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USEFUL CREDIT INFO
The key to your success with the ApprovalGUARD™ service is based on learning about credit and receiving credit coaching so you can effectively build, manage, and optimize your credit. Better credit often means better loan programs and lower interest rates. Check out a few of the many articles and tips that are available to you with the ApprovalGUARD BASIC Service:
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+ 20 Years Old and Building Credit?
Paying More For Not Having Credit - Consumers who do not have credit are typically higher credit risks than those who do have established credit. Because of this, financial institutions will tend to only offer new credit candidates products and services that are designed for higher risk customers. These products usually carry higher interest rates, lower credit limits, higher deposits, and overall poorer treatment from the lenders. It´s not that they don´t want your business; they just want your business under terms that are heavily in their favor. It´s their way of testing the waters and risks associated with extending credit to you.
How do I get credit if I don´t have it? - Financial institutions process a consumer credit application though automated processing systems. Consumers who do not have a credit history are also not going to have a credit score. Some creditors just choose to decline credit applications without credit instead of taking the time to manually evaluate your application. When manually evaluating credit on someone with no credit they will place a lot of value on your job and home. They may ask for utility bills or other proof that shows you can manage your payments. In other cases, they offer you a very small line of credit at very high, double-digit interest rates...
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+ Building a Great Credit History
When You Apply For Credit:
- Print clearly when applying for credit. If your application information is entered wrong it can create variations of reported information on your credit report.
- Consistently use your complete name without any variations. Providing complete, accurate and consistent identification on your credit applications helps set up your credit history correctly from the beginning. It also minimizes the chance that your credit file will be incomplete or mixed with another consumer's file.
- Don´t apply every time you see an offer. TOO much credit too quick can be bad...
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+ Credit and Identity Fraud Prevention
Credit and identity fraud prevention - Credit and identity fraud have run rampant worldwide. Once your identity or credit has been used for fraudulent purposes, it typically takes hundreds of personal hours over the course for two or three years to completely correct it. Unfortunately, credit and I.D. theft can be very difficult to "unwind" if you don´t address it before the new fraudulently created accounts go to collection or are charged off. Every responsible adult needs to check his or her credit report at least once every 90 days to ensure that they catch any fraudulent or erroneous items before than have an opportunity to go to collection. As long as you catch items while they are still with the original lender, even if they are 30 or 60 days late, it usually takes no more than a phone call to have the fraudulent items removed and any charges reversed. That is why checking your credit report once a year is not good enough; if fraudulently created accounts have time to become delinquent, get charged off, and/or go to collections, it can be a nightmare to deal with the outside collection agencies that rarely seem to care whether you actually owe the money or not. Commonly, if a collection agency removes an item from a person´s credit report, it often sells blocks of accounts to other collection agencies later; and the process will start all over again ...
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+ Understanding How to Educate Children
Starting Young - Young children can learn valuable money management lessons through their interaction and activities with parents. If you are a parent, use daily errand activities like going to the supermarket or bank to teach kids lessons about budgeting and money, give your children toy money and encourage them to "play store" with their friends and even with you, and/or consider having them "pay" for rent, food, and other things with toy money for a week so. Let them learn on their own at first, and then go back and help them create a budget plan
Managing an Allowance - A weekly allowance is a good way to teach children about using budgeting and spending responsibly. Most children should have duties to perform around the house. Show your children how those duties will be converted into an allowance. Pick an amount that is reasonable and give it to them in small denominations such as $1 bills and $5 bills. Pay them weekly on the same day so they can see a return for their efforts. Encourage children to save a portion of their allowance each week by calculating how much they could save in a month or a year. Opening a savings account for older children will educate them about making deposits and withdrawals. Many banks offer FREE accounts for children.
