Credit Reporting 101

Let's take on the fundamentals of the credit reporting system. From the big three credit bureaus, TransUnion, Equifax and Experian, to your rights under the Fair Credit Reporting Act, this article will help you navigate the credit report maze.

The credit reporting agencies - TransUnion, Equifax and Experian (formerly TRW) are the three national credit reporting agencies that keep records on consumers. The reporting agencies work with lenders, creditors, insurers and employers to update and distribute your information to the appropriate institutions. Here's an example of how the system works:

1. When you apply for a new credit card the creditor requests a copy of your financial history from the reporting agencies. This causes a "hard inquiry" to be recorded on your credit report.

2. The creditor uses your credit reports and scores along with income and debt information to determine what rates to offer.

3. You start to use the new credit card and the creditor reports your activities to the credit reporting agencies about every 30 days.

4. The credit reporting agencies update your credit report as they receive new information from creditors or lenders.

5. Your credit profile changes based on your financial activity. The next time you apply for a credit card or loan, the process repeats.

Your credit report - Your credit report is divided into six main sections: consumer information (address, birthday and employment), consumer statement, account histories, public records, inquiries and creditor contacts. When you open a new account, miss a payment or move, these sections are updated with new information. Old negative records will stay on your credit report for 7-10 years. Positive records can remain on your credit report longer. Not all creditors report to all three agencies and the agencies obtain their data independently so your reports from TransUnion, Equifax and Experian could be substantially different from each other. That's why it's important to check your three credit reports every 6-12 months to ensure that the information is accurate and up-to-date.

Correcting inaccuracies - Under the Fair Credit Reporting Act, consumers are protected from having inaccurate information on their credit reports. If you find an inaccurate record on your report, try contacting the creditor or lender associated with the mark first. These companies can usually correct the mistake and send an update to the credit reporting agencies. If you can't make progress this way, you can also dispute the inaccuracy directly with the credit reporting agencies.

Working the system - Managing your credit and maintaing a good credit history can lead to better rates on major purchases. We recommend that you check your credit reports every 6-12 months or at least 3 months before a major purchase in order to guard against damaging inaccuracies and identity theft. Routine check-ups along with paying your bills on time, keeping your credit card balances below 35% of their limits and correcting any negative inaccuracies will help you maintain a healthy credit profile.

Financial Education Services (FES) and FES Protection Plan

VR Tech announces name change to Financial Education Services

At the first annual National Convention in Atlanta, GA in February 2010, VR Tech Marketing Group announced the name change to Financial Education Services (FES) to better identify the mission of the company and related product line.

Coral Springs, Florida (PRWEB) March 5, 2010 -- VR Tech Marketing Group, in order to better identify it mission, products and services, announced a name change to Financial Education Services (FES).

VR Tech Marketing Group, now Financial Education Services (FES) has been in successful operation for over 7 years. FES has worked with consumers since 2003 to help educate consumers about the importance of credit as well as providing resources to help consumers improve and maintain there credit rating.

Financial Education Services over the years has continued to build it's product line by adding products that enhance the credit restoration process. FES recognizes that the key to helping someone that has credit issues requires more then just deleting derogatory items from the credit report.

Some on the enhancements include the VR Tech Prepaid MasterCard as well as the UltraScore program. The prepaid MC offers an unsecured minimum line of credit that is acquired by applying a direct deposit from an employer to the consumers card. This ensures the repayment of the unsecured line as well as building good payment history.

UltraScore provides a comprehensive credit analysis for the consumer as well as an "Action Plan" to help the consumer understand all the components of there credit profile and what they need to do in order to maximize there credit in the most efficient manner.

Another major announcement that was made a the National Convention was the creation of the YFLF (Youth Financial Literacy Foundation) and the YFL (Youth Financial League) designed to help teach youth the importance of being financially literate. This program is geared toward youth ages between 8 to 18. This program will provide interactive web based teaching modules. Youth that complete the financial curriculum will be eligible for educational scholarships.

