"There can be no real individual freedom in the presence of economic insecurity." - Chester Bowles

SavingAdvice.com Blog

Bridging the gap between saving money and investing

credit score

You Thought There Were Only 3 Credit Bureaus – Wrong!

By Leave a Comment

<img src=" Only3creditbureaus.jpg" alt”creditcardsinthebackpocketofbluejeans">

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.

Read More

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

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Why You Should Check Your Credit Report and Credit Score

By 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.

This article was provided by our content partners at MoneyTips. Photo ©iStockphoto.com/HbrH

Read More

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

How to Really Do a Background Check on Yourself

By Leave a Comment

<img How to REALLY Do a Background Check on Yourself.jpg" alt”persontypingonlaptopsittingonhislap">

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. 

Read More

Looking for more great articles? Here are a few to get you started:

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

Bad Credit? Get Approved with the Shopping Cart Trick

By 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.

  1. You may need to turn off your popup blocker. Otherwise, you might not see the credit offer.
  2. Shop the site and add some items to your cart. Then, begin the checkout process.
  3. Enter your address in the proper fields, making sure it matches the address on your credit report exactly.
  4. Next, continue through the checkout process and wait for the offer to display.
  5. 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.
  6. If it still doesn’t work, then the shopping cart trick may no longer be valid on that site.
  7. If you see an offer, choose to accept it and complete the application.
  8. Make sure to read the fine print thoroughly to make sure a hard pull isn’t part of the process.
  9. 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.
  10. However, asking for your full Social Security number doesn’t guarantee a hard pull is coming, hence why reading the fine print is important.
  11. 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?

Take Your Credit Score From 480 to 650 or Higher

By Leave a Comment

If you have seriously damaged your credit or have not started to build any credit, you may be wondering if there are any ways to quickly and drastically improve your credit score.  Let’s say you have a 480 credit score, for example, and need to bring it up to at least 650 before you can apply for a loan.

Are there any steps you can take to make that happen?

Knowing Your Score

When you look at your credit score, it is important to know how much each contributing factor impacts your score. As you can see in the graphic below, payment history and balance owed are the two most important things to keep in mind when trying to improve your score. The remaining 35 percent of your score is made up of credit history (most blemishes take about seven years to fall off your report), the types of accounts open (creditors would like you to have open credit in various different categories, i.e. auto loans, credit cards, student loans, etc), and new credit accounts.

If you have a 480 credit score, for instance, you’d look at your credit report to likely see some poor-to-fair payment history or a high balance owed. You may also not have that much credit history to go off of, especially if you are young. This can negatively impact your credit as well (but not as much as the other contributing factors).

So, how do you use this information to help improve your credit score?

Sticking with the example above, if you are trying to raise your credit score by 100+ points, you’ll need to have a plan of attack. While there is no set process for bringing your 480 credit score up, there are a few things you can consider changing to increase your score:

  1. Know your score. Consider downloading a free tool like Credit Karma or Chase’s Credit Journey or a similar app that allows you to monitor your credit. Once you see your score and know where you are you can begin to take action and improve your score. Remember to look at your credit report critically and identify any items that may be fraudulent.
  2. Save some money. There is always a huge debate in the finance world when it comes to whether you should save or pay off debts first. If you don’t have any money in savings you’ll need to establish emergency savings before tackling any of your debt. Your 480 credit score will only get worse if you have to continue taking out loans or credit cards for emergencies. If you’re having trouble saving, you may consider selling some of your old stuff for extra cash.
  3. Start making payments. After you have an emergency savings account started then you can start making payments. You’ll want to pay more than the minimum monthly payment and, if you can, pay the debt off completely. As you know from the graphic above, having an overall lower balance owed will improve your score significantly.
  4. Set payment reminders. A huge portion of your credit score is attributed to your payment history (about 35 percent). If you chronically pay your bills late your score will go down. Setting up payment reminders or automatic withdrawal is a great way to make sure your payment history isn’t negatively impacting your credit.
  5. Once you’re able, pay things off completely. If you’ve been paying on things each month and your balances are getting more manageable, pay them off. Having completely open lines of credit will help you repair your credit drastically.
  6. Keep your old accounts open. Remember, if you pay an account off it is better to leave it open and unused than to close it. Closing an account can actually negatively impact your credit.
  7. After you make progress, consider getting new lines of credit. After you’ve saved some cash, paid items off and established a better payment history you may want to consider opening new lines of credit. (You do need credit to have a good score.) You may find it difficult to find lenders, especially if you recently had a 480 credit score. If that is the case, consider a secured credit card or other secure debts. If you maintain the good payment practices mentioned above, a new credit account will help improve your score tremendously.