Wanting it or Needing it - Explain the difference between wants and needs to children. A brand new video game may seem like a need to a child, but it is not. Encouraging children to earn and save for something they really want is a smart way to teach them about healthy spending habits and delayed gratification. Help your child keep track of their savings with a chart OR an extra checking account register. Consider offering some type of matching funds for saving money, such as for every ten dollars they save, you will add two more...
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+ Credit Report Warning Signs
Suspicious Data - Not sure where that credit card came from? Do you have inquires from companies you never applied with? Unauthorized account or address changes could be one of the first signs that a thief is using your identity. If you find a credit card or loan that you don't remember opening, call the creditor immediately to investigate. If it turns out to be a case of identity theft, have the account closed and follow the fraud resolution procedures available from your ApprovalGUARD credit coach. Time is of the essence.
Maxed-Out Credit Cards - High balances on credit cards are common, but that extra debt could be bringing your credit score down significantly. Reducing your balances to below 35% of your credit limits can save you hundreds and, over time, thousands of dollars.
Late Payments - Paying your credit card bills late not only costs you a fee; it also may damage your credit. If you have had trouble making your payments on time lately, evaluate what is causing the problem. Ask your creditor to move your due date to a different time of the month or sign up for online bill payment service that can be programmed to remind you before the due date. Speak with your ApprovalGUARD credit coach about different options that will help to optimize your personal credit and debt management...
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+ Different Credit Reports - Different Scores
There are three major credit reporting agencies in the United States; TransUnion™, Equifax™, and Experian™. Each one has its own unique way of calculating a credit score for the consumer, which is a number that helps to represent a quick overall summary of the credit risks associated with the consumer. Each agency may have slightly different information that can seem confusing; although learning about your credit reports become easier with the ApprovalGUARD service. It will provide you with credit tips, articles, four credit reports per year, and a LIVE credit coach who can guide you on your way to building new credit OR optimizing and managing your current credit.
So why are the reports different from one another? In fact, the average person´s credit score varies as much as 40 points between the three credit reporting agencies. When you apply for a loan or credit card, your credit score can be a key factor in getting approved or not, and will also influence the type of interest rate and line of credit you qualify for. The worse off your credit score is; the more likely you will receive a higher interest rate and/or smaller line of credit.
Credit scores can also vary a bit due to differences in the credit scoring formulas each reporting agency uses. There are thousands of distinct credit scoring formulas used by creditors, lenders, and insurers to evaluate your creditworthiness. These scores may evaluate your credit report differently in order to match specific guidelines for its intended use, such as a credit card, insurance, apartment lease, home loan, and so on. Don't be surprised if your credit score from a creditor or lender is slightly different than the credit scores you view on your report. The basic range and score categories should be the same even if the exact number is not...
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+ Doing a Credit Check-Up
Check the Facts - The first step in getting a clear picture of your credit profile is to pre-review your credit report when it arrives from ApprovalGUARD. Your first report will be from all three of the major credit bureaus, including TransUnion™, Equifax™, and Experian™. Look close at the data and compare it for notable inconsistencies. Watch for red flags such as: wrong mailing addresses, incorrect social security numbers, old employers showing as current employers, signs of identity theft, errors in your credit accounts, late payments, and unauthorized inquiries.
Inaccuracies - If you find inaccurate information on your credit report, discuss it with your ApprovalGUARD credit coach. In most cases, he or she will recommend contacting the involved creditor or sending a letter of dispute to the credit bureaus to have inaccuracies on your credit report corrected. The credit bureaus have 30 days to investigate your claim and make any appropriate corrections. Your ApprovalGUARD credit coach can provide you with sample letters and the correct addresses.
Building a Good Credit History - Your ApprovalGUARD credit coach will assist you in understanding your credit report and identifying potential problem areas on it. He or she may identify solutions for you to consider that may help you plan and better manage those accounts and behaviors. If you've had a hard time paying your bills on time, sign up for an automated payment service. If your debt levels are above 35% of your available limit, create a payment plan to reduce your balances. Set goals for managing your credit, and be sure to celebrate when you reach a milestone. Your ApprovalGUARD credit coach will be sending you an updated credit report approximately every 90 days, so it will be easy to track the changes you choose to implement regarding your credit...
