credit score

What Is Your Insurance Score and Why Does It Matter?

March 19, 2019 By Kathryn Vercillo Leave a Comment

Do you know what your insurance score is?

Everyone knows what a credit score is, and nowadays, it’s fairly easy to access for free.

However, many people don’t know what an insurance score is, let alone what their own number is.

What Is an Insurance Score?

As you might have guessed, an insurance score is similar to your credit score. However, it applies specifically to insurance rates. In other words, an insurance company will consider this number when determining your rates. Like with a credit score, if you have a good insurance score then you’ll get better rates.

Your score is directly linked with your credit report. The insurer evaluates the data in that credit report. They want to know the likelihood that you will file a claim in the future. To determine this, they examine your past. If your credit report indicates that you aren’t likely to file a claim, then your insurance score is better. As a result, you get offered better rates. Essentially, the insurance company rewards you for being unlikely to require their services.

Basically, research shows that there is some correlation between specific aspects of your credit report and the likelihood that you’ll get into an accident or need to file an insurance claim. Therefore, starting in the 1990s, some states began allowing insurance companies to use these numbers to determine customer’s rates. However, not all states allow this, even today. Therefore, whether or not your credit impacts your insurance rates will vary depending on what state you are in.

Insurance Score vs. Credit Score

It’s important to understand that these two scores are not the same thing. Obviously, they are related. If you have a good credit score, then you are also likely to have a good credit-based insurance score. In both cases, you have good credit. Therefore, lenders will trust you to make your payments on time and in full.

However, just because you are good at making payments doesn’t mean that it’s smart for them to give you insurance. Yes, you’ll likely make your monthly insurance payments. They do take that into consideration. However, if your credit report indicates the likelihood that you’ll file frequent claims, then your insurance score might not be great in spite of your good credit score.

Insurance companies will look at your history of accidents and claims to determine your rates. Your credit score and report play a part but aren’t the only determining factors. Insurance companies also look at information in two big databases (called A-PLUS and CLUE) to get a sense of the risk they take on when they insure you. As a consumer, you are entitled to one free annual report from each of these companies. Therefore, you can order yours to get a sense of what insurance companies might see when they consider your rates.

Where to Get Your Insurance Score

Major credit businesses, such as FICO and Transunion, generate credit scores. Moreover, individual insurance companies sometimes use their own methods of calculation to get your credit score. For example, Progressive has its own data calculation tool. Therefore, there are slight variations in credit scores depending on who does the calculations.

This may sound odd, but if you think about it, it’s similar to getting your credit score from each of the three major companies (Experian, Equifax, and TransUnion). The scores are all similar, but they may not be exactly the same.

What Does This Score Affect?

If you live in a state that allows insurance scores for underwriting and rate determination, then you might want to know how this can affect you. Typically, you’ll see these scores used in two situations:

Auto insurance (including other vehicle insurance such as boats and RVs)
Home insurance (including homeowner’s and renter’s insurance)

These types of insurance are often mandatory. If you drive, then auto insurance is mandatory. If you have a home mortgage, then most likely homeowner’s insurance is mandatory. Therefore, you are probably affected by your insurance score even though you might not have known before today what that score even was.

Sometimes health insurance and life insurance plans also consider insurance scores, although this is less common.

Calculating Your Insurance Score

Since there are so many different places that might calculate your insurance score, it’s difficult to know exactly which factors will be taken into consideration. However, the companies all consider a variety of factors.

In terms of your credit report, they all look at the same basic information. What is your credit score? How good are you with making on-time payments? Do you have high amounts of debt? The lower your credit score, the lower your insurance score is likely to be.

In terms of other factors, it will depend on which type of insurance you’re applying to get. For example, auto insurance companies may look at:

Overall driving history
Tickets you’ve received in recent years
Auto accidents
Claims that you have filed with previous auto insurance companies

If you are looking at homeowner’s insurance, then you might be aware of the following:

Claims that you have filed with previous home insurance companies
Safety features such as house alarm systems

It’s important to be aware that there are certain factors that insurance companies are not allowed to take into consideration. Your home’s location, your race or cultural background, and your marital status are all off-limits. In other words, they can look at your potential risk as an insurance consumer, but they can’t factor your personal details into that risk assessment.

