Most credit monitoring services issue alerts when there is a new inquiry on your credit report.   This can be helpful to catch a potential fraud activity if you get an alert that Sears just had an inquiry for your credit when you know you have not applied for credit at Sears. 

However, credit monitoring does NOT do anything about existing errors on credit reports.  If there was a fraudulent account on your credit file and you sign up for credit monitoring and never look at your full credit reports, the fraud could continue until who-knows-when.  Additionally, some credit monitoring services only check one or two of the three major credit bureaus.  To do true monitoring, you want a service that covers all three bureaus as not every financial company pulls your credit (creating an inquiry) from all three bureaus.  If you’re only monitoring one bureau, and fraudulent accounts are being opened at companies that check one of the other two bureaus’ reports, you won’t know about it.

WHAT TO DO
> Check your own credit reports regularly.  You can do this at no cost.   See #10 on this Identity Theft Prevention list.  Do this BEFORE signing up for monitoring services and continue to do so regularly throughout the year.  Each consumer in America gets at least three no-cost reports each year.  You can check one of them every four months for continuous credit monitoring.

> When reviewing your credit report, look for unknown accounts; unusual or incorrect balances on your existing accounts; inquiries that you don’t recognize; and extra social security numbers or names that don’t belong to you.  Contact all three credit bureaus to correct the errors, even if you only review one of your reports.  By law, they must investigate the items you dispute and reply within 45 days.

> Read the fine print in any credit monitoring agreement before you sign up, including their cancellation policy and process.  The Identity Theft Resource Center has a great information sheet on this topic.

> Remember that most lenders in the U.S. use FICO scores for their credit and loan approval process.   Some monitoring services include a ‘credit score’ with your service.  If it is not a FICO score, it is not an apples-to-apples comparison to what a lender will be looking at. 

Yes, we’re all busy these days.  And we want fewer things to keep track of and worry about.  This is a friendly reminder against complacency.  Signing up for a monitoring service means you have a TOOL to assist you in your credit building and protection efforts.  Stay on top of it by staying tuned into it.

You can get a Credit Check-Up that gives you an analysis of your current credit situation as well as strategies to build your credit for only $100.  Contact us today to order yours.

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Having a credit card with a $1000 limit and carrying a $200 balance would give a utilization ratio of 20%: 200 divided by 1000.   Balances under 30% of the credit limit are optimal.  When the account balance is over 50%, half, of the credit limit, scores usually go down.  The closer an account gets to being at 100%, maxed out, the more severe the impact on credit scores.

Now, what is important is to keep the revolving accounts active so that they stay reported as OPEN on your credit file.  Yahoo Finance recently addressed this in an article on their front page May 5, 2010.  The article said that companies often close credit card accounts that are inactive for an extended period of time.  When these accounts get closed, the consumer’s overall available credit is reduced and this can have a negative impact on credit scores.

WHAT TO DO
Keep all revolving accounts active by using them regularly; we recommend doing this every three months.  Consider making a small purchase of something you were going to by anyway such as a tank of gas in your vehicle.  Use the credit card for the fuel, pay the bill in full when it arrives the following month, lock the credit card up until the next usage.  This will keep the account active and reported as open on your credit file.  This article has more information on keeping credit cards active to build credit.

NOTE: this recommendation is only for accounts that do not currently have a balance.  The monthly payment on accounts with balances keeps them active.

Keep in mind that revolving accounts include major credit cards such as Visa, MasterCard and Discover; retail store accounts such as Home Depot, Best Buy and Dillards, gasoline/fuel cards, and some lines of credit.

You can get step-by-step instructions on how and when to use each of your accounts with your Personal Credit Building Plan.  This Plan is part of the Credit Analysis we offer for only $100 and will tell you what each account balance should be for optimal credit growth.  Contact us today to get yours.

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When you go to purchase a cell phone and sign up for a contract, the company is most likely going to check your credit before they give it to you.  When they ask for your full name, birth date and social security number, it’s probably for a credit check.  Then they either approve or deny your request for service with them.

Every time you authorize any company to check your credit, you will get a Hard Inquiry on your credit report.  This will count against your scores, whether you get approved or not. 

Most utility companies, including cell phone companies, do not pay to ’subscribe’ to the credit bureaus, so they do not do a monthly report to the bureaus for all of their customers.  So the cell phone bill you pay each month does not show up on your credit file.

NOTE:  If you stop paying your cell phone bill or cancel the service while you are still under contract with them, they will probably send your account to a collection agency and THEN it will most likely show up on your credit report.  And any collection item on your credit is negative and will hurt your scores.

WHAT TO DO
Limit the number of times you apply for credit.  This includes saying okay to the checkout clerk that asks if you want to save 10 or 15% today by applying for their store card.  Just Say No.

Always pay all of your bills on time.  Payment History is the number one factor in FICO scores.

If you cancel your cell phone service, and they say there will not be any other charges, GET IT IN WRITING!  You must have some protection for yourself other than “somebody from your company told me that it would be okay”.

