (like hitting the limit on your credit card). People who are using less of their available credit are considered lower risk than people who are using a lot.

The length of your credit history : The amount of time you’ve been using credit makes up fifteen percent of your credit score. Someone who has been using credit for a long time is considered less of a risk.

New credit you open or try to open : Some percent of your credit score is also based on the amount of new credit you’ve applied for recently. Every time you apply for a loan, credit cards, store cards and even a cell phone, someone will run your credit. Someone who applies for a lot of credit in a short amount of time is seen as a credit risk.

Types of credit : The types of credit you have impact about ten percent of your credit score. People with a mix of credit types, like credit cards, an auto loan, and a mortgage may have a slightly higher score than those with only one type.

So, now you know what makes up your credit score, which is your overall “credit grade.” Your credit report, on the other hand, gives you all the details about each account and shows you everything from how much money you owe, how many accounts you have, how many accounts are in good or bad standing, and how many times a lender or another company has checked on your credit history. Since, your payment history make up 35 percent of your credit score, you’ll want to pay attention to two places on your credit report: potentially negative items (accounts unpaid or past due) and your status and payment history.

Even if you do have a few negative marks on your credit report, the good news is that on-time and regular payments can help boost your credit score. It may take a little time and patience, but paying your bills consistently can help boost your credit.

Source: Secondary

Divorce can affect your credit score!

In many marriages, one spouse pays little to no attention to the household finances. But if the marriage is coming to an end, both spouses need to be concerned because divorce can have a substantial impact on both of their credit ratings.

The act of divorce itself doesn’t impact your credit. But divorce is rife with financial issues, and the division of assets and debts can have a huge impact on the credit history of both you and your spouse.

Perhaps the main impact of divorce on credit involves joint accounts. A divorce decree will spell out who is responsible for which accounts, but it will not actually remove one spouse or the other as an account holder. Thus, it is still up to you or your former spouse to remove the name of the person who is no longer responsible. The person who is no longer responsible for the account should ensure that his or her name is removed, particularly from any jointly held debts, so that he or she will not be liable in the event the other spouse fails to make the required payments. Failure to ensure the removal of your name from such accounts can negatively impact your credit for a long time, even if your spouse’s actions occur years after the divorce is settled.
                               

Your liability for debts incurred during your marriage may depend on the law in the state where you reside. In community property states, such as California, the law presumes that you and your spouse are entitled to half of what the other earned during the marriage, and are responsible for half of the debts incurred. However, in equitable distribution states, the law requires that assets and liabilities be distributed equitably and fairly between both spouses.

During divorce proceedings, while your name is still attached to jointly held debts, you should ensure that timely minimum payments are made toward each debt, in order to protect your credit history. Even if your spouse has historically made those payments during your marriage, he or she may not continue to do so during the divorce. If the divorce decree provides that your former spouse is required to make payments on accounts held in your name, you should monitor the activity on the account closely to ensure that the payments are made, since the lender will still hold you responsible and it will be your credit that is impacted by any failure to make timely payments.

Another area that is significantly impacted by divorce is each spouse’s income. What is affordable when two spouses’ incomes are pooled is often not affordable when the same amount of income must support two separate households. This may be particularly true when children are involved and one spouse keeps the family residence, with the same mortgage amount and living expenses, while the other spouse must acquire and maintain a new, separate residence. You will need to ensure that you can manage to pay all necessary expenses subsequent to the divorce, or you may find yourself falling behind on payments and that will negatively affect your credit.

Your good credit may be extra important in the event of a divorce, since it will be the sole basis on which lenders will decide whether to grant you a car loan or mortgage. Prospective landlords may consider your credit history in determining whether to lease you a new home. Therefore, it is extremely important that you do what you can to protect your credit during your divorce.

Source: Secondary

Your Credit Score and Your Car Loan

If you’re in the market for a new car, you probably have a couple numbers on your mind: the mileage, the price of the car and the monthly payment.

But the one number you may not not be thinking about that could seriously impact how much you pay for your new ride? Your credit score.

Unless you’re paying for a car with straight-up cash, you’ll like have to shop around for a car loan. And your credit score will impact what kind of rate you can get on your auto loan – or even whether you’ll qualify for a loan at all.

                        

Just how does your credit score impact your auto loan? Like other loans and lines of credit, a good (or great) credit score means you’re more likely to qualify for a good (or great) interest rate on your loan. The better your credit score, the better your interest rate and the less money you’ll pay over the life of your car loan.