Like with a credit score, you’ll receive a number as your score. It’s typically between 200 and 997. Generally speaking, if you have a score of over 770, then you have a good score. In contrast, if your score is under 500, then you have a poor rating. However, this may vary depending on the company.

How to Improve Your Insurance Score

If you have a good score, then you get better rates on insurance. Therefore, a good score means that you don’t have to pay as much for coverage. As a result, it makes sense to do all that you can to improve your insurance score.

First off, you should take all steps necessary to improve your overall credit score. After all, it does play a big part in determining your insurance score. When you consistently make on-time payments, have a strong debt-to-income ratio, and meet the other demands to achieve good credit, it goes a long way towards reducing your insurance costs.

Furthermore, the more time that passes without filing a claim, the better your insurance score will be. Therefore, unless it’s absolutely necessary, avoid filing claims with your insurance companies. Although you may have to pay a bit more out of pocket at first to get that good score, the score means you’ll pay less on your premiums over time.

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21 Reasons Dave Ramsey Sucks at Giving Credit Score Advice

February 17, 2019 By Jeffrey Strain 117 Comments

There are huge disadvantages of having no credit score. I actually know this better than most. After living over ten years in Japan, I came back to the US naively assuming that the credit history I had built over there would transfer back to the US. That wasn’t the case and I found myself having to deal with numerous situations without a credit score. From my personal experience of having to deal with all the negatives that come with having no credit score, as well as knowing a number of others who experienced a similar situation to me when they returned, I can say with conviction that Dave Ramsey gives horrible credit score advice.

For those unfamiliar, Dave Ramsey refers to a credit score as the “I-Love-Debt Score” and makes the statement that “the only way to have a good credit score is to go into debt, stay in debt, and continually pay your accounts perfectly — without adding too much debt or paying too much off. In other words, stay in debt for as long as you can.” This is patently false as I currently have no debt whatsoever and yet have a good credit score. Others do too.

He then advises that since you are working to become debt free, once you reach that goal you “…don’t need a credit score, anyway, since you don’t plan on using credit!” While this might sound nice, I can attest that even when you are debt free, a good credit score comes in extremely handy. I would even argue that having one is essential if you want to truly be financially savvy since it can save you a lot of money. If you care about getting the most out of your money, a credit score, whether we like it or not, is important to have.

While you may have heard some of the below arguments before regarding why a credit score can be important, my guess is that some of my arguments you may never have considered before. Below are 21 reasons that it’s important to keep a good credit score even if you’re debt free (and why Dave Ramsey sucks at giving credit score advice).

Wasted Time

This one is huge and one that I rarely see mentioned. I can’t over emphasize this point enough, and I would argue for this reason alone, you want to keep a good credit score. Not having one will mean that you will have to spend a lot more time when it comes to numerous financial situations, including any of the ones mentioned below. If you believe that your time is worth something as I do, wasted time can be a huge cost. Even when you are able to get what you want, you usually have to spend a lot more time explaining why you don’t have a credit score even though you don’t have any debt. I had to spend countless extra hours, many being extremely frustrating, sorting out my financial situation which should have been straight forward and simple all because I had no credit history.

Difficulties Even When Successful

Another problem with having no credit score is that even when you successfully get what you want, it’s much more difficult to get it than if you had a good credit score. Not having a credit score often means going through several layers of management until you can reach someone who will approve what you need. The fact is that for most entry-level employees, if anything isn’t exactly correct, they can’t approve it. That means that people who don’t have credit scores have to work much harder to get things than others that have a good credit score can get without any hassles.

Poor Customer Service

This is another aspect of not having a credit score that is often not mentioned, but the reality is that if you have no credit score, you don’t get treated nearly as well in many situations as you do when you have a good credit. When institutions look up my credit these days, they always seem to come back with a smile and an attitude that they are willing to do anything they can to help me. When I had no credit score, they always came back with concerned looks and a demeanor telling me that it was going to be difficult to help me even if they did the best that they could. The fact is, having a good score means that you will get better treatment from anyone who looks it up.

