Have you heard you could “rent” your good credit rating? That’s because there was someone lined up to “pay” for your credit and a middleman ready to reap a profit in the process.

But all that is changing in a few days.

If you “rented” your credit rating, be aware of this and protect your identity from abuses now that your information is “out there somewhere”.

Protect yourself from identity theft.

Beginning in September, the newest version of the FICO formula will ignore all authorized user information when computing scores. The company that created FICO, Fair Isaac, changed the formula after learning that some credit repair companies were “buying” authorized user slots on the credit cards of people with good scores and “renting” those slots to strangers with bad credit to quickly boost their scores.

Fair Isaac said it would introduce the formula next month at one of the three credit bureaus and roll it out at the other two bureaus over the next 12 months. The three bureaus — Equifax, Experian and TransUnion — sell FICO and other credit scores to lenders.

But also because you can’t use this “quick” way to improve your credit rating, getting professional help is all the more important! Sign up to receive the free credit guide!

Read the whole article at the LA Times.

The credit repair law is on your side. That law is the Fair Credit Reporting Act.

It is a Federal Law governing the credit scores of every consumer in the United States of America. That is why you are able to hire national experts to help you exercise your rights under the law with regard to your credit score.

Below is a summary of the FCRA. The full Act can be obtained directly from the Federal Trade Commission’s web site here.

Fair Credit Reporting Act (Summary)

Public Law 91-508

The Fair Credit Reporting Act (FCRA) allows a consumer to challenge the information on his credit report on the basis of “completeness and accuracy.” If, after a reinvestigation by the credit bureau, the disputed information “is found to be inaccurate or can no longer be verified, the [credit bureau] shall promptly delete such information.”

The credit bureaus are required to complete the investigation within a “reasonable period of time.” This period has been set at thirty days.

The credit bureaus can ignore the consumer dispute if they have reason to believe that the dispute is “frivolous or irrelevant.” The FTC commentary on the FCRA cites, as an example of a frivolous dispute, a dispute wherein the consumer challenges all negative items on his credit report without providing any allegations regarding specific items in the credit file. However, “A [credit bureau] must assume a consumer’s dispute is bona fide, unless there is clear and convincing evidence to the contrary.”

When a consumer challenges a negative credit listing on the basis of extenuating circumstances, such as health problems, divorce, job loss, etc., the credit bureaus are entitled to ignore that dispute.

When a consumer submits a dispute which is neither frivolous nor irrelevant by credit bureau standards, the credit bureau must “at a minimum… check with the original sources or other reliable sources of the disputed information and inform them of the nature of the consumer’s dispute.” In some cases of consumer dispute, “Reinvestigation and verification may require more than asking the original source of the disputed information the same question and receiving the same answer.”

In other words, when a consumer files or re-files a valid dispute, the credit bureaus must contact the source of the credit information (the creditor) and confirm that the information is accurate, verifiable, and not obsolete. In some circumstances, the credit bureau is required to go beyond a simple verification of the creditor’s own computer record. If, within 30 days, the credit bureau has not received verification from the creditor, then the credit bureau must promptly delete the credit listing.

In theory and law, the process is deceptively simple, thus leading many people to think that they can easily handle this themselves “for the price of a few postage stamps.” Most quickly discover that the credit bureaus have made it much more difficult than one would imagine. For help in this, we recommend using Lexington Law a professional credit report repair company.

The Christian Science Monitor reported today that Sub Prime Loans Face Big Rate Hikes. Those with less than stellar credit ratings are expected to take huge hits as their adjustable rate mortgage interest is being increased. Sadly, mortgage lenders are bailing themselves out on the backs of their customers who were already being charged significantly higher interest.

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Millions of homeowners around the nation are now getting the news in the mail: The interest rate on their home loans is going up, possibly to double-digit levels.

The hardest hit are expected to be people who have less-than-stellar credit and cannot afford to make the new payments. An increase of several hundred dollars a month will force them either to get relief or to default.

