You Should Know This – Credit Score Comparisons

Credit scoring seems like it should be a straightforward concept. All of the financial information provided to consumers, however, is confusing. You may see multiple scores and various criteria used by banks, credit card companies, and other lenders. What is your real credit score? Read on for an overview of credit scores and what they mean for the general population.

Scoring methods all generally use statistics and analysis to determine consumer credit payments over time. They are all used by lender and financial institutions to facilitate providing credit, loans, and mortgages to individuals. Payment history, overall debt, number of cards, and other information is used in most scoring models.

The History of Credit Scores

Until the 1970s credit scoring systems were not the prescribed way to determine credit viability. Financial institutions used human metrics such as a personal relationship with the client, body language, and initial conversations. The financiers would often share information across the industry when they had mutual clients. Results were often misleading and financial institutions themselves suffered from loss associated with unreliable consumers.

Equifax, now a big 3 credit bureau, paved the way for future credit information collection as the first company operating with the goal of collecting consumer data. TransUnion followed Equifax in the 1960s. Data collection in the 1960s included irrelevant information about personal habits, vices, and opinions. The level of misinformation and distrust by the general population eventually led to the passing of the Fair Credit Reporting Act in 1970, which regulates data collection and circulation of consumer credit information.

FICO (Fair Isaac Corporation) is known as the universal credit scoring method. The three main credit bureaus in the US all use FICO scores in their credit reporting documents. More than 80 countries around the world also use FICO information to improve business processes. FICO helps consumers manage credit health around the world through their analytics and reporting information.

The company was founded in 1956 and now 95% of the United States’ largest financial institutions utilize FICO information in day-to-day business. One hundred billion FICO credit scores have been sold since the company began scoring.

FICO began sharing credit information with businesses in the late 1950s when the company began. In 1987 the FICO scores of individuals became more widely available to lending professionals. It wasn’t until 2003, with the passing of the Fair and Accurate Credit Transactions Act, that credit information was made freely available to consumers once a year.

VantageScore began in 2006 as a collaboration between the three main credit reporting bureaus. Experian, TransUnion, and Equifax developed VantageScore to improve their techniques for analyzing data. The company focuses on accurately providing consumer information in the context of relevant economic data. They are dedicated to finding a solution and standardizing certain consumer data sets across the three bureaus.

The system has been adopted by large financial institutions and lenders as an alternative to FICO. Roughly 10% of the total market uses VantageScore currently. VantageScore “credit report card” is available to consumers for free as of 2013. The consumer market will likely see an increase in the use of VantageScore as a direct competitor of FICO.

Why, if all of this information is regulated and shared throughout the industry, do we receive different scores from each credit reporting agency? The truth is that all of the major credit bureaus – Equifax, TransUnion, and Experian – look at credit information differently. The companies receive your relevant financial information at different times. If a credit card statement hasn’t been paid off when the data is sent to a bureau, your credit score might be impacted by that information.

Financial institutions actually rely on numerous scores to determine their individual criteria for providing credit. FICO, itself, offers more than 50 unique scores. Consumers who receive credit reports only see a selection of information that is determined to be most helpful. These consumer-directed scores are often completely different from the numbers a financial institution will evaluate. They are strictly educational in nature and used to provide consumers with a sense of overall credit worthiness.

Individual companies may also implement their own scoring equations. Ultimately, there may be different scores from FICO, VantageScore, Experian, Equifax, TransUnion, and independent companies. So many numbers floating around makes it difficult for the average consumer to understand which numbers to evaluate for personal finances.

Where to Look

Those looking to get a sense of overall financial standing can look at any of the scoring methods for a reasonable picture. If you are trying to determine how your score will appear to another party, a lender or bank, you may have more difficulty finding accurate information. Ask your lender which scoring method was used for your situation to determine where to find specific numbers associated with a loan or financial inquiry.

Your true, accurate, real credit score will not be found by evaluating one score. The formulas guiding credit scoring vary slightly, giving more or less weight to factors like credit history or outstanding debt. Most of us do not need a 100% accurate credit score. Personal finances and a general understanding of your situation can be attained through any of the major credit scoring companies.

