Credit9 - Personal Loans

Credit Reports

 

A Credit Report is a detailed report of credit history that is gathered by three credit bureaus; Transunion, Equifax, and Experian. Things like personal loans, mortgages, credit cards, medical bills and car payments are some of the things that can be on your credit report. Lenders look at your credit report to determine your creditworthiness, your credit report carries a lot of weight. They affect nearly every aspect of your life and certainly affect how lenders, potential jobs, auto insurers and business partners will view you.

What Credit Reports Are Not

Credit reports do not include your income, marital status, assets, age or location. They are also not permanent, after seven years your report will knock off accounts that are seven years old. You can also always improve your credit, whether it is by taking out a loan to pay everything off or starting to pay your bills on time. Using a credit monitoring service, like Credit 9 is going to help you stay on top of your report and make sure you are doing everything you can to maintain a high score.

How To Get A Copy Of Your Credit Report

By signing up with Credit 9 you will get a free copy of your credit score. We will pull a soft copy, meaning it will not affect your credit in anyway. You will also get a breakdown of what is hurting your credit, this will show you exactly what you need to working on to bring up your score. You can login whenever you would like and see you credit report, we will also be alerting you of any fraud we find.

What The Numbers Mean

Your credit score is calculated on a formula based on open credit card utilization, on-time payments, accounts in collections, bankruptcies, foreclosures, liens, age of credit lines, total amount of accounts and hard credit inquiries. All of these things determine what score you credit is at. Having a great credit score makes it easier for you to get a loan, and you end up paying less money in interest.

Make Credit Reports Work For You

Monitoring your credit is very important, any errors on it needs to be reported to the credit bureaus as it can dramatically hurt your score. It is illegal for a credit bureau to report inaccurate information. Using a credit monitoring service like Credit 9 makes it simple for you to take control of your credit report.

Check Your Credit Before Buying a Home

What is a Credit Score?

Imagine that a friend asks to borrow money from you. Assuming you had the money to loan, you might then ask yourself, “Did he pay me back the last time he borrowed money? Did he pay me back the full amount? On time?” When you approach banks and lenders for a loan, they go through a similar analysis, but since they don’t know you personally, they use your credit history to determine whether you will be a responsible borrower. Lenders learn about your credit history by looking at your credit report. You can get a free Credit Report Card that includes your free credit score right now!

Credit reports are developed by three separate credit agencies. These agencies (Equifax, Experian, and TransUnion) gather information about your credit history, and, using a formula developed by Fair Isaac Corporation (FICO), each assigns you a credit score. You will end up with three slightly different credit scores, each from one of the three agencies. Lenders typically look at your middle credit score (as opposed to the highest or the lowest), and you must provide all three of your credit scores (one from Equifax, one from Experian, and one from TransUnion), when applying for a loan.

Why are Credit Scores so Important When Buying a Home?

Your credit score helps determine the rate and conditions you receive on a loan. If your credit score is high, meaning that your credit history indicates that you’ve paid your credit card bills on time, haven’t “maxed out” your credit cards, etc., then lenders believe it’s a fairly good bet that you won’t have difficulty paying off your loan. They will see you as a low-risk investment and offer you a low rate on your loan with good conditions.

If your score is lower, lenders will think you’re a riskier investment, and charge you (by loaning you money at a higher interest rate, often including hidden charges) to take on the perceived risk. Get your free credit score now.

How do Credit Scores Affect You When Applying for a Loan?

Most lenders have a baseline credit score by which they largely make their decision to approve or deny mortgage applicants. The maximum credit score is 850 (though a score of 850 is rare, indeed. Only about 10% of applicants have a score over 800). Any score in the 700s or above is excellent and will get you a loan with the lowest interest rate. When you get into the 600s it starts getting dicey. A score of 680, for example, is still considered good, but when you get below 660, some lenders start saying, “No.”

For others, 640 or 620 is the line at which you won’t be considered for their better programs. Once you get into the 500s, you are a candidate only for what the industry calls subprime loans, those with interest rates that are a couple of percentage points higher than those offered to prime borrowers. Subprime loans also often come with a lot of hidden charges.

So you can see the importance of keeping a good score. It used to be okay to miss a credit card payment deadline. You might pay a $15 late fee. Big deal! But if you do this on a regular basis, it can savage your score and cost you many, many times that amount when you want to buy or refinance a home. That’s the bad news.