Read the whole article at Christian Science Monitory

We’ve just added a page on the subject Common Myths of Credit Repair.

The page discusses the questions consumers ask every day about Credit Repair:

In a previous post I noted that there were complaints about a credit repair firm in North Carolina. Another article has noted the names in case you run into these characters!

They neither write grants nor do credit repair, despite their claims!

From the Hickory Daily Record

Ken Yang and Pao Yang own the companies. The BBB linked them and other Yang family members to two additional credit service companies in Hickory - National Credit Solutions of Hickory and Carolina Credit Repair of Hickory.

During the past three years, the Better Business Bureau has received 18 complaints against those companies.

“Most consumers pay the upfront fees because they have a contract that includes a money-back guarantee,” said Tom Bartholomy, president and chief executive officer of The Better Business Bureau of Southern Piedmont. “When Accu Credit/ Grantwriting Plus and other companies operating in a similar manner fail to fulfill these contractual obligations, consumers become victims with little or no recourse for recouping the money they have paid.”

Read it all at the Hickory Daily Record

Please check our home page for important Credit Repair information to help you avoid such swindles!

According to the Charlotte Obsever

The Better Business Bureau warned consumers Monday that it had received complaints that a Hickory-based grant-writing and credit-repair company was taking customers’ money without providing any services.

The company, Accucredit Inc., guaranteed customers that it would fix bad and poor credit ratings if they paid fees of up to $1,000 in advance, said Janet Hart, a spokeswoman for the Southern Piedmont BBB.

Accucredit has also done business as Grant Writing Plus Inc., promising customers thousands of dollars in governmental grants in exchange for initial fees as high as $4,000, Hart said.

Accucredit’s Web site was not working Monday morning, and the company’s phone had been disconnected.

Read the rest of the article at the Charlotte Obsever

I was at a presentation by a “futurist” - one of those guys who extrapolates present trends and projects what the future might be like.

To highlight the importance of financial education for youth, he discussed two issues every young person in High School needs to learn.

That at the job interview, employers are looking at not only the “resume” and “credentials” but also the applicants credit score and MySpace page.

Bad credit or crazy posts on MySpace can kill the job offer dead.

This is especially important since kids are getting credit card offers as soon as they’re 18. Kids can develop atrocious credit overnight and be destroyed at the job interview. By eliminating you from certain higher paying jobs, a bad credit rating could reduce your lifetime income by thousands of dollars if not hundreds of thousands of dollars.

The Federal Trade Commission considers identity theft to be a major issue in our society these days. Scamsters recruit unwitting victims from throughout the nation to receive forged checks with your name and cash them before the theft is discovered. And did you know the federal government doesn’t step in until there’s $100,000 involved? Amazing.

But also, the victims of Identity Theft are “guilty until proven innocent”… and even then creditors may hold them responsible for payment. A comprehensive strategy for identity theft and credit report protection requires financial protection IF identity theft occurs as well as monitoring to protect against the theft.

So it’s time to protect ourselves from identity theft.

Even if you can prove your identity has been stolen, unless you have protection in place, you’ll still be nagged, threatened, and cajoled into paying up for somebody else’s crimes and it’s YOU who will be affected.

Here’s a true story:

My name is Earl Laurie
and this is my story.

I had seen a news report about LifeLock.The CEO gave out his social security number on TV! The reporter tried to use it to open new accounts and couldn’t. That’s when I signed up. Later, I heard from the Navy and the VA that they had lost my private information. Then someone tried to open two credit card accounts under my name. They tried to steal my identity, but LifeLock worked exactly like they said it would.

Here’s another true story:

My name is Aaron Freeman and this is my story.

Thieves broke into my home and got everything - my passport, birth certificate, social security card, and several other priceless items. They could have ruined me financially. I had heard about how LifeLock guarantees identity protection. So I put them to the test. A few days later, I started getting phone calls that the thieves were trying to open new credit accounts using my identity. LifeLock’s system worked just like they said it would and stopped the thieves cold.