Lack of Financial Flexibility

Having a good credit score gives you a lot of financial flexibility that isn’t available for those with no credit score. When you have a good credit score, there are many financial institutions that want to work with you. That’s not the case when you have no credit score. Having a quality credit score means that you can get a much better deal when it come to virtually any financial transaction than you could get with no credit score at all. When the unexpected happens and you need to get funds for something that you had never anticipated, you simply have more flexibility in getting them than you do without a score to your name. This include the flexibility of financially helping out others if you choose to do so.

Increase Large Transaction Risks

One of the things that I immediately realized when I was still trying to get a credit card (which I was having trouble doing because I didn’t have a credit score) was the additional risk that came when making large purchases. I have always put the purchase of my airline tickets on credit cards because years ago I had a ticket on an airline that suddenly went bankrupt. Since I had made the purchase with a credit card, the credit card company refunded the amount back to me since I never received the service I had paid for. Had I not paid with a credit card in that instance, I would have simply lost the money. I had to make a number of large purchases upon arriving back in the US and although I was able to make them in other ways, I felt a bit uneasy knowing that if things went wrong, I really had no protection simply due to the lack of a credit rating.

Emergency Cash

Having lived through the Great Hanshin Earthquake (along with a number of smaller natural disasters), I know the importance of having access to emergency funds. When these disasters happen, it’s often impossible to get access to money that you have in your bank account (in the case of the Hanshin Earthquake, it was over 2 weeks before I had access to those funds). It helps to have cash in the days immediately after the disaster when many of the electronic transaction systems are down, but it also helps to have a credit card. During that time, my credit card was a lifesaver in securing a hotel room and other needs when I needed to spend thousands of dollars to get out of the city and find other lodging, but still didn’t have access to my bank accounts. Living in an area of the US where I knew a similar disaster could take place, I found that I needed to keep a lot more cash on hand in case of an emergency. I ended up losing interest on the cash I took out of the bank account plus there was the risk that it might get stolen, or in an emergency I wouldn’t be able to get to where I kept it in my house. Even with a large amount of cash on hand, I still felt my financial preparation was far from adequate had a true emergency happened. That is not the case now that I have good credit and credit cards.

Debit Cards Have Drawbacks

It’s often argued that there really is no need to have credit cards if you have a debit card, but in my experience, there are some definite drawbacks to this argument. I had a friend who had his debit card stolen and his account compromised. While he eventually got all the money that was taken out of his account back, his account ended up being frozen for a few weeks while an investigation took place. During this time, he had no access to any of his banking funds. As mentioned above, in an emergency you might need to access more funds than are in your debit card account with no way to transfer additional funds to it. It also doesn’t cover you with large transactions like an airline ticket refund if an airline goes bankrupt.

Difficulty Getting Security Clearance

One of my friends who came back after living overseas for a number of years landed a great job, but the job required security clearance. The lack of a credit score turned out to be a major stumbling block for him to get his clearance. He eventually did, but it took a lot of time and effort since his lack of one sent up a red flag, and even ended up meaning much more scrutiny in other areas of his life as well to get the clearance. Again, if you consider time and aggravation as a cost, then there is a definite one when you don’t have a score to your name.

Difficulty Getting an Apartment

I remember talking with one apartment manager when returning to the US that told me as soon as I mentioned that I didn’t have a credit score that I wouldn’t get approved for an apartment in his complex. He explained that there was high demand for the apartments so it simply wasn’t worth the risk to management even though I had a good explanation as to why I didn’t have one. While I did eventually find an apartment, the lack of a score caused some type of issue at each complex I looked at, making the entire process much more difficult than it ever should have been, and definitely much more so than if mine had been good.