More information

If the credit-scoring methodology is still confusing to you, you’re not alone. The process is full of nuances and statistics that those who are not in the field of finance often find hard to comprehend. Contact credit services and counselors for more information about your unique situation. Consumers sometimes need help determining methods of improving credit scores, as well as contesting inaccurate information that can drive a score down across all scoring models.

Look at credit reports from each of the 3 bureaus at least once a year. Any information that is inaccurate or misleading may need to be addressed by you, the consumer, or a credit repair specialist. Finding a company that specializes in credit law will provide you with peace of mind that your credit score is in the hands of individuals who know what can legally be done to improve your credit score.

Is your bad credit holding you back from getting approved for credit cards, personal loans, auto loans, or the mortgage of your dream home? Are you struggling to make payments, getting denied loans, or even worried that your poor credit may prevent you from getting a job?

We at Park View Credit know how important it is to have the best credit possible. This is why we have helped thousands of Americans repair their credit with effective and affordable credit services. Our guaranteed services are affordable and come with the same level of service as the nation’s leading law firms.

We never let our members think that bad credit is something they have to live with. Park View Credit knows the complicated world of credit, and we’re here to help.

How The Way Educating To The Young About Credit?

As children grow into teens and young adults, they need to start learning about building good credit. Not having the proper guidance can lead young people down a path of building debt and poor money management. Starting at home with some principles for good financial management is a great way for parents to help their children grow into responsible adults.

To Begin

Don’t start out with a credit card. The ease of using a credit card makes it far too easy to abuse. Instead, begin by teaching your children how to reconcile their bank statements with a debit card or checks. To help them when they first start out, link your bank account with theirs to avoid surcharges if they have difficulty with the lessons. Remind them to keep their receipts and always be mindful of spending only what they have available.

Have your children take responsibility for their car insurance or other bills that are directly related to their finances. Letting children have this experience of managing an amount while keeping in mind they have bills to pay is a great starting point for making good financial decisions.

Remind children about safety when using a debit card and have them practice watching their bank accounts for fraudulent charges. Encourage them to use an old fashioned record and write every purchase down so they understand the monetary power of a swipe. It’s much easier this day in age to get carried away with swiping a card for small charges that add up quickly. Their card usage should not be based on the “Accepted” notice after they complete a transaction.

Credit Cards

Once you feel comfortable that your children are paying attention to their spending habits and remaining within their limits, it’s time to start building credit. Starting out early with good credit card habits can really give a child a step up when it comes to larger purchases later in life. Holding a credit card is more than an easy and secure way to pay for goods. It will build a credit score to protect your child’s future.

Prepaid Cards

You may not feel comfortable letting your child start out with a debit card. The potential for fraud and overdraft charges is serious. It could also pose a problem if your child has access to a savings account that is intended for the future. Instead of letting him or her access a larger sum, obtain a prepaid card. The card will act as cash that is loaded in a predetermined amount by parents.

Many common credit card companies offer prepaid cards that include features like parental controls (to prevent your child from shopping certain locales), mobile features, and discounts for certain brands. You may encounter fees with the use of prepaid cards, which is a major drawback to using this form of payment. From activation fees to balance inquiry fees and maintenance fees, you might end up spending more than necessary on this form of card.

Joint Credit

If your child is under the age of 18, he or she will not be able to apply for a card without parental approval. As a step toward credit independence, try a joint credit card that is cosigned by a parent. You can choose a low limit level to ensure your child doesn’t immediately start overspending.

Take time when the credit statement arrives each month to go over the activity and let your child know which purchases were valid and which were superfluous. At this point, a card should only be used for purchases that you and your child have agreed upon: emergencies, school-related activities, or buying something they have already saved money to obtain.

Authorized User Cards

Another option is to let your child have a card on your account as a secondary or tertiary cardholder. Sign them up for a parent’s card that the parent can benefit from, too. Make sure to carefully monitor statements for any purchases made on your account to prevent poor money management.

It’s easy for a child to think there are no consequences if he has access to a parent’s account with high limits. Set certain limits on what your child can purchase or how much he or she can spend per month to ensure the card is not abused. Go over your child’s spending with him every month.

Credit for 18 Year Olds

When a child heads off to college, having a credit card can help manage daily expenses in a secure way. Be a part of this first independent credit card venture, if possible. Helping your child learn how to avoid carrying a balance, as well as understanding how to prepare for times when carrying a balance is unavoidable is important. Having to learn these lessons without a parent’s guidance can be intimidating and difficult.