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+ 5 Basic Steps to Help Manage Credit
- Avoid Excessive Inquiries - Every time you apply for a loan or provide your social security number for credit it´s likely your credit report may be pulled. This is called a credit INQUIRY. A large number of inquiries occurred over a short period of time may be interpreted as a sign that you are opening numerous credit accounts due to financial difficulties or overextending yourself by taking on more debt than you can easily repay. Apply for new credit in moderation. Your ApprovalGUARD credit coach will help you identify where inquires are on your report and how to best manage them.
- Be Punctual - Pay all your bills on time each month. Late payments, collections, and bankruptcies have the greatest negative effect on your credit scores and can take years to clear up. In today´s marketplace this can mean double digit interest rates on cars and even homes if you can qualify at all.
- Get Regular Credit Report Check-Ups - Don´t let your credit health suffer due to inaccurate information. If you find an inaccuracy on your credit report, contact the creditor associated with the account or the credit reporting agencies to correct it immediately. The ApprovalGUARD service will provide you with four credit reports per year, and your ApprovalGUARD credit coach will assist you with how to take care of this type of situation...
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+ How Credit Reporting Works
Your Credit Report - Your credit report is divided into six main sections: your personal information (address, birthday, and employment), consumer notes and statement, account histories, public records, inquiries, and creditor contact information. When you open a new account, miss a payment or move, these sections are updated with new information. Old negative records will stay on your credit report for 7 to 10 years. Positive records can remain on your credit report longer. Not all creditors report to all three agencies; the agencies obtain their data independently so your reports from TransUnion, Equifax, and Experian could be substantially different from each other. That is why it's important to check your three credit reports every 6 to 12 months to ensure that the information is accurate and up-to-date. Your subscription to ApprovalGUARD will provide you with a 3-in-1 credit report every 12 months and three additional reports each year from a rotating single bureau report. This gives you four (4) reports per year and a personal ApprovalGUARD credit coach who will review them with you.
Correcting Inaccuracies - Under the Fair Credit Reporting Act, consumers are protected from having inaccurate information on their credit reports. If you find an inaccurate record on your report, try contacting the creditor or lender associated with the inaccuracy first. These companies can usually correct the mistake and send an update to the credit reporting agencies within 30 days or less. If you can't make progress this way, you can also dispute the inaccuracy directly with the credit reporting agencies. Your ApprovalGUARD coach will be glad to show how this is handled, and provide you with guidance if needed...
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+ How Credit Scores Work
History - The credit scoring system became prevalent during the 1980s as a way for lenders to quickly evaluate a potential borrower´s creditworthiness. This came about in an effort to streamline an easy quick way to evaluate a consumer´s credit. The system was found to accurately predict financial risk over time and grew to several different industries. Now credit scoring is used by lenders, insurers, landlords, employers, utility companies and even judges to evaluate your credit behavior.
The Formula - Thousands of different credit scoring formulas exist today for various evaluation purposes. Each unique credit scoring formula is accurate and correct for its own application. The credit scores you can order online use a mathematical formula created for consumers that approximates these different formulas. Your online credit scores may vary a bit from the score your lender uses, but they should be in the same range and represent the same level of creditworthiness...
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+ How Does Credit Impact Me?
Apartments & Leases - Your credit report is often pulled by a landlord or rental agency as part of the evaluation process - to see if you qualify. During the review, they will most often look for major negatives on your credit report that show you may not be a responsible tenant. They will also verify that the name, address, and employer on your report match what you put on your application. You could be denied an apartment OR required to pay higher rent if you have a lack of credit or poorly managed credit. You could also be forced to put down a larger deposit or use a co-signer because of information on your credit report. When a credit report is pulled by any creditor, your report has what´s called an "inquiry" added to it. Too many inquires can hurt your credit, however Inquiries from rental applications do not damage your credit score. With the ApprovalGUARD service, your credit coach will help you understand how your credit works, and then guide you on ways you can establish your credit or optimize your current credit to qualify for the best deals when applying for an apartment.