Check your credit report regularly to make sure there are no errors or surprise negative items showing up.  You can get them at no cost here.  You actually get three per year – one from each of the credit bureaus.

You can contact us to order your credit check up for only $100.  We’ll do a thorough review of your report and give you information on how to positively impact all five parts of your credit scores. 

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We’ve written many times about the difference between FICO scores and FAKO scores – the ones that the credit bureaus advertise a lot that are not an equal comparison to the score that a lender sees.  So when your actual FICO scores are on sale, we want to make sure you know about it.

They usually cost about $16 each and until March 31st, they are only $11 and change!  Not only do you get your TransUnion and Equifax FICO score, you also get your TransUnion and Equifax credit reports.  AND purchasing these reports and scores does NOT count against your scores because it is a Soft Inquiry.  You can read more about Inquiries here.

When you go to the MyFICO site, click on the top left tab that says ‘FICO Scores and Credit Reports’, then click on the Buy Now tab to the right of FICO Standard.  You will be asked to create an account to get your reports and scores.  Before checkout, it asks for a discount code; put in MyFICOis9 to save 30% off the regular price.

A FICO sale is a great opportunity to monitor your credit to check for errors and signs of identity theft.  When you find an error on one of your reports, send in correction requests to all three credit bureaus.  This article has tips on how to dispute inaccurate items on your credit. 

Remember that our credit consulting services are available to anyone in the U.S. or Canada.  We can provide your Credit Check-up using your latest FICO credit report with a complete analysis and your personal credit building plan starting at only $100.  Contact us today to get yours.

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We hear from many people who are experiencing reduced credit limits on their credit accounts, even though they have been good, long-standing customers with a stellar payment history.  This will likely continue as the financial industry and the credit card companies look for ways to reduce their risk for loss.

Some people are receiving notification that their credit card account is being close due to inactivity.  This happens if the account has not been used in a while; the credit card company might decide to close it rather than risk the customer using all of the available credit and then being unable to repay it.

WHAT TO DO
Use your credit accounts as credit building tools.  Keep your revolving accounts: major credit cards, retail store and gasoline accounts, active by using them once every three months, IF they do not currently have a balance on them.

NOTE: This does not mean that you should go out and charge big ticket items and use up your credit card limit.

HOW TO DO IT
Use your card for a small purchase of something you were going to buy anyway, perhaps a tank of gas or a pair of pants.  When the credit card bill comes the following month, pay it in full early, before the due date.  This should keep it reported as active and open on your credit reports where it will be included in your Utilization Ratio.  BONUS: You won’t pay any finance charges or interest fees by paying the account in full before the due date.

MAKE A DATE

Mark your calendar or planner to schedule regular use of the cards as CREDIT BUILDING TOOLS.  Remember, this strategy is only to help grow your scores, NOT to increase your credit card debt.  By keeping your credit accounts active, they remain open on your credit file, helping your credit scores grow.

You can get more details on this and other credit building strategies, specifically tailored to your accounts, with your Credit Check Up.

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A Consumer Statement is something that can be added to a person’s credit report, by them.  It is about the only thing a person can add to their own report.  Everything else on there comes from companies that pay the credit bureaus as a “subscriber”, allowing them to put their customers’ account information on the credit bureau reports, and it also comes from public records searches that the credit bureaus initiate themselves.

The Fair Credit Reporting Act (FCRA) states “…that the consumer has the right to add a statement to the consumer’s file disputing the accuracy or completement of the information;”.  The credit bureaus will gladly insert this and it does indeed show up on your credit report.

However, it is NOT included in the credit scoring formula.  It has nothing to do with your credit scores.  It will not help your credit rating at all.  It may even stay on your credit report long after the item that the statement is about is gone from the report.

Most lenders check credit reports for minimum score qualifications, then they may look for items that their own company considers a “red flag” in the lending process.  Rarely do they actually look over the entire credit report, let alone see the words of explanation in the Consumer Statement. 

WHAT TO DO
Don’t bother with a Consumer Statement on your credit report.  As logical, reasonable people, we want to explain the valid circumstances for something that may be on our credit report.  The credit bureaus are not logical, reasonable people.  Remember, they make money whether your information is accurate or not, whether there were legitimate reasons that caused something, and whether or not you try to explain it.

If you know something in your credit file is not correct, keep trying to get it corrected.  You can contact the original company for documentation, request validation from  collection agencies related to the account, and check your own records for paperwork to support your claim. 

Be sure to send in some new documents or reasons when you contact the credit bureaus so that they do not determine that your dispute is “frivolous”, which gives them a reason to stop investigating the matter and leave it as it is. Yes, this is really written into the FCRA, conveniently providing an out for the credit reporting agencies. 

Learn how to positively impact your credit scores.  There are five parts to the FICO score.  Our Credit Check-Up provides our clients with a complete analysis of their current credit report and effective strategies they can use to help their credit scores grow.  Contact us today to get yours.

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Click here, go to FICO Standard on the right side under My FICO Products.  Choose BUY NOW, then Continue.  You will create an account if you are new to the site and within minutes, you’ll have your two credit reports and FICO scores.  You’ll be able to log in and view them for the next 30 days. 