Hopefully the lessons of carrying other cards will pay off when your child opens his or her first independent credit account. Make sure you ask about your child’s credit card habits regularly. If you support your child financially through school, having these continuing conversations is easier and a good way to refresh your child’s memory about good money management.

Managing Consequences

Teaching your child a lesson can be difficult if your child has a hard time spending appropriately. While you don’t want to bail your child out from poor spending decisions, carrying a balance can lead to a financial obligation the parent must ultimately take responsibility for. Go back over a few steps of card management skills if your child mistakenly spends more than he can afford.

Overspending once or twice is understandable when a child starts learning about money management. Consider another payment method if your child has too much difficulty in remaining within appropriate spending limits. Letting spending go unchecked is a recipe for financial disaster. It can lead to your child having to carry a balance that can’t be paid off and that will weaken his or her credit score.

Don’t let a child off the hook for any surcharges or debt incurred, however. Being responsible for paying off debt before your child can use the money for anything else is a good way to let him or her know there are repercussions for poor spending decisions.

Iam Sure That You Dont Know About This – 3 Things You Don't Know About Your Credit Score

Yet, if you’re like many Americans, just knowing that you have a credit score may be just about all that you know. This is a bad situation, and you need to fix it, sooner than later.

“Why?” you ask. Well, your FICO score is, for better or worse, like your financial DNA. So, while you hopefully know that you have a credit score, you may not know just how important that score is to your life and livelihood. Unlike DNA, however, your score isn’t a number that just takes care of itself. No, you need to take care of it.

Here are just three reasons for making sure that you do.

Your credit score is somebody else’s business.
That’s right: big business. Your score is at the mercy of three privately owned mega corporations, whose business is rating you and your creditworthiness. In fact, it is these companies, or credit bureaus, that create your score in the first place. The “big three” of these national credit bureaus are Experian, Equifax, and TransUnion. This credit – or FICO – score that they assign you ranges anywhere from 300 on the low side to a perfect 850 on the high one.

Bad credit is expensive.

Your credit score can cost you hundreds of thousands of dollars in extra fees if it is less than excellent. You may have heard the saying, “Buy with cash, pay once; buy with credit, pay three times.” This refers to interest, or the cost of borrowing money. There are many other potential costs to bad credit, however. This can lead to hundreds and even thousands of dollars spent on higher premiums for your auto and home insurance.

Background checks aren’t all that potential employers pull.

Your credit score affects your ability to get a job. That’s right: your estimated ability to repay borrowed money (i.e., debt) also can be used to assess your fittingness for a specific kind of job. Although legislation has been introduced to limit the access of prospective employers to your credit score, these are just limitations, not universal exclusions.

Knowledge is power!

Hopefully, you’ve seen by now that your credit score is a big indicator of your financial health. Ignoring a low score won’t make it go away. However, proactively taking the proverbial credit bull by the horns and working at restoring or just raising your credit score is something that anyone can do. You just have to put your mind to it.

Smart Tips – 4 Consequences of Having an Overdue Credit Account

If you’ve ever made a late payment, you’re not alone. According to the National Foundation for Credit Counseling, roughly 1 in 4 adults don’t always pay their bills on time.

Many Americans struggle with making payments on time in their 20s and 30s, and sometimes this habit can extend far past those age groups. Having an overdue credit account can be damaging to your credit score and to your wallet.

Late Fees

Late payments often results in late fees. Additionally, if you’re near or at your credit limit sometimes a late fee can result in causing your credit account to go over its limit. This can often be more damaging than a late fee to an overdue credit account. Making your payments on time will help you avoid going over your credit limit and also keep more money in your pockets. Late fees are incredibly expensive, costing anywhere from $25 to even a percentage of the balance on your overdue credit account.

Increased Interest Rates

If you miss a payment, sometimes your interest rate can increase. This unintended consequence can cost you thousands depending on the balance on your overdue credit account. The average interest rate for a credit card in the US is 16.05 percent, if you make a late payment your interest rate could easily double. Imagine paying over 30 percent interest on a bill you’re already having trouble paying. This could also raise your balance over its limit costing you even more money.