Interested in Identity Theft protection as part of a comprehensive credit repair program? You may for the time being order Lifelock at a special discount only through this link.

Most people take the “ostrich” approach to their credit rating. They bury their head in the sand and hope for the best. But in the age of identity theft, it’s crucial to check your credit report regularly for your optimum financial health. The only place to get a free annual credit report is at AnnualCreditReport.com not one of the many imitators actually trying to sell you a credit monitoring service or other service.

In much the same way that a resume displays your work experience to a prospective employer, a credit report provides prospective creditors (and in some cases employers and insurers too) with a detailed picture of your credit history. And like a resume, your credit report can influence whether you will receive what you are applying for.

Ideally, your credit report is an accurate, up-to-date reflection of your credit history. However, since we don’t live in an ideal world, there are many reasons that your credit report could contain inaccuracies that might prevent you from receiving the credit you deserve. The good news is you can take action to keep your report accurate. Here are the top five reasons why you should make a practice of regularly reviewing your credit report:

Inaccuracies & Mixed Credit Files

Many inaccuracies on a credit report can be the result of simple human error, and are therefore are not difficult to dispute. Of course, if you don’t order your credit report, you might never know about it. Whether the inaccuracies relate to payments not credited, late payments, or data mixed in from the credit file of someone else with a name similar to yours, you will want to contact the credit bureau to dispute inaccurate information promptly.

Tracking Payments

One of the most important elements of credit is a demonstrated history of on time payments. Once you send the check though, anything can happen–a delay in the payment being received can kick you over to a 30-day delinquency. If you call your creditor and explain the situation, they might adjust the information. Of course, if you don’t read your credit report, you won’t necessarily know which payments are being received and reported properly.

Identity Theft

This issue alone is reason to order your credit report immediately. Identity theft is an insidious crime, involving a thief who assumes your name to open new accounts, divert your card statements to another address, and run up all sorts of bad debt without you ever knowing about it until collectors come calling. Over time, identity theft could jeopardize your ability to obtain further credit. The best way to catch a thief who is using your name is by getting a copy of your credit report, which will show you if there are accounts listed you know you haven’t opened. For example, if a thief has intercepted a pre-approved credit card offer in your name and sent it in with a change of address, your credit report will include the account.

Inquiries

If you’re shopping around for a loan or more credit, you should know that when creditors check your credit, it places an inquiry on your credit report. Inquiries can add up, which is often interpreted as a negative by creditors. For this reason, too many inquiries can
actually make getting credit more difficult. Moreover, if you didn’t authorize
someone to look at your credit report and they did, they may have broken the
law.

Credit Fraud–Unauthorized Charges

Credit fraud involves the theft of your credit card or
account number to make unauthorized charges to your account. Though consumers
are protected financially from this abuse, other creditors may take note of
all this activity and decide to raise your interest rates or refuse to grant
you a loan. Ordering your credit report will help you catch new activity on
accounts that you haven’t been using, or may have closed.

When it comes to managing your credit worthiness, your
credit report is your best resource. Ordering your credit report gives you the
opportunity to manage your credit wisely today, while planning your credit
strategy for achieving future goals–a credit-savvy move every consumer should
make!

Click Here to Learn More About Credit Repair

Here’s a nontechnical discussion about your credit score to help you begin to understand it so you know why it’s important to repair bad credit. At the end please feel free to get more free information to help you as you consider your credit repair options.

Understanding Your Credit Score
What does your score mean?

This rating system is meant to develop a snapshot of the risk you currently represent to a lender. Several parameters in your credit file, including length of credit history, number of open accounts, loans, mortgages, public records, and others are formulated to produce a three-digit score between about 300 and 950. There are other scores used by lenders and insurance companies (some of which are developed by FICO) such as Application and Behavior scores. These other scores take other information into account. Usually a lender will use a combination of your credit score with other factors when determining your risk. They all have the same objective, to determine the borrower’s potential risk. Regardless of whether the score was generated by FICO or a system based on FICO parameters, they all yield an industry standard three-digit score. This score places the borrower in one of three main categories (we named the third one ourselves.)