If you have questions on your reports and want a professional analysis of what you can do to grow and protect your credit, contact us today for your Credit Check-Up.

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We’ve seen several occasions over the years where a change-of-life event can leave one spouse without a credit history and facing challenges with financial institutions and other companies.  Often senior citizens have a traditional relationship with the husband being the breadwinner and main financial support for the family and the wife being a stay-home mom or part time employee out of the house. 

According to Scott Forgues, Financial Advisor with Carlin Financial in Tucson, Arizona, the topic of both spouses having established credit ratings is being included in financial planning discussions with clients.  With the increasing importance of credit scores in today’s society, it makes sense for older couples to cover their financial security and money issues with pre-planning and take steps to assure that both spouses have established a good credit history.

WHAT TO DO
1) Review both spouse’s credit reports.  You can do this at no cost on the internet or through the mail.  You can also get reports with actual FICO scores to check your own credit rating.  Click here for details on both of these.

2) If one spouse does not have a credit file at all three of the credit bureaus, they should consider building their good credit.

3) If there are joint accounts, such as mortgage or auto loans, be sure that they are reporting on both parties’ credit reports.  If not, contact the lender or financial institution to request that they report the joint account to the credit bureaus for both of you.

4) The person wanting to build their credit can open a credit card account to be used ONLY as a credit building tool – NOT to carry a balance and go into debt with.  Ask at the bank where you have your checking and savings accounts; they may be more accommodating to a customer with an existing good relationship.  You can also consider opening a secured credit card, ask your bank if they offer them. 

When you have the new credit card account, use it ONLY for a small purchase of something you need to buy anyway, such as a tank of gas or a pair of socks.  Then pay the bill in full when you receive it the next month.  Put the card away in a locked, safe place and don’t use it again for three months.  Do the same thing in three months: a small purchase of something, pay it off in full, store the card in a safe place for another three months.  Continue this way to build up a good credit history that can be included in the credit scoring formula.

5) The spouse with the established credit can add the other spouse to one or two of their revolving accounts as an Authorized User (AU).  The person who has the account needs to contact the company that issued the credit card and request that their spouse be added as an AU.  They will need full name, date of birth, and Social Security number of the person to be added to the account.  This is NOT the same as adding an “additional card holder” to the account.

NOTE:  The Authorized User is not financially responsible for the account.  However, if the account becomes delinquent or goes into collections, it will be reflected on both parties’ credit reports.

Because of some instances of misuse of the Authorized User strategy for credit building, the FICO scoring formula was changed and newer versions do not include AU accounts in the credit score.  However, most lenders are still using older versions of the FICO score that do include AU accounts.   More information can be found here.

6) Check your credit reports and scores again in six months to see if there is now a credit score for the spouse who previously had the “thin file”.

You can get a Credit Check-Up for only $100 with us to see exactly where you are now and obtain effective credit building strategies for your financial future.  Contact us today for more information.

The second largest part of the FICO score, accounting for 30% of it, is the “Amounts Owed” category.   Revolving accounts, such as credit cards, retail store accounts and fuel cards, fall into this category.  When your balance owed on the account is over 50% (half) of the credit limit, credit scores typically go down.  As the account gets closer to being maxed out, which is a balance near 100% of the credit limit, scores can be severely impacted.  Account balances of less than 25% of the credit limit are best to build good credit. 

EXAMPLE: A credit card with a $1000 credit limit should have a balance less than $250 to have a positive impact on credit scores.

The challenge many consumers are facing, Ms. Miller said, is that if they use their savings to pay down the credit cards, they may not have enough money left for the required down payment amount on their home loan. 

WHAT TO DO

If and when possible, pay down your credit card balances to under half of the credit limit for that account.  Then work toward getting them down to under 25% of the credit limit.  And do not close them when they are paid off!  They are an important part of a successful credit building plan when used as credit building tools.  Find out how to use your accounts to your credit advantage with your Credit Analysis from Complete Credit Services.

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Simply click here and get the code at the right side of the page.   Then go to FICO Standard under the orange MyFICO Products on the right side to get your Equifax and TransUnion complete credit report and your actual FICO score for about $12 each. 

Remember, FICO scores are the ones most lenders use and spending your money on any other type of score does not give you an equal comparison to what your lender is going to see.

If you want your third credit report, we recommend going to www.annualcreditreport.com to get the no-cost report you are entitled to each year.  At this time, consumers cannot get an Experian FICO score so you may want to save your money.  Earlier this year, Experian pulled out of their agreement with MyFICO to provide consumer access to their Experian FICO score.  So, you can save 25% on two of your three scores and have a good picture of where your credit rating is at this time.

Be sure to go over your reports carefully to look for errors or inaccuracies that may have a detrimental affect on your credit rating.  This article has credit report dispute tips for your reference.

When you are ready for your professional Credit Check-Up, contact us.  For as little as $100, you’ll receive information on what you can do to improve all five parts of your credit score based on your personal credit report.  A little credit education can go a long way toward helping you reach your financial goals.

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