Lower Credit Score

The heaviest factor in your credit score calculation is your payment history accounting for 35 percent of your total score. It’s also the fastest way to improve or damage your credit score. Even one late payment can drop your score several points, which could come with the consequence of higher insurance rates, being denied for a mortgage or auto loan and even being disqualified for a new job. Another thing to think about is the fact your credit utilization accounts for 30 percent of your overall score. If you’re using more than 30 percent of your overall available credit this could also drastically reduce your score. I know from experience, I was at 32 percent utilization and paid it down to 28 percent. My score went up 31 points by reducing my utilization rate by just four percent.

Account Closure

In cases where you are 60-90 days overdue on your credit account, the creditor could choose to close your account and turn you over to collections. Depending on the type of credit account this could be a serious issue causing a foreclosure on your home a repossession of your vehicle. This is extremely damaging to your credit score and your ability to secure financing in the future.

The best advice I can give you is to call your creditor when you think your payment is going to be late. Sometimes they’ll offer you a grace period or a payment plan to help you get current and stay current on your payments. Life happens and sometimes unexpected situations arise that cause you to make a late payment. Communication is key. Most creditors will appreciate your honesty and work with you.

Still Want A Using Corporate Credit Cards? Read This – How To Choose The Best Corporate Credit Cards

When it comes to business privileges and perks, one of the most common ones that employers give to their employees are corporate credit cards. Although this does not necessarily mean that you can use this card anytime and anywhere you want to as this is limited to company rules, still this gives you convenience and security whenever you are in a business trip.

And having said this, it is very important that you know how to choose the best ones. Here are some tips that you can use as your guide in your selection.

    • Choose a corporate credit card that offers high spending limit. There are different types of cards and these offer different spending limits. Depending on your job position or your role in the company, it should provide you with just enough spending limit so you can pay for the things and services you need.

 

    • Choose a corporate credit card that has specific perks. If your company requires you to travel a lot for business or to meet up with some clients abroad, you should choose a card that gives travel perks. There are several different types of cards and all of them offer several different perks. If you are assigned to make or close deals with clients, it is best to choose a corporate credits card that offers dining privileges. This is best for those who regularly meet up with clients over lunch or dinner.

 

    • Choose a corporate credit card with easy payment option. This is usually an arrangement between the issuing bank and your company. Some companies prefer to have their cards linked to their corporate bank accounts so that payments are taken directly from the accounts. This about is a convenient and hassle-free option to save time and effort.

 

  • Choose a corporate credit card provides 24/7 customers service options. This is actually very important especially if you are travelling abroad or internationally when you need to call for assistance for certain circumstances such as lost card or captured card. Having a 24/7 customer services assistance is perfect to make sure that you are covered anytime of the day. Business owners may also need to update some card restrictions especially when an employee is no longer connected with the company and calling the bank that provides 24/7 customer assistance is a huge advantage.

Read This One, And You Will Choose The Right Choiced With Credit Cards

The credit card has become the most convenient and common instrument through which you can make all your payments. These cards have topped the list of modern short-term credit facilities and are proven to be the cheapest form of credit and are easily accessible at any POS point. Keeping all the benefits rendered by the cards, a majority of the population who are in need of short-term credit would like to go for a credit card over the other modes. However, not everyone can choose a card which would optimize the returns from it as very little information about it is available and known.

These cards are generally issued by banks, financial institutions and by some stores. The cards bear a certain credit limit and this limit is set by the issuing companies considering your income, previous credits, and the payment track records. Once you apply for a credit card considering all these circumstances your credit limit will be fixed and each time you make a purchase by using this card the amount will be added to your credit card. You will be given with an interest-free period during which you don’t need to pay any interest on the amount of credit you used on the card. Generally, the interest-free period lies between 20-55 days and it varies depending on the issuer company.

The information that we specify here will give you an idea on the basics which would enable you to choose a card with the higher interest-free period so, that you can get more interest-free credit limit and also more repayment time. However, along with the basic information on these cards let’s look at the few more tips or tricks on choosing the best.

– Get your credit scores: Assess your credit scores based on which you will be issued a card with higher benefits. The credit scores will make your card choices much brighter if the score is good and vice versa if they are not.

– Identify your type – There are numerous types of cards available in the market. Choose or identify the card of your type. While choosing your type, make sure you will choose a card which can improve your credit card limit and also save money. There are cards on which you will earn reward points on each purchase which you can redeem at a later date.