The Possibility of Divorce

Nobody ever thinks they are going to get divorced when they first get married, but the truth of the matter is a high percentage of couples do. If you go into a divorce without a credit score, this can cause a number of issue both during and after. When people believe that they will never have to take out another loan when they become debt free, they are probably at a point where they never think they will get divorced either. The problem with divorce is that it can be an extremely expensive process and can quickly wipe out any savings and emergency funds that you might have had. Once divorced, financial circumstances can greatly change to where loans you thought you would once never need, might be needed to bridge gaps until you can create a new budget for your new reality. Hiring lawyers, finding a new job, getting a new place to live all become more difficult without a score in an already stressful time.

Difficulty Getting Loan Approval

If there is ever a situation when you need a loan, not having a credit score will make it many times more difficult to secure it than if you have a good credit. The thing is, even if you anticipate never needing to get another loan again, circumstances change and life could place a wrench into your best laid plans. Even if you are debt free at a moment and don’t anticipate ever needing a loan, that can quickly change if you unexpectedly lose a job and are unable to find a new one as quickly as you hoped. Life throws curve balls from time to time and if you are thrown one without a good credit to your name, recovering from it can be a lot more difficult than if you had it.

A More Expensive Mortgage

If you need to take out a mortgage, you will end up paying much more if you don’t have a credit score. The problem is that no credit score is equivalent to a bad credit score to most lending institutions. If they have no records that you can pay off your debts, they assume the worst and assume that you can’t. This means no score is the same as having a terrible score in the eyes of lending institutions. While you still may be able to secure a loan (and you may not), you will end up having to pay a larger interest rate to do it which can mean paying tens of thousands of dollars more over the lifetime of the loan.

Difficulty Securing Utility Services

When I needed to get utilities in my name after returning from Japan, I couldn’t just call and have them turned on like I expected. Several required me to pay a deposit in order to put the service in my name since I had no credit history of paying these bills in the past. It makes for an extra step in the process, it takes more time to get the service and you lose the interest that you could have earned from the money that you must give as a deposit.

Trouble Getting a Cell Phone Contract

Upon my return to the US, I was actually denied the first cell phone contract I tried to get due to no credit history. I was eventually able to secure one, but I ended up having to pay a deposit to do so much like I had to when it came to the utilities. While the deposit wasn’t a huge amount, I did lose the interest that I could have been earning on it. Far more frustrating was the extra time and headaches (and the costs associated with them) caused by not having a score that would have never come into play if I had a good one.

Possible Negative Effect on Job Opportunities

One thing that many people fail to realize is that as many as 70% of companies will check the credit history of a candidate for a job before they hire. With so many qualified people in the job market these days, it’s often the little things that end up determining who gets hired. A lack of a credit score compared with someone with the same qualifications that has a stellar one could be the difference in who gets the job. Similar small details can make the difference on promotions within certain corporations, especially for sensitive positions. If you lose a job or are passed over a promotion, that can mean thousands of dollars in lost income.

Pay More for a Car

There have been a number of surveys over the years that show that some car dealers have a tiered system on how much they mark-up a car depending on the credit score of the individual buying the car. Those who are deemed the least credit worthy, which would include those with no credit score, can be charged as much as 3.5% more for a car than those with top scores. This has nothing to do with the interest rate on a car loan, but the actual amount that is charged for the car. That means that even if you don’t need a car loan, you can potentially end up paying more for a car when you don’t have a score.

Another way that lack of a score can cost you more, as pointed out by Anni in the comments, is that you can often get dealer discounts by financing a car worth thousands of dollars, then pay off the car loan soon after. I know that this situation arises because I did it once for one of my car purchases. I had the cash to purchase the car in full, but there was a deal to save $2000 through the credit section of the car maker if I agreed to finance the car, so it made good financial sense to do so. I took the $2000 discount and the loan, but as soon as the $2000 credit came through, I paid off the entire loan. The key here is that to take advantage of these car maker financing discounts, you have to qualify for them, and if you don’t have a credit score, you’re not likely to do so.

A More Expensive Car Loan

If you do need to take out a car loan, you will end up paying thousands of dollars more in interest charges with no score than you would with a good one. Interest rates for those with good credit are usually in the low single digits, while those without will pay double-digit interest rates on the exact same loan. While you may not think you will ever need to take out a loan again, something that you never expected like a divorce or a lost job could result in you needing to get one.