Auto Loans - Your credit report and the score on the report commonly impacts if you can get an auto loan and what interest rates may be available to you. Most auto lenders do not fully review your credit report and financial history; instead, they rely on your score and some basic application data. If you have a high credit score (750+), you will receive the best loan deals available (sometimes as low as 0%). However, even people with major credit issues can usually be approved for an auto loan, though at very high rates. The best auto loan rates are granted from online lenders and credit unions, not auto dealerships. It is a good idea to limit the number of loans you apply for; this is because multiple inquiries from auto loan applications can lower your credit score. Your ApprovalGUARD coach can help you with ways to manage your credit in preparation for an auto purchase.
Cell Phones - Cell phone companies will check your credit score before deciding to grant you a service plan. People with credit issues may be asked to put down a large down payment or pay extra for a service contract, but there are cell phone services available that do not require a credit check, such as pre-paid cell phone cards. Some contracts include terminology that allows the company to review your credit at any point. Be aware, however, that a cell phone application inquiry will appear on your credit report and can lower your credit score...
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+ Learning About Your Credit Report
Personal information section:
The personal information section of your credit report lists some basic information about you, but is not used to calculate your credit score. This section will typically include your name along with any other names you may use, your date of birth, current address, previous address, and employer information. It will also include the date when this information was reported to the credit reporting agencies.
The data in this section is often used to verify your identity or to confirm that the information you provided for an application is accurate. Minor variations in this data between the three bureaus are normal as each agency may have their own recording procedures.
This section may also include a "consumer statement." This is a statement that you asked the credit reporting agencies to add to your report. Commonly, this statement is used to explain a record on your report. For example, "The National 1st Bank account from 2008 was my son's account and I am only a co-signer." This statement does not impact your credit score, rather it may help clarify a situation to a potential creditor or lender who is reviewing your credit...
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+ Managing Credit and Identity Fraud
Filing a Report:
You may need a copy of a police, or other official, report showing you have filed for credit and/or identity fraud. Below are the applicable reporting agencies to consider.
- Local police - Alert the police in your city and make a request to file a crime report. Make sure the police report lists all fraudulent accounts. Give as much documented information as possible, and receive a copy of the report so that you can send it to the creditors and the credit reporting agencies as proof of the crime. Keep the phone number of your police investigator handy.
- Federal Trade Commission - (877) 438-4338 www.ftc.gov/bcp/edu/microsites/idtheft/. While federal investigators only tend to pursue larger, more sophisticated fraud cases, they do monitor identity theft crimes of all levels in the hopes of discovering patterns and breaking up larger rings. Request an ID Theft Affidavit, and consider making a copy to send along with other correspondence to all affected creditors.
- SSN Fraud - Notify the Office of the Inspector General (OIG) if your social security number (SSN) has been fraudulently used...
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+ Quickly Reading a Credit Report
So you have a credit report and it makes no sense at all? Tons of numbers, abbreviations and terms you've never seen before -- how do you read this thing?
First off, there are three major credit reporting agencies in the United States: Experian™, TransUnion™ and Equifax™. Information showing on each agency report is based on what your creditors report to the agency. Some creditors do not report to all three agencies, so it´s not uncommon to have slightly different information on each report. As a consumer, there is only so much you will be able to do with your credit report because of the complexities and nuances of the credit scoring system. Most importantly, you should be checking to make sure that all of the accounts shown are your own and that there are no major errors in the information being reported. During future communications, we will start to educate you about specific items and situations to look for and how you can mange that information to your favor. For now, here are the basics...