On the other hand, if you have not-so-good credit, you may be stuck with a higher interest rate and pay thousands of dollars more over the life of your auto loan.

And if you have really poor credit, you may not qualify for a car loan at all.

But while good credit is important for securing a good rate on an auto, even a good credit score doesn’t necessarily guarantee the best interest rate on the market. If you’re thinking of getting an auto loan through your dealer, the dealer may not offer you a preferred interest rate (they tend to make money by charging higher-than-normal interest rates). So regardless of your credit score, it’s always smart to shop around for rates on auto loans before you head into the dealership.

Since, your credit score is such an important piece of the overall cost of your car, it’s good to know what kind of number you’re dealing with before you head out to buy a car. Before you start to shopping around for the car of your dreams or start the process of negotiating rates on an auto loan, check your credit score and your credit history. You’ll have a much better sense of the types of interest rates you’ll qualify for and a better estimate of the overall cost of the car.

If you think that your credit score may be too low to qualify for a decent car loan, talk to your local bank or credit union about their auto loan options. You may be more likely to qualify for an auto loan at a financial institution where you already have a relationship, since your bank or credit union will likely consider other factors besides your credit score in your car loan application process.

Finally, if possible, consider waiting to buy a car until you can boost your credit score or save up money to make a larger down payment – both of which will not only help you qualify for a better car loan, but will save you more money in the long-run, too.

Source: Secondary

No Problem, if you have no credit score!

Seems like you need credit for everything: buying a house, getting a loan, and even renting an apartment. Your credit score is your magic number to unlocking a lot in your financial life. But if you’ve never had a line of credit to your name or you barely have any credit history, you may be struggling to think of where you fit into the credit history equation.

If you don’t have any credit history, you have two options: start building credit history or go off the grid and try to avoid needing credit in the first place. We’ll cover how to accomplish the first point – which is arguably a lot easier than the second choice, though not impossible.

So, just how do you go about building your credit history? Here are a few simple steps to building solid credit:
                       

• Double check to make sure that you do or don’t have any credit history. You’d be surprised what may or may not be in your credit history, even if you don’t think you have any credit to your name or you’ve never checked your credit before. Before assuming that you’re starting with a blank slate, you’ll want to check your credit report. That will show you if you have any lines of credit that have been opened under your name. If there are any accounts you don’t recognize, your name might have been used to open up an account without your knowledge (or it could be that one account you opened years ago that you forgot about…).
• Ask your bank about a secured credit card. A secured credit card is an easy way to start building credit through your bank or credit union. They’re kind of like a mix between a debit card and a credit card, since you’ll need to make a security deposit first and then you’ll receive a credit limit that’s usually equal to the deposit you made. But unlike a debit card, activity on your secured credit card will be reported to the credit reporting bureaus, helping you build credit history.
• Once you have momentum, open a second line of credit. Once you’ve got some positive credit history with a secured credit card, you’ll want to open a different line of credit to help build your score and mix things up. Different types of credit besides just a card can help boost your credit score, so consider taking out a smaller loan or opening up another account.
• Use your credit responsibly. Once your start building credit, you’ll want to make sure that you use it responsibly. The worst thing you could do is damage your newly established credit history! Late payments, even on small things like your utility bills, can end screw up your credit history in the long run.

So that’s the basics of credit building. But if that’s not your style, you may choose,

Go off the grid. If you don’t want to play the credit score game, it can be really difficult but not impossible to live with a super low score or no credit score at all. Instead of using a credit card or taking out traditional loans, you’ll probably have to resort to using debit cards and borrowing from friends, family or other alternative lending sources.

Source: Secondary

Credit highly impact your mortgage

If you’re in the market for a mortgage or looking to refinance your home, you’re probably already tracking the mortgage industry and the rising interest rates we’re seeing in the housing market. Over the last year, mortgage interest rates have climbed more than a percentage point. While increasing interest rates could signal an improving economy and a rebounding housing market, it also means a more expensive home for home buyers.