More Expensive Insurance

The insurance industry is in the business of assessing risk. They look at a wide variety of things to determine the risks of the individuals and families that use their services. One of the things that they look at is your credit score. Having one that is poor makes you a higher risk than an individual who has one that is high. The problem is that having no score doesn’t allow them to determine whether you are a higher or lower risk, so they will always make the assumption that you are a higher risk when the risk is unknown. What that all means is that if you have no score, you will end up paying more for life insurance, car insurance and homeowners insurance than you would if you hade a good score.

Difficulty Getting a Credit Card

One of the things that Dave Ramsey says is that you don’t want credit cards, but this is only true if you can’t control yourself. The truth is that credit cards are only a disadvantage if you don’t pay them off fully each month. Once you are out of debt and have built an emergency fund so that there is no need to put expenses on your credit card that you can’t pay off in full each month, credit cards are actually a financially savvy tool to use. They give you insurance in many transactions you may not have otherwise, they may provide additional insurance for you with certain purchases such as airline tickets and car rentals, and they can even pay you cash back for purchases you would otherwise make. The problem is that if you ever find yourself in a situation where you need a credit card, but you don’t have a score, it can be extremely difficult to get one. Even when you do, you can expect to have a very low credit limit that will take years to grow to where it can be useful for larger purchases. I know because the only credit card I could qualify for when I returned was with a bank that I had been with for over 20 years, and they still would only give me one with a $500 limit to start.

Difficulty Getting School Loans

If you ever decide to go back to school, having no score can make it difficult to secure loans. Again, many assume that they will never need to go to school again, but further education might be the only way to secure a job if you happened to lose the one you have. If you can’t qualify for student loans from your school or federally funded loans to pay for your education, you will have to turn to private loans which have interest rates much higher and can end up costing you thousands of dollar more for the same education.

Difficulty Getting Business Loans

If at any time you decide that you would like to start a business, not having a score can hurt you financially in trying to secure a loan for the business. When banks give business loans to individuals, they want to see that they have a track record of paying out the other loans that they have taken out. With no score to your name, that record doesn’t exist and you become a greater risk to give a business loan to. With no score, you might not be able to qualify for one at all without putting up a large amount of collateral, and even if you do, you are likely to pay a higher interest rate on the loan than if you had good credit. You will definitely have a much more difficult time securing the loan which can mean many more hours (if not days) trying to get the money you need.

Dave Ramsey gives lousy credit score advice because he fails to take into account that life can get messy in ways that we never anticipate. In addition, he doesn’t take into account the costs associated with the extra time and aggravations that can come with not having a score. If it were true that you needed to always remain in debt in order to have a good credit score as he states, I might give him some slack, but the fact is that this statement is patently false, I know because I’m currently debt free with a good score. While I’m certainly not saying that all the advice that he gives is bad, the advice he gives regarding credit scores sucks.

Finally, if you don’t like my analysis and want to see what Dave Ramsey has to say, think about getting a copy of his book The Total Money Makeover. The book is an combination of educational handbook, inspirational coaching guide and self study manual. It has sold something like 5 million copies – so its a good example of his best work.

You Thought There Were Only 3 Credit Bureaus – Wrong!

June 26, 2018 By Tamila McDonald Leave a Comment

When people think of credit bureaus, they usually think there are only 3: Experian, Equifax, and Transunion. While these organizations play a big role in your life, they aren’t the only companies controlling your financial destiny.

There Are More Than 3 Credit Bureaus

In reality, there are over 40 consumer reporting agencies that operate in the US. Most of the others, outside of the big three, function in a specific niche. However, that doesn’t make them any less powerful.

Reports from these agencies may determine if you can obtain credit. These reports also determine access to insurance products, landing a job, or even your ability to pay with a check. The companies share information with a range of businesses, utilities, and government entities. They are also diligent about collecting data on you.

If you are wondering what the other credit bureaus mean to you, here’s an overview of each category and the companies in that space.