As well introduced was the launch of the FES Protection Plan. The FES Protection Plan is holistic approach to help consumers protect all areas of their finances and includes: Positive Credit Builder, Identity Theft Protection, Estate Planning, FES Debtzero.

FES Debtzero is a web based application that helps consumers to establish a clear and precise method of eliminating personal debt, secured or unsecured, in the most effective way. This tool will show the consumer how to repay there debt while creating discretionary income for savings.

Financial Education Services (FES) with it's long history of success as a company and very high valued products is positioning it self to be a major player in the revitalization of the economy by address the issue of financial illiteracy in communities all across the country.

For additional information about how you can on Financial Education Services (FES) please contact Mark Bustamonte at 954-707-2932 or visit https://www.myfinancialeducationservices.com.

About Financial Education Services (FES):

Mark Bustamonte is a Sales Director for Financial Education (FES) services and has been a member since 2003.

Contact Info

Mark Bustamonte, Sales Director Financial Education Services 954-707-2932 http://www.myfinancialeducationservices.com http://www.primefinancialcreditservices.com http://www.financialempowermentnetwork.com

Important Information To Check In your Credit File

Most people focus exclusively on the negative trade lines reporting on their credit file.

The following is some other important data that should be considered as well, courtesy of MSN:

Are your employer and your job title listed? If you've had the job less than two years, your previous employer and job title should be listed as well.

Is your address listed and correct? If you've been there less than two years, is your previous address listed as well?

Is your Social Security number listed and correct?

This is the way most lenders will identify you.

Is your telephone number listed and correct? Many lenders may not extend credit if they can't call you to verify information.

Does your report include all the accounts you've paid on time? Some lenders don't report regularly to credit agencies, and some report to only one or two, rather than all three.

You can ask the creditor to report the account to an agency that doesn't list it. If the creditor refuses or doesn't respond, you can send a letter to the agency with a copy of your latest statement and canceled checks to prove you've been paying on time.

Financial Empowerment Network Team and Prime Financial Credit Services

Loan mods are unintended "score mods"

A 12/28/09 article in Money.Cnn.com showed that even if you are current on your house payment, a loan modification will sometimes be calamitous to your credit score. How does this happen? First off, most loan modifications have a trial period that you are expected to perform in. If you fail to make timely payments for the first 3 to 6 months, then the modification attempt is terminated and the bank will again pursue foreclosure.

During that trial period your Note has not been officially modified, so you are, by definition, on a partial payment plan. Whether it is a partial payment plan on a credit card or a mortgage, it makes no difference. When the lender enters that data to the credit bureaus it will show negatively on your credit. Next, let's suppose you complete the trial period successfully. Once your loan modification plan is accepted, you may still have a delinquent balance carrying forward. This delinquent balance will also serve as a negative mark against your credit even though you are "paying as agreed" based on the loan modification terms.

I don't think the banks are ignorant of the affect these policies have on consumers. Lower credit scores are the pathway to charging higher rates and fees and a loan modification is just one avenue that provides a bank with that opportunity. There is a lot of give and take throughout the loan mod process along with expressed and implied terms. If you think your score has been damaged by a loan modification - remember this, the burden of proof for reporting correctly is squarely on the shoulders of the credit bureaus. To find out how to "audit" the information on your credit reports please visit my affiliate link site.

George Andersen is a member of the Financial Empowerment Network Team and Prime Financial Credit Services
you can also visit Credit Educationfor more information on George Andersen.

Understanding Your Credit Report

A credit report contains all your information that is reported to the three credit bureaus. The three credit bureaus are Experian located in Chester, PA; Equifax located in Atlanta, GA; and Equifax located in Allen, TX. The information reported to the credit bureaus is your payment history that contains the following information:

Personal Information - the personal information on the credit report lists the basic information about the individual. None of the information listed in the personal information effects the credit score calculation. The personal information on the credit report contains any name used, birth name, AKA or any name the creditor has used when applying for credit. The date of birth, current and previous address, employment history, and the dates the information was reported are also listed, credit report.