Build Your Credit Score From 480 to 650 With Small Changes

Maybe your score is better than 480, but could still use some work. If this is the case, there are a few smaller changes you can make to improve your credit score:

  1. Don’t max your credit cards out. Maxing out your card every month (even if you pay it off) will not help improve your credit. It is recommended that you keep your credit card at 30 percent of its limit. So, if you have a $10,000 credit card you would only ever spend up to $3,000 on it.
  2. Become an authorized user. If you’d like to increase the amount of credit available to you (about 10 percent of your credit score makeup), then becoming an authorized user on a credit card may help. Usually you will have to find a relative or friend willing to allow you access to their card, which can be hard. But it can be a great way to bump your score up a little if you both pay the bill on time.
  3. Ask for a credit limit increase. Increasing the amount of credit you have can help increase your score a bit too. Similar to the previous point, upping the amount of credit available to you can improve your credit score. It is important to keep in mind, however, that you shouldn’t start to over-use your new credit. Spend the same amount you would have before the credit increase.

Things to Keep in Mind

Whether you have a 480 credit score or no credit at all, it is important to remember that communication is key when it comes to creditors and debt collections agencies. If you hit a hard spot financially, talk to the lender. Oftentimes, they will work with you on a payment plan or even defer payments if possible. When you begin to ignore their calls and cease communication, you make it harder for them to help you.

There Are No Shortcuts

Also, keep in mind that increasing your credit score won’t happen overnight. In fact, it will likely take months to improve your score by 100-150 points. It is important that you don’t become discouraged and continue to work on improving your credit score. By just changing a few things in your day-to-day life, you’ll be on the road to good credit in no time.

Having Good Credit Makes You Feel Great

Lastly, getting your score from a 480 to a 650 makes you feel great.  Your borrowing costs are lower, your self-respect is higher, you are in charge of your personal finances and you are a making the right decisions to improve yourself.  You are in effect a more financially savvy and disciplined person. So, there are lots of reasons to improve your credit score.

How Paying off Installment Loans Affects Your Credit Score

By Leave a Comment

paying off installment loans
You may have recently paid off an auto or student loan and noticed that your credit score changed. While it’s well known how credit card debt can affect your credit score, the subject of installment loans isn’t quite so clear. Let’s get into how installment loans affect your credit score.

What is an Installment Loan?

First of all it’s important to understand what types of loans are considered installment loans. Installment loans are loans in which the lender has set up a fixed payment over a certain period of time. An auto loan would be a prime example, where for instance the payments are $400 for 60 months. Other common examples of installment loans are mortgages, student, and home equity.
The important thing to note is that they differ from credit cards in that the debt balance doesn’t typical fluctuate on a monthly basis.

How Installment Loans Factor into Credit Scores

When an installment loan is reported to the credit bureaus, it’s treated differently than a credit card when it comes to calculating your credit score. This is because the risk profile on an installment loan is generally less, and therefore it has less of an initial impact on your credit score.

The key difference between how installment loans impact your credit is that installment loans are typically secured by some asset. For example, an auto loan is secured by the vehicle and if you don’t make the payment it will be repossessed.

If you are looking for information about paying off debt and improving your credit you may enjoy: 

Will Paying off an Installment Loan Improve My Credit Score?

While installment loans typically have less of an impact on your credit score than credit cards, you will still likely see a modest increase in your credit score when you pay off a loan. Another way to look at this is that having large installment loan balances isn’t likely to dramatically affect your credit score.

It’s much more important that you make sure you’re never late on a payment than the actual balances. At least as far as your credit card is concerned. That said, there is nothing wrong with paying off an installment loan and it certainly won’t hurt your credit score.

What to Consider Before Paying off Installment Loans

Before you consider paying off your installment loans in order to improve your credit score, you should consider taking care of items that have much more of an impact on your credit score.

When it comes to improving your credit score, the most impactful actions you can take are to pay down credit card balances, maintain a mix of loan types, and remove collections, late payments, and other negative entries on your credit report.

Bio

Ryan Greeley is the author of The Better Credit Blog, a website dedicated to helping people improve their credit.

Photo: GotCredit