SavvySugar

Free Credit Report Scams Aren't Going Away

SavvySugar — Mon, 09 Nov 2009 12:00:23 -0800

By now we all know about the not-so-free nature of those FreeCreditReport.com services; a few of you even say you've fallen for its misleading practices. But even after the government publicly condemned the site, "free" credit monitoring services - which require you to sign up for a paid service, but promise you can cancel at any time - are popping up everywhere.

One friend recently had a particularly nasty experience with one of these companies while apartment hunting. To hear what happened, read more.

An apartment listing on Craigslist requested that she get her own credit report through a specific company. She filled out all the info and put in a credit card when prompted (ouch), but wasn’t able to access the free report she was promised. A week later, charges showed up on her card, but each time she called the company to cancel, she was sent to voicemail. After some Google research revealed that several fraud alerts had already been filed against the company, she reported the charges as fraudulent to her credit card company.

Savvy as we all may be, it’s easier than you think to get sucked into one of these situations. To prevent this from happening to you, keep the following tips in mind:

Only request free credit reports using AnnualCreditReport.com. You can request a free report up to three times a year, once from each of the major reporting agencies. This site will not ask you to enter your credit card number.

Type the Annual Credit Report URL directly into your address bar, rather than clicking on a link from a third party to reach the site. If you’re redirected to a site that isn’t one of the major reporting agencies (Equifax, TransUnion, or Experian), don’t continue with the process.

If at any point you’re asked for a credit or debit card number, walk away. Companies only request a credit card for one reason: they plan to charge you. Period.

Have you ever had an experience with one of these companies? Do you have any other tips to add?

Credit Score Fact or Fiction: How Money Are You?

SavvySugar — Thu, 10 Sep 2009 10:30:22 -0700

Once standardized test scores are a thing of the past, your credit score is the number you worry about most. Your score impacts interest rates and more, so it's a financial must to understand what it is and how you can improve it. Do you know fact from fiction when it comes to credit scores?

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How-To: Fix Errors on Your Credit Report

SavvySugar — Wed, 22 Jul 2009 10:30:08 -0700

It has always been a possibility that potential employers may check your credit history to make hiring decisions, and according to a number of employment experts, employment credit checks are becoming more common. One way to boost your credit score is to ensure there are no errors on your credit report. Improve your score and your chances of getting that job by getting any mistakes removed ASAP.

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What Do You Know About Money After Marriage?

SavvySugar — Thu, 25 Jun 2009 12:00:56 -0700

Legally joining your lives through marriage is a big deal in countless ways, and money matters are a hot topic for many couples. Deciding whether or not to join accounts is only one piece of the financial picture. What do you know about the other elements, like your credit score and taxes? Take the quiz!

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How to Keep Track of Your Credit For Free

SavvySugar — Tue, 16 Jun 2009 06:30:48 -0700

Most lenders use your FICO scores to determine your credit worthiness, but typically it costs you money to retrieve your own score. You have three FICO scores (one from each major credit bureau) based on the information each bureau keeps on file about you. If you don't want to shell out cash every time you have the urge to check your score, there's a solution for you. To find out what it is, read more.

Ron Shevlin, a senior analyst at research-advisory firm Aite Group LLC, suggests using CreditKarma.com because it "offers a truly free score and advice on how to improve it." According to the Wall Street Journal, CreditKarma works like this: Enter personal information (but no credit card details). The site will use your social security number to get your TransUnion generated score. The site will also show you how your score stacks up against other users and will help identify the major influences on your score.

If you're not in a situation that necessitates knowing all of your FICO scores, and simply want to keep track of your credit, CreditKarma could be a good resource. Don't rely on this avenue alone for keeping an eye on your finances and be sure to take advantage of your free annual credit reports. Shevlin warns that we should expect credit card advertisements on the site - that doesn't mean you should click on them.

How-To: Boost Your Credit Score

SavvySugar — Wed, 20 May 2009 10:30:03 -0700

Houses are the cheapest they've been in years, and first-time homebuyers can claim an $8,000 credit if they become owners before December. The time might be right for you to dip a toe into the housing market, but your credit score needs to be in tip-top shape to land a loan. Follow my tips for improving your score to get the best possible interest rates.