Low-Income and Subprime

Low-income and subprime reporting agencies focus on financial data that applies mostly to the low-income segment of the population. This includes the use of payday loans, check cashing services, rent-to-own arrangements, subprime credit cards, subprime mortgages, the opening of telecommunications accounts, and more.

Data in these reports can impact your ability to secure new credit, and not just in the subprime space.

Supplementary Reporting

These organizations function in multiple areas, supplementing data in specific niches. This can include anything from property records to ID verifications to child support obligations.

Employment Screening

Employment screening organizations focus on data that pertains to your employment, educational, salary, and credit histories. In some cases, they may also track criminal activities, like past convictions. They can also look at fingerprints from criminal record databases, or drug testing results.

Here are some of the most commonly used organizations in this category:

When a potential employer wants to look at your history, these are the kinds of agencies they contact. However, you typically must provide authorization before a company can look at these reports.

Once they get the report, a potential employer may refuse to hire you. Especially if this is in accordance with internal policies and based on the information they discover.

Tenant Screening

Many landlords pull consumer reports to determine if renting to particular applicants is a smart decision. Companies that operate in this space provide information about past evictions. They also report payment issues and address history. Some report on criminal background data as well, though this isn’t universal.

In many cases, landlords obtain permission before running these reports. However, details about these checks may be in the rental application, so separate notification may not occur.

If a landlord sees adverse actions or criminal information, they may decline to allow an applicant to become a tenant.

Checks and Banking

Check and bank screening reports track details about a person’s history with banking services. This includes previously writing bad checks, the reason for account closures, and activities that relate to fraud.

Data on these reports can affect your ability to open bank accounts or write checks at various retailers.

Personal Property Insurance

When a home, renters, or auto insurance company wants to determine your rate or decide whether to offer you a policy, they probably check with one of the consumer bureaus listed below. These organizations track information about past insurance claims. They also look at losses and damages, current and previous coverage, driving records, and more.

Depending on the information in your report, you may experience higher premiums or the inability to secure a new policy.

Medical

As with the personal property space, consumer reports also impact medical insurance decisions. These agencies track details about medical conditions. These companies also track prescription drug purchases, past claims, and similar data.

The details in your report can affect the issuing of new insurance policies, the cost of your premiums, or the cancellation of policies.

Utilities

In this segment, the National Consumer Telecommunications & Utilities Exchange is the largest consumer reporting agency. They collect information on utility bills, including payment histories, new accounts, unpaid bills, and fraud.

Retail

Retailers use The Retail Equation to look for signs of fraud and abuse. When it comes to product returns and exchanges; retailers can’t be too careful.

Gaming

Casinos and other gaming companies can get specialized reports from VIP Preferred . They look for fraud and abuse, mostly in the check cashing arena.

How To Get Access To These Reports

As with your big three credit reports, you do have the ability to check these consumer reports. Contact each agency to see if you are eligible for free reports. Some may offer free reports, while others charge a low fee.

Typically, if a consumer report leads to an adverse action, you can request a copy at no cost.

Contact the organization by using the links above to determine what you need to do to receive a copy of the information.

Have you ever interacted with one of these alternative consumer reporting agencies? Tell us about your experience in the comments below.

Looking for more great information about credit? Here are some articles to get you started:

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Why You Should Check Your Credit Report and Credit Score

June 18, 2018 By Jeff Hoyt Leave a Comment

Why Check Your Credit Report and Credit Score? Why Wouldn't You?

Sometimes people ignore important warning signs – such as a stop sign, the expiration date on their yogurt, or that rapidly spreading rash. You might ignore those signs and come out okay, but why take that chance? Your credit report and credit score act as similar warning signs for your financial health. Ignore them at your own risk.

Your credit report contains your collective credit history as well as your current credit activity. Lenders use algorithms that distill all that information into a single credit score for ranking purposes.

Low Credit Score

A low credit score tells potential lenders that it’s risky to lend money to you. You may not qualify for a credit card or a mortgage loan, or you may have to pay higher interest rates if you do qualify.

You may not get the best offers for life insurance, cell phone plans, or other services where a credit check is required. A low credit score could even contribute to being turned down for an apartment or a job.