Prime, sub-prime, and shafted

Prime If your credit score is above 680, you are considered a “prime borrower” and will have no problem getting a good interest rate on your home loan, car loan, or credit card.

Sub-Prime If your credit score is below 680, you are “sub prime”, and will likely pay a much higher interest rate on your loan.

Shafted Below 560 is the shafted score. At least that is how most lenders and credit issuers perceive it. You can still get a credit card but you will likely be hit with a security deposit or high acquisition fee. In addition to that your interest rate will likely be 22 to 23%. You can forget about most home loans and the majority of new car loans at this score. Below 560 is no place to be. You will pay much, much more in higher interest and unnecessary fees. You may even pay more for your insurance rates. A very low score can even prevent you from getting a job with many companies. If your in this catagory Click Here.

How are credit scores calculated?

The methods of calculating your FICO may differ slightly depending on the credit bureau. When obtaining your score from one of the Credit Bureaus it is important to understand that your score does not come directly from FICO. It is adapted to each bureau and is given its own name: Equifax uses “Beacon”, Trans Union uses “Empirica”, and Experian uses “Experian/Fair Isaac.” These scores are also referred to as your “Bureau Scores.”

Since your score is derived from your bureau data, it will change every time your reports change. However your score is calculated, it will always take into consideration many categories of information. No one piece of information or factor determines your score. As the information in your credit report changes, the importance of one or several factors may change in your FICO score. Lenders look at many things when making a credit decision, including your income and the kind of credit you are applying for. However, your FICO score does not reflect these facts as it only evaluates the information retained by the credit reporting agency.

To Learn More Click here.

What factors affect your credit score?

There are five factors which are used in credit scoring calculations that determine your overall credit score.

Previous Credit Performance (Payment History) 35% A lender wants to know what your payment history is like. Have you paid everything on time, are you late on anything now, and so on. Your payment history is just one piece of information used in calculating your score, although it can be the very important.

Current Level of Indebtedness (Amount Owed) 30% How much is too much? Can the borrower pay me and still afford to pay his other bills? Not necessarily. Having available credit can actually help your ratio of debt to available credit. These are the types of questions that most borrowers want to know and the answers are almost as important as your previous credit history.

Amount of Time Credit Has Been In Use (Length of Credit) 15% Generally speaking, the longer the credit history the better your score. However, this factor only makes up 15% of your total score so even young people, students or others with short histories can still score high overall as long as the other factors show good. If you are new to credit than there is little you can do to improve this part of your score. Open an account and be patient.

Pursuit of New Credit (10%) Credit is much more popular today. Just look at the number of credit card offers you get via the Internet and in the mail. Consumers can now shop for credit and find the best terms to meet their needs. Each time someone runs a credit check on you, it creates an inquiry.

Fair Isaac has changed some of its calculations to account for these new trends. Specifically, they treat a group of inquiries - which probably represents a search for the best rate on a single loan - as though it was a single inquiry (note: this only applies to auto or mortgage loan inquiries.) For example, auto loan inquires that are within 14 days of each other only count as one inquiry.

Types of Credit Experience (10%) A healthy mix of different types of credit, installment loans, retail accounts, credit cards, and mortgage. This score is not normally a key factor in determining your score but it can help a close score. Its not a good idea to try and open different types of accounts just to try and make this factor better. It will likely reduce your score in other areas. You should never open accounts you don’t intend to use anyway.

What type of accounts you have, and how many, can make a big difference. The optimal ratio of installment versus revolving accounts depends on your profile and differs from person to person. One factor that seems to have significant influence is your percent of open installment loans. Too many can lower this portion of your score. For more information Click here.

Improving your credit score

Now that you know how your score is calculated, you can begin making changes to your current financial planning. The best things you can do are simple.

You can try to understand the laws and your self, but we have found it’s so much easier to have someone do it for you. We strongly recommend using Lexington Law Firm, they are the industry leaders.

Download free information using this form!