– Make your credit Choices- Make a list of objectives for choosing a credit card. It is not advisable to swipe a credit card every time just because you hold one. So, make sure of the primary objectives behind taking a card and limit yourself to use the card only for that purchase.

How The Work Of Corporate Credit Cards?

When used wisely, corporate credit cards can definitely help businesses simultaneously achieve career goals and reap personal perks. On the contrary, this can lead to a corporate free-fall when used poorly.

Corporate credit cards are different from both personal and small business credit cards. These are offered only be a few issuers. Generally, such accounts are established by businesses by utilizing a banking relationship or through a deal negotiated directly with a card issuer. In order to develop such kind of relationship, the company’s credit will be considered.

Companies may give their employees with corporate credit cards for the payment of business-related expenses, which are often travel-relation. Though it is often issued in the company’s name, be aware that it can also display the name of the employee cardholder.

They are categorized into 2 – individual payment cards and company payment cards. Those who opt for individual payment cards, they will be the ones responsible for submitting their own expense report. Also, they will be paying the issuer directly for any charges. On the other hand, the employer will pick up the tab for all company-sanctioned changes with the company-payment cards. But for any personal or unapproved charges, the employee will still pay the issuer directly.

Tips When Using These Cards

Be aware of your company’s policies – Cardholders must familiarize themselves with the reporting and spending rules provided by their employers. Also, they must educate themselves about the policies specific to their position or department. They need to know the types and limits on making charges. It is highly recommended that cardholders must attend training sessions and be updated on the policies.

Learn how to avoid pitfalls – There are indeed a lot of pitfalls cardholders must avoid. These will include the unapproved charges that can end up hitting your wallet and combining personal expenses with business spending that may put you on a collision course with the management.

Use your common sense – The lack of simple common sense is indeed among the biggest dangers from having corporate credit cards. Prior to swiping it, ask yourself if such expense is directly related to your job.

Always secure your card – Be sure to keep your card in a safe place to avoid theft or loss. Immediately after noticing that you have lost it, report it to the authorities. This will help prevent fraudulent charges. Cardholders must be aware that when they have lost their card, they can be provided with a new card or new account number immediately during emergency cases.

The Thing You Should Do When Someone Does a Credit Checks

Every credit reporting agency has its own format and reports your information differently, but all three credit reports for the major bureaus will generally contain the same information. Your report will contain both personal, identifying information which is not a factor in your score calculation, as well as, information used for scoring like payment history, credit utilization, and length of credit, inquires and judgements.

Personal Information That Identifies You

Your personal information like your name, both married and maiden, current and former addresses, your date of birth and employment information will show up on your credit report to identify you. Contrary to popular belief, none of this information is used in your score calculation. This information is updated when you apply for new credit.

Accounts

Also known as Trade Lines, your accounts are how your lenders report your payment history, balance and account status on your report. This could range from your mortgage, to credit cards, auto and personal loans. The date you opened and closed the account will be present as well.

Inquiries for New Credit

Whenever you apply to a new line of credit, you’re allowing that creditor to pull a copy of your report, known as an inquiry. An Inquiry will drop your credit score a few points every time, and it will stay on your report for two years.

Public Records

“Credit reporting agencies also collect public record information from state and county courts, and information on overdue debt from collection agencies. Public record information includes bankruptcies, foreclosures, suits, wage attachments, liens and judgments.” -MyFico.com

What are some things that don’t show on my credit report?

The good news is, there are things that don’t show up on your credit report, which you might have heard otherwise.

Moving

Your score does not go down every time you move. While your address history is on your report, it does not affect the calculation of your credit score on any level.

Your Salary

Your Salary is not reported on your credit report and holds no weight in your score calculation. Neither does other forms of income like unemployment, alimony, child support or public assistance. However, if you’re applying for new credit a combination of your salary and credit history could be used to determine if you’re lend-able.

Do You Know The Meaning Of Client From The Future?

I met a future client the other day. The reason I call him a future client is, like too many people, he has less than ideal credit. Like many people, it was not his fault.

You see, this young man served his county by completing two tours in Iraq. He came home to his young wife, only to find out that she was sick and unfortunately passed away.