If you always make payments on time, why should you bother to check your credit score? You should check it because it’s possible to be responsible with credit and still have a low credit score.

Not Enough Information

If you don’t use credit very often, your credit file may not have enough information for lenders to decide whether to extend credit to you when you really need it – even if you make all payments on time when you do use credit.

Mistakes on your credit report could also give you a lower credit score than you deserve – for example, payments incorrectly listed as late.

However, there’s one overwhelmingly important reason to check your credit report – fraudulent use of your account.

Identity Theft

With all the security breaches and hacks in recent years, there’s a decent chance that identity thieves have access to your personal information.

Thieves could create entirely new credit accounts in your name, run up huge charges, and leave you to make payments.

If you don’t regularly check your report for unauthorized charges or new accounts that you didn’t create, you may not know about them until bill collectors come in search of payment.

By then, your credit score could be ruined, and you’ll spend months straightening out the mess.

Monitor Regularly

By monitoring your credit score regularly, you’ll notice the factors that make your score rise and fall. This will help you quickly spot trouble.

If your score suddenly drops without any valid reason – such as a large credit purchase that pushes you close to your limit – you know that you need to check your credit report as soon as possible.

The five main factors that make up your credit score are:

Payment history;
The percentage of your available credit that you’re using;
The age of your credit accounts and the length of time since each account was last used;
The mix of active credit types that you have;
And the amount of new credit you are applying for.

Best Scores

For the best credit score, you need to make all your payments on time, use a small amount of available credit, maintain accounts and use them regularly, have a suitable mix of credit types, and limit applications for new credit.

Now you have no excuses. You know what affects your credit score. You know the importance of monitoring your credit score for unexpected drops and checking your credit report for mistakes or signs of fraud. You have the free resource to make these checks.

Set up a regular credit-monitoring plan and stick to it – and watch out for life’s other warning signs as well.

You may be able to ignore stop signs, icky rashes, and ugly credit reports for a while, but eventually you’re likely to face unpleasant consequences. And remember: Life’s too short for yucky yogurt.

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How to Really Do a Background Check on Yourself

June 1, 2018 By Tamila McDonald Leave a Comment

As many as one in three adults has an arrest record — and these details can show up on a background check, hurting your chances of landing a job, securing an apartment, or even entering certain professions.

In total, about nine out of 10 employers run a criminal history check on applicants, typically after obtaining permission from the applicant.

However, landlords can conduct certain background checks without explicit consent, so knowing what’s in your record is essential.

Try Not to Pay for It

Typically, if you try to find a resource for a self-background check online, you’ll be inundated with paid sites.

Not all of those services are created equal, so don’t be impulsive about signing up for one that charges money. First determine whether you can get the same information free of charge.

Some areas provide access to court records online at no cost, but not all. Find out what might be available by heading to the websites of the local government organizations nearest you.

Check It All

You’ll need to check county, state, and federal courts to get a complete picture, which can be time-consuming.

However, if you know you have prior convictions or arrests, it can be worth the effort.

That said, some districts require you to pick up the records in person, so you may need to prepare to head to the courthouse in those cases.

Driving Abstracts

Typically, getting a copy of your driving record is fairly easy. Usually, you can head to your local Department of Motor Vehicles and request a driving abstract.

Although there’s often a small fee for obtaining a driving abstract, it contains helpful details on vehicle-related crimes, such as moving violations.

However, this information only concerns the state where you requested the driving abstract. If you’ve previously had a driver’s license issued in another state, you’ll need to obtain a driving abstract from that location.

Credit Reports

A credit report in itself is a form of background check. Luckily, you can access copies of yours from all three bureaus — Experian, TransUnion and Equifax for free once a year through the website Annual Credit Report, which essentially redirects you to each of the aforementioned companies.

You can also obtain free copies of information on your credit report by signing up for an account on such sites as Credit Karma, Credit Sesame, Free Credit Report, Free Scores Online, Credit.com and Check Free Score.

While these sites don’t limit you to just only one check per bureau each year, the information you get is more of a synopsis than copies of your actual reports. However, the data is detailed enough to suffice as part of your self-background checking.