 

The good news: your credit score isn’t fixed in stone. If you have bad credit scores, there are ways to improve your credit health. If you find your scores are lower than you expected, you’ll need to engage in credit rehab. This is different from credit repair, defined as going to an outside company that promises to cure your problems and raise your scores. There may be some good ones out there (along with some disreputable ones) but they can’t do anything you can’t do yourself and you shouldn’t waste your time or money going to them for help.

From a financial standpoint, it is almost always better to take the time to improve your credit health, and make yourself eligible for a better interest rate, than it is to apply for a loan with a credit score that will only make you eligible for a subprime loan.

Find Out Where You Stand

You can check your credit score each month using Credit.com’s free Credit Report Card. This completely free tool will break down your credit score into sections and give you a grade for each. You’ll see, for example, how your payment history, debt and other factors affect your score, and you’ll get recommendations for steps you may want to consider to address problems. In addition, you’ll also find credit offers from lenders who may be willing to offer you credit. Checking your own credit reports and scores does not affect your credit score in any way.

What is a Good Credit Score?

A good credit score is what each of us aspires to. After all, a credit score is one of the important determining factors when it comes to borrowing money – and getting a low rate when you do.

But trying to pin down a specific number that means your credit score is “good” can be tricky. When it comes to figuring out what makes a good credit score, there are a few different schools of thought.

How Do I Rate?

Most credit scores – including the FICO score and the latest version of the VantageScore – operate within the range of 301 to 850. Within that range, there are different categories, from bad to excellent.

  • Excellent Credit: 750+
  • Good Credit: 700-749
  • Fair Credit: 650-699
  • Poor Credit: 600-649
  • Bad Credit: below 600

How does my credit score compare to others? Find out now for FREE.

But even these aren’t set in stone. That’s because lenders all have their own definitions of what is a good credit score. One lender that is looking to approve more borrowers might approve applicants with credit scores of 680 or higher. Another might be more selective and only approve those with scores of 750 or higher. Or both lenders might offer credit to anyone with a score of at least 650, but charge consumers with scores below 700 a higher interest rate!

The Credit Score Range Scale

There are many different credit scores available to lenders, and they each develop their own credit score range. Why is that important? Because if you get your credit score, you need to know the credit score range you are looking at so you understand where your number fits in.

The Credit Score Range Using Various Scoring Models:

  • FICO Score range: 300-850
  • VantageScore 3.0 range: 300–850
  • VantageScore scale (versions 1.0 and 2.0): 501–990
  • PLUS Score: 330-830
  • TransRisk Score: 100-900
  • Equifax Credit Score: 280–850

With all of the scores listed above, the higher the number the lower the risk. That means consumers with higher scores are more likely to get approved for credit, and to get the best interest rates when they do. And they are more likely to get discounts on insurance. What is considered a “high” score depends on what type of score is being used.

If your FICO score is 840, for example, you’re just 10 points shy of the highest score possible and your credit is “superprime.” But if you have an 840 VantageScore (using version 2.0), it’s not as spectacular because you’re 150 points away from the highest possible score.

 

What’s Your Score?

Don’t assume your score is good (or isn’t) just because you have always paid your bills on time (or haven’t.) The only way to know whether you have a good credit score is to check. You can get your credit score free every other week at Credit.com. This is a truly free credit score – no payment information is requested. In addition to the number, you’ll see a breakdown of the factors that affect your score and get recommendations for making your credit as strong as possible.

What Can I Get With A Good Credit Score?

Some of the best credit cards–from rewards cards to 0% balance transfer offers–go to consumers with strong credit scores. You’ll find great credit cards for good credit here.

A good credit score can also get you a lower interest rate when you borrow. That means you will pay less over time.

For example, if you’re buying a $300,000 house with a 30 year fixed mortgage, and you have good credit, then you could end up paying more than $90,000 less for that house over the life of the loan than if you had bad credit.

So, in the end, it really pays to understand your credit scores and to make them as strong as possible.

Did the CARD Act Really Protect College Student Credit Scores?

Before the Credit Card Accountability, Responsibility, and Disclosure or CARD Act went into effect in 2009, it was a much more common sight to see credit card companies setting up kiosks welcoming students to campus, offering swag in exchange for filling out an application for a college-affinity card. Credit cards branded with the logo and name of a college, alumni association, or other affiliated group were a common sight in college towns across the country.