He took care of her, and stayed by her side until the end. His work suffered, and he was on the list when layoffs happen. The medical bills piled up, house payments piled up, and he lost his home.

He couldn’t find a place to rent, or buy, because of his bad credit, and the fact that he didn’t have a job, so he bought a van and lived out of it. He made that van his library, and his office. He worked, went to school and got a degree, but he still had bad credit.

That’s when we met. He knows a friend of mine, and my friend thought I could help. I bought him dinner. He wouldn’t let me pay for it, until I made him understand that it was a business meeting and not charity.

I started off by telling him to write a letter, explaining why he has bad credit, and send it to the credit bureau. I told him to have the credit bureau include the letter within his credit report. Then I told him to request a free annual credit report.

I suggested he look the report over very carefully and dispute anything that does not look right, such as debts that he doesn’t recognize. He should dispute these debts by writing a dispute letter. I told him this report would not show a credit score, but it would show the information that is used to calculate his credit scores, from all three credit bureaus, TransUnion, Equifax, and Experian.

I told him a Fair Isaac Corporation (FICO) score ranges from 300 to 850. Then I wanted him to know a credit score starts to become questionable when it falls below 650. A credit score breaks down into the following areas:

  • Payment history 35%
  • Outstanding debt 30%
  • Length of your credit history 15%
  • Types of credit 10%
  • Employment history & Identity
  • Inquires made on credit within fourteen days
  • How long it took to pay off debts in the past
  • Late payments
  • Bankruptcies, Foreclosure and liens

The following are some things I told him to do, in order to start repairing his credit:

  • Pay rent and other bills In advance
  • Do not take out additional credit cards
  • Pay two months rent as a security deposit, instead of one month
  • Get a roommate
  • Pay with direct deposit
  • Obtain recommendations from employers, and other business you have purchased from
  • Use a credit repair company to validate debt, stop vendors from reporting past bad debt and questionable accounts. Some credit repair companies are Lexingtonlaw.com, Skyblue, creditrepair.com and Ovation
  • Find a good mortgage broker

Lastly, it usually takes about two years of doing the things listed above before your credit is repaired. When someone that has less than ideal credit is ready to buy a home, they should try to purchase the home through a company, such as American Rent To Own. This way they could lease, and then purchase the home. American Rent To Own allows some of the rent to go towards the purchase of the home.

The Reasons – Why Owners Prefer To Use The Best Corporate Credit Cards

It is important for business owners to be aware about their expenses. Not to mention, they need to make sure that they can create accurate reports about their financial status. However, there are cases when doing these tasks can be quite difficult since you may end up using your personal finances for your business. This is why more and more owners prefer to use the best corporate credit cards. Apart from that, below are also some of the reasons why owners prefer using such cards for their business.

To improve cash flow

One of the main reasons why business owners make use of corporate credit cards is to improve their cash flow. Of course, in order to gain better profits, it is important to look for ways that can help you manage your expenses. Luckily, credit cards for businesses that are offered by financial institutions can provide you with lower or even free interest rates. Because of this, you do not need to pay for extra charges when purchasing items your employees need.

To make billing and payments flexible

The next reason why owners prefer using such credit cards is to make billing and payments flexible. There are cases when employees need to purchase certain items for your business. However, not all employees have cash on hand. As a result, purchasing can be impossible. By making use of credit cards, you can purchase items easily without using cash which can make billing and payments better for your business.

To manage your business accounts properly

Another reason why owners prefer using credit cards is to manage their business accounts properly. When running a business, owners need to deal with numerous types of financial tasks. Sadly, some owners cannot remember all these transactions which can affect their financial reports. Fortunately, credit card providers can offer owners with reports about their transactions efficiently.

To gain access to numerous features

When using corporate credit cards, business owners can also gain access to numerous features. These include SMS alerts, spend security controls as well as simplified procedures in purchasing. With these features, owners are rest assured that can they purchase and deal with other expenses more effectively which can help reduce their tasks at work.

To attain wonderful perks

Finally, making use of corporate cards can also provide owners with wonderful perks. For instance, when planning business travels, some financial institutions can provide discounts or promos. Apart from that, some financial institutions also offer special deals on restaurants. Because of this, you can make business meetings more appealing.

These are only some of the reasons why business owners prefer using the best corporate cards from leading financial institutions.