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Money Tip: When Not to Use Your Credit Card

SavvySugar — Tue, 12 May 2009 13:30:13 -0700

An excellent credit score will get you the best interest rates, so you want to ensure lenders will see your score at its very best. You already know that it's a bad idea to apply for new credit in the months leading up to applying for a loan, but CNN Money has another tip regarding the credit cards you already own.

To play it safe, they recommend keeping your cards under wraps during the month before you know you'll be applying for a loan and explain that, "Even if you pay off your balances at the end of the month, there's a chance a lender might pull your score the day before those payments are recorded, making it look as though you're tapping your credit."

Simply put: keep your paws off your cards before applying for a loan for a better chance at getting the best interest rates. Simple and effective, it's a must-do in my book.

Source

Four Facts About Credit Scores

SavvySugar — Fri, 01 May 2009 08:30:53 -0700

One of my best girlfriends is in the market to purchase her first home with her new husband, and before applying for their loan she called to ask a question about her credit score. She wanted to know whether or not it was a good idea to open a new Amex card - she and her husband are antsy to start earning points. I answered her question the best I could; the answer is below, along with three other facts about credit scores.

Generally, you should not apply for new credit right before your credit is evaluated for a loan. The application for a new credit card will instigate a hard inquiry on your credit and ding your score. Even if the damage is minimal, you could be offered a loan with a higher interest rate if your score isn't top notch.
All of the credit bureaus use proprietary formulas to calculate scores, and you have to pay for all three scores to determine an average. If you're simply curious about your score and unwilling to fork up the cash to buy multiple scores, get your FICO for about $16 - according to the FICO website, 90 percent of the largest US banks use FICO scores.

To see two more facts about credit scores, read more.

Paying your bills on time carries the heaviest weight (35 percent) in your FICO score calculation; outstanding debt makes up 30 percent; length of credit is 15 percent of your score; any new credit and types of credit used are weighted at 10 percent, respectively.
The highest possible score is 850, the lowest possible score is 300, and the median credit score in the US is 723. Most lenders require a score of at least 760 to get the best rates.

Source

Ask Savvy: Why Does My Credit Score Vary Among Agencies?

SavvySugar — Thu, 30 Apr 2009 06:30:08 -0700

Dear Savvy,

Over the last couple years I've been really working on improving my credit, and in December I bought my first home! It just recently showed up on my report and has definitely increased my score. But my question is, how do the three reporting agencies vary so much? My score ranges from 794 to 645. I've printed out and double checked they have all the same information. How can they be so different? All in all, I'm proud that I've raised it from an average of 518 but the difference between agencies seems a little weird.

Savvy says: First of all, congrats on improving your score and buying a house! A big variance like that in your credit score is frustrating, but not alarming. Find out why the three agencies' calculations are different when you read more.

Creditors submit your information to the reporting agencies, and the compiled details are used to determine your credit rating. While all agencies base their scores on this information, they use different formulas to calculate your credit score. The reporting agencies have proprietary formulas that assign value to different factors, and the inconsistencies between your credit scores is a result of these varied weightings.

It sounds like you're on top of it, but thoroughly reviewing your credit reports on a regular basis will alert you to any discrepancies. Creditors often do not report to all three agencies so your history will vary, but most importantly, staying on top of your report allows you to catch any mistakes that could damage your score.

Source

Ask Savvy: Can a Lower Limit Affect My Credit Score?

SavvySugar — Thu, 23 Apr 2009 06:30:05 -0700

Dear Savvy,

So, I got a letter in the mail today from my credit card company telling me that they were lowering my credit limit. I don't use this card much, don't carry a balance on it, and definitely don't need a $14,000 limit. I'm just wondering, does it affect my credit score or anything?

To see my answer, read more.

Savvy says: Even though you don't carry a balance on the card, a lower credit limit could impact your credit score. To find out why, read more.

Credit card limits are taken into account when calculating your credit-to-debt ratio, meaning how much debt you have compared to the amount of credit available. If you're carrying debt unrelated to the card, having less available credit lowers your aggregate credit limit, which can bring down your credit score.

Add up all of your existing balances and divide that number by the sum of all your cards' limits. What you end up with is your utilization percentage, and it's best to keep this number under 35 percent to maintain a good credit score.

Credit card carriers are cutting limits more frequently these days so be sure to open your mail, like this reader did, instead of sending it straight to the shredder. Carrying zero balances on your cards is ideal, but be sure you're using them at least every few months so you have a better chance of keeping your limits in tact.

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