Congress passed the CARD act, partly in response to critics of these offers, who argued that students could get better deals by shopping for credit card offers elsewhere. Others, such as the American Bankers Association, claimed that it’s important for college students to have a strong credit score.

In addition to eliminating freebies like Frisbees and T-shirts in exchange for completed applications, the CARD act also required that students under age 21 have a parent co-sign (or have a job) in order to get a credit card, and urged colleges to put restrictions on the way the card companies marketed to students.

The effects of that law have been dramatic. In 2009, colleges inked more than 1,000 agreements with credit card issuers. Under these agreements, credit card companies pay affiliated institutions for the use of their logo or campus image, as well as access to contact information of students or alumni for marketing purposes.

In 2014, there were just 272 such agreements, according to a report on the impact of the CARD Act by the Consumer Financial Protection Bureau. Colleges are also making far less money off of these deals, with royalty and bonus payments from issuers dropping from $84 million in 2009 to $34 million five years later, according to the CFPB report.

Shifting regulations may be the primary reason that card issuers have cut back on marketing to current students, but the trend also reflects public sentiment against such practices. Even before the passage of the card act, colleges like the University of Maryland and Rochester Institute of Technology were implementing laws limiting the ability of issuers to market to students.

Another reason for the decline in new student accounts may be a growing wariness about debt. According to asurvey of millennials by Credit Karma, 48% of those who do not have credit cards said that the reason was they didn’t want to accumulate debt. While the majority (61%) of millennials in that study had already opened at least one credit card, they now have access to a lot more resources about smart ways to build a healthy credit history than previous generations. According to another Credit Karma study, two thirds of those between the ages of 31 and 44 made a “credit fumble” and had to take steps to recover later in life.

All of those factors have issuers of affinity cards focusing their efforts on targeting students post-graduation, rather than while they’re still on campus. While the CARD Act also covers alumni associations, graduates tend to be over age 21, eliminating the need for a cosigner and making it easier for issuers to send prescreened offers.

While the total number of all new affinity card agreements has gone down since the regulations changed in 2009, the portion of agreements that target alumni has increased, to make up more than half the market, according to the CFPB report. In 2014, alumni agreements accounted for 66 percent of all affinity card payments by card issuers, 65 percent of new accounts, and 72 percent of open accounts.

The Alumni Association of the University of Michigan netted the highest issuer payment in 2014, raking in more than $2.2 million from FIA Card Services, a subsidiary of Bank of America. The Penn State Alumni Association ranked second with $1.8 million in payments. The University of Southern California took in $1.5 million in 2014, making it the third highest institution on the list, but the top-ranking school, after the alumni associations.

Pay for a Delete: Do you think it is a Good Idea?

What in life is really essential to our survival? It’s a pretty short list, headlined by food, shelter and clothing, but many people nowadays would also include a mobile phone among their list of indispensable “must-have” items. But did you know that a mobile phone payment could also affect someone’s credit scores? Currently, the account can only have a negative impact if you default on your payment, a sign that you might be falling behind on your regular financial responsibilities.

For most of your other payments, including a car loan, a mortgage or credit cards, you are rewarded for paying your bills on time and penalized when you miss or are late on a payment. A mobile phone, however, affects your credit scores only if you default on your payments and it is charged off or sent to collections. One key thing to know about charged off debt, however: if your debt is charged off, you’re still obligated to pay it.

1. Your account balance changed.

Many credit scoring models include consideration of your payment history and your credit utilization ratio (your outstanding balance as it relates to your total amount of credit available). The length of credit history, your credit mix, and your amount of new credit are also factors that can be considered, but may not have as much weight as the others.

Because your payment history is a major part of many scoring calculations, it is important that you avoid defaulting on any payments whatsoever . While paying your mobile phone bill on time doesn’t affect your credit scores positively, defaulting on the account is a serious negative that could have a potentially severe effect on your credit scores.

Is it already too late for you? If you currently have a defaulted mobile phone payment on your credit report, don’t be disheartened. Defaulted debt that’s either charged off or sent to collections will stay on your credit report for seven years. However, if you pay it off and recommit to using good credit behaviors like paying your bills on time each month, it will begin to recede into the past before you know it. Making good credit a part of your everyday life is something you can always reaffirm your commitment to; good behaviors beget good scores, so know that your efforts to improve your habits won’t be in vain.