Here’s what you need to know about the mortgage rules and your credit history, and some simple ways to improve your chances of landing a mortgage:

• Your outstanding debt and what you earn has a bigger impact on your mortgage. Thanks to the Ability to Repay Rule, lenders will be looking more closely at two things: your income and your outstanding debt, including credit card balances, student debt and car loans. You debt-to-income ratio – or what you owe versus what you earn each month – is going to have a bigger impact over the type of mortgage and the mortgage terms you qualify for. There are a few ways to improve your debt-to-income ratio: 1) increase your repayment amounts for any outstanding debts, 2) avoid taking on any significant, new debt during the mortgage application process, and 3) consider earning money on the side or asking your employer for a raise to help boost your income.                                                                  
• Paying off your smaller debts could boost your credit history and your mortgage application. Since lenders now have to document and verify all of your income and debts under the Ability to Repay Rule, your finances will be even more under the microscope – and you’ll likely have to wade through a longer application process. To help shepherd along your application and to increase your chances of qualifying for favorable mortgage terms, you should begin to focus on paying off your smaller debts. If you have a lingering credit card balance or you only have a few hundred left on your student loans, focus on paying off those smaller debts in the short term. The less outstanding debt you have in multiple accounts, the more favorable your mortgage application will look.
• Your overall credit still matters a lot – if not more. The Qualified Mortgages Rule means that lenders are not allowed to push consumers into a higher interest loan just to earn a commission. From the consumer protection point of view, this rule is a winner. But it also means that loan officers will be forced to make smarter loans and will therefore be looking for more qualified lenders. So while your credit history and credit score still mattered significantly in the past, it matters even more now as loan officers will want to be absolutely sure you can repay your debt.

Source: Secondary

When did you last check your credit report?

One of the most important aspects of your finances is your credit. Your credit score is an interpretation of the information in your credit report. Keeping on top of your credit report is vital if you want a good credit score.

With so much riding on your credit, it makes sense to check your credit report monthly so that you can keep tabs on your situation.

                                    

Are You an Identity Fraud Victim?

You probably understand the importance of checking your credit report to see where you stand before you apply for credit. After all, you don’t want an unpleasant surprise when you apply for a mortgage! However, even if you don’t plan to apply for a loan in the near future, it still makes sense to check your credit report.

By keeping tabs on your report, you can quickly identify cases of identity fraud. Your credit report can provide you with a big identity theft red flag: “Has a new creditor appeared on your report for an account you know you didn’t open?”

When you see a new loan, in your name, might be an indication that your identity has been stolen. With so much publicity surrounding data security breaches at major retailers , it’s especially important for you to check your credit report to see where you stand.

You can spread out your reports so that you get one from each bureau every four months. 

The faster you catch this identity fraud, the faster you can fix the problem and restore your good financial reputation.

What About Mistakes?

Sometimes, it’s not a matter of fraud when information is wrong on your report.Checking your credit report is important not just to identify possible identity theft, but also to make sure that the information in your credit report is accurate. Companies use your credit report to determine credit worthiness for a loan and whether you will be eligible for purchasing insurance in some states.

And that’s not all, some employers also review credit reports when making hiring decisions. Negative mistakes on your credit report can cause you to appear less responsible than you are, and could cost you the job.

So, credit report mistakes can result in higher interest rates on loans, and in higher insurance premiums, as well as affect your ability to get a better-paying job in some cases. Over a lifetime, mistakes on your credit report can cost you thousands of dollars — and they might even cost you a job.

Are You on the Hook for Someone Else’s Debt?

Another good reason to check your credit report regularly, is when you are on the hook for someone else’s debt. If you have joint or cosigned debts, you should check your report frequently.

Many married couples apply for debt jointly. This means that your credit accounts are in both your names. It’s important to check your credit report if your spouse is in charge of making payments, just to be sure that it’s actually happening, since your credit rating is impacted by the status of your joint your loan.

It becomes especially important to keep up with payment history if you are divorced. Your shared debts are usually divided. This means your ex might be in charge of making payments on your joint credit account. If he or she doesn’t meet the obligation, it reflects on you. Regardless of your divorce decree, you are on that bill.  Creditors don’t care about your divorce.

Whenever possible, try to get your name off the debt when the divorce goes through. If this isn’t an option, check your credit report regularly to keep tabs on the situation.

This is also a requirement if you have cosigned on someone else’s loan. When you cosign, you accept responsibility — even though the other person is making payments. Check your credit report to see whether or not that debt is being paid on time. If it’s not, you will need to take steps to prevent it from destroying your credit. This isn’t just about divorce. This applies to accounts with children, parents, friends, or anyone you’ve entered a loan with, or cosigned for.

Your credit report can provide you with advance warning that something isn’t right with your financial image. 
Check it regularly, fixing mistakes, identifying fraud, and intervening when it looks like your joint or cosigned debt isn’t being paid as agreed.

To learn more about identity theft, visit www.cibilconsultants.com
Source: Secondary