Summary - the summary section of the credit report contains a categorized list of all the accounts on the credit report. This synopsis allows the viewer a quick review of the credit report and compares the data that is reported to the three credit bureaus.

Account History - The account history on the credit report contains all the account a person has open or closed. This section has credit history of your payments. Each of the account will contain: Account Number, Account Type, Creditor Name, Monthly Payment, Highest Balance Owed, Credit Limit or Loan Amount, Date Open or Closed, Payment History, and if it is a joint or individual account.

Inquires - the credit report contains two types of inquires. The first type of inquire on the credit report is inquires where a business pulled the credit and the second type is when an individual applies for credit. When you apply for credit it remains on your credit report for two years. When you show a history of declined credit applications it makes you look desperate. More than likely a lender will not loan money to a desperate person. Multiple approved applications send a different message. When you're approved for a loan or a line of credit, the lender has made a commitment to loan you the funds. Your ability to repay these lines of credit and loans depends on your income. Your capacity to take on additional debt is diminished by the amount of debt or potential debt outstanding.

Public record information - Public records on a credit report may include information such as judgments, foreclosures, lawsuits, wage attachments, bankruptcies, state and federal tax liens, and past-due child support. This information is reported by county, state, and federal courts to a variety of credit reporting agencies. The agencies retain the information in a credit report and use the information along with other pertinent credit data to determine your credit score. Since public records reflect poorly on your credit rating, you'll want to make sure that this section of your report stays spotless. This information will remain on your credit report for seven years. However, if the record relates to bankruptcy, it will remain on your report for 10 years.

I am a member of the Financial Empowerment Network Team and Prime Financial Credit Services

Mistakes and Other Inaccurate Information

Mistakes and other inaccurate information on your credit report aren't your fault and in a perfect world, wouldn't affect you.

Our world is not perfect, however, and while you may not be responsible for some or all of the questionable items on your credit report, you are probably being held accountable for them.

The Fair Credit Reporting Act gives you the right to contact credit bureaus directly and dispute items on your credit reports. Just as in a court of law, you have the right to plead "not guilty" to questionable information on your credit reports, and leave the burden of proof to the credit bureaus.

You can dispute any and all items on your credit reports that you feel classify as inaccurate, unverifiable, or misleading. If the bureaus can not verify that the information on your reports is indeed correct, then those items must be deleted.

I am a member of Financial Empowerment Network Team and Prime Financial Credit Services

Your Credit Score Is Yours to Control

Are you confused by credit, and how to create a better credit score? Don't feel bad, many consumers and business people find it hard to understand why their credit score is low. They pay their bills. And when they are a little late on a payment, they pay extra fees to the Lenders to make up for that. The Lenders enjoy great profits, and yet, the Borrower gets penalized more. Is it fair? I say NO! Enough! It's time for us to take control of our credit scores, and get them to reflect accurately, what kind of people we really are. In fact, the United States government agrees. Toady, there are laws to protect us, and allow us to take back control of our credit histories and credit scores.

Use these laws to make sure you aren't forced to pay more for auto loans, credit cards, mortgages, insurance and utilities. Besides costing you more money in monthly bills, we've been hearing more about people who get job offers that are later taken back, because of a "bad" credit score, a result of having been out of work for a year or longer. They didn't use credit to support a luxurious lifestyle. Ironically, they are penalized by taking away the very thing that they need to get back on their feet and to get back to paying their bills. Is it just me, or does it seem ridiculous to you as well? Credit reporting agencies, and Lenders, seem to believe that it's their right to penalize consumers to any level that they choose. The US government says it isn't their right. It is their right to report late payments and defaults on payment agreements, to the extent that they report it accurately. Is the information on your credit report accurate?

Frits Tessers is a member of the Financial Empowerment Network Team and Prime Financial Credit Services
you can also visit Personal Coaching for more information on Frits Tessers.