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+ Mistaken Beliefs About Credit
Closing Old Accounts is Good - Many people believe canceling/closing old and inactive accounts is a means of managing their credit. But they should think twice before closing the oldest accounts on their credit report. Canceling old credit accounts can lower a credit score by making the credit history appear shorter; however, if you want to reduce your levels of available credit, consider storing a credit card where you cannot easily access it or cutting up the cards you don´t intend to use.
Paying Off a Negative Record Will Remove it From Your Credit - Negative records, such as collection accounts, bankruptcies, and late payments, will remain on your credit report for seven to 10 years. Paying off the account before the end of the set term doesn´t remove it from your credit report, but will cause the account to be marked as "paid." It is still a good idea to pay your debts, just be aware that the major change in your report will come when the negative records expire. If you are about to pay off an old "charged off" account, it may be a good idea to contact a couple of debt settlement experts to see if one of them can attempt to negotiate a "paid satisfactory" reporting status in exchange for paying off the item. Oftentimes, these experts can negotiate a partial settlement account and the favorable reporting status you desire.
Co-signing For an Account Doesn´t Make You Responsible For It - When you open a joint account or co-sign on a loan, credit card or other credit account, you are taking on full legal responsibility. Your credit and capability to acquire credit will be affected. If the party you co-signed for does not pay their bill it will be just like you didn´t pay it. Any activity on these shared accounts, good or bad, will show up on both party´s credit report. If you co-sign for a friend´s auto loan and he or she doesn´t make the payments, your credit profile will be equally hurt by their actions. The only way to stop this double reporting is to pay the loan off or refinance the debt without you as a co-signer. In general, you should think twice before you co-sign for anyone. If you do decide to co-sign, consider keeping it restricted to responsible family members, require that they confirm all payments to ensure they were made and keep copies of their cancelled checks as a paper trail to show you aren´t paying the debt. This is important if you ever need a mortgage, and you don´t want the payments counted against your debt-to-income ratios...
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+ Tips for Building Your Credit History
Revolving Credit - Most credit cards are a form of revolving credit. This simply means you are given a maximum credit limit and you can make charges against that limit. If you carry a balance, you must typically make payments each month that will include an interest rate charge. Types of revolving credit may include VISA and MasterCard or department store cards, such as Target, Sears or JCPenney.
Services - Your agreements with service providers are all credit arrangements. You receive goods (natural gas, electricity) or services (apartment rental, cellular phone use, health club memberships) with the agreement that you will pay for them each month just as you would with any other form of credit. Your accounts with services providers and the associated payment history are appearing more commonly on credit reports. Unpaid bills are almost always reported when the account is turned over to a collection agency.
Installment Credit - Car loans and mortgages are two examples of installment credit; it is among the most common and easily understood. A creditor loans you a specific sum of money and you agree to repay the money and interest in regular installments of a fixed amount over a set period of time, usually measured in months or years...
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+ What is a Credit Score?
What Makes Up Your Credit Score - The answer to that question varies somewhat based on which credit score you are talking about; yet because your FICO score is by far and away the most prominent credit score in your life, let´s look at what makes up your FICO score. The first 35% of your score is based on your payment history which most people mistakenly think is all, or the majority, of their credit score. The next 30% of your FICO score is calculated based on your "amounts owed." A full 15% of your FICO score is based on the "length of your credit history." Finally, 10% of your FICO score comes from each of, "the types of credit you have" and the "new credit"e; you have or have been seeking.
The ApprovalGUARD Service - Understanding how minute changes in behavior can impact your credit scores and your financial future is critical, but without the assistance of a professional it is also nearly impossible to do; so let us help. The ApprovalGUARD service will provide you with credit reports, insider credit tips, property data reports, and most importantly a REAL LIVE credit coach who will explain your credit report and help you identify strategies for building and optimizing your credit. Your coach will work with you to ensure that you understand how credit works and how to manage it, so you can build and manage your credit for the best possible results. In the end, this can mean a better – or even a good – credit score...
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