Google Search

Sometimes, a simple Google search can yield information on your background. You’ll need to put in a few details, athough you can start with just your name to see what comes up.

Often, if your name is particularly common or you share a moniker with someone famous, you’ll need to key in more information. This can include your age, state of residence, or similar details.

Keep in mind that a Google search usually isn’t going to provide comprehensive results. However, it lets you know what other people see if they put your information into the search engine.

Social Media

Like Google search, social media will only provide you with a partial picture; but it does give you some helpful information.

You’ll be able to see what a potential employer or landlord will see when upon entering your details, giving you a chance to review it in advance.

Unfortunately, if you see something you don’t like, it can be challenging to get information removed that someone else posts. Friends and family members may be open to untagging you if you’re in a picture that isn’t flattering, but there’s no guarantee.

You can untag yourself on Facebook, even in other people’s photos, but getting it taken down entirely isn’t so easy — try being as candid as possible with the person about why you want it removed. Otherwise, if the poster isn’t willing to honor your request, the material might stay put as long as it doesn’t break any rules on the platform.

Paid Criminal Background Check on Yourself

If you want a better picture of what employers may see, you might find it convenient to simply pay for a service. Just keep in mind that not every site is reputable, and some don’t allow self-background checks.

One site worth checking out is GoodHire. The cost is reasonable — approximately $20 — and it adheres to all federal and state standards.

While some other online searches may be cheaper, it’s safer to spend a little more on a company with a solid reputation.

Thorough Background Check on Yourself

By following the tips above, you can conduct a thorough self-background check.

If you spot any errors, you’ll need to research reporting procedures for each organization to ensure corrections are made.

Readers, have you ever run a background check on yourself? Tell us about your experiences by posting in the comments section beneath this post.

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Bad Credit? Get Approved with the Shopping Cart Trick

April 6, 2018 By Jackie Cohen Leave a Comment

Shopping cart trick -- here is how to do it

With every interest rate uptick, lenders and card companies get stricter about approvals. If your credit score falls below 600, you’re likelier to be rejected when you apply for financing — unless you try the so-called shopping cart trick. Here’s how to do it — and where.

It involves applying for store-branded cards that tend to give approvals before checking your credit reports first.

When you apply for a credit card and your credit report is checked, it’s referred to as a hard inquiry or hard pull, meaning you initiated it.

This has more of an impact on your credit score than a soft inquiry or soft pull, which is when a credit card issuer pre-approves you for a card ahead of marketing the card to you.

Where It Works

As of this writing, the shopping cart trick only works when you shop online at retailers that work with Comenity bank — the following 20 of them, to be exact:

How To Do It

Here are a few things to keep in mind as you do the shopping cart trick on any of the aforementioned sites.

You may need to turn off your popup blocker. Otherwise, you might not see the credit offer.
Shop the site and add some items to your cart. Then, begin the checkout process.
Enter your address in the proper fields, making sure it matches the address on your credit report exactly.
Next, continue through the checkout process and wait for the offer to display.
Typically, the offer will show up before the final payment phase. If it doesn’t, you may either need to make sure you chose to opt-in for promotional emails, that your popup blocker is off, and then repeat the process.
If it still doesn’t work, then the shopping cart trick may no longer be valid on that site.
If you see an offer, choose to accept it and complete the application.
Make sure to read the fine print thoroughly to make sure a hard pull isn’t part of the process.
Usually, if it only requests the last four digits of your Social Security number, then it won’t perform a hard pull, but it’s best to verify that.
However, asking for your full Social Security number doesn’t guarantee a hard pull is coming, hence why reading the fine print is important.
You don’t have to finish your purchase to be given credit, so you can choose to abandon your cart once your application is complete.

The Shopping Cart Trick and Your Credit Score

It’s important to realize that any new form of credit impacts your report and score, so take that into consideration before opening new accounts.

Ultimately, using the shopping cart trick can help you get credit with greater ease. Just make sure to use it responsibly, or you may damage your score further.

Readers, have you ever tried the shopping cart trick — and if so, how did it go down?