Spring Cleaning for Your Finances: Cleaning Up Your Credit Report

Welcome Spring by giving your credit report a good deep clean. 
 
Odds are good that you are paying more in interest on loans than you could be.  Why not take a few hours this spring and work on cleaning up your credit report. 
 
Here is what you can do today:
 
Order your three credit reports and scores
Each of the three major credit bureaus – Experian, Equifax and TransUnion – maintain separate credit reports and scores. Checking your credit on a consumer website like Credit Karma or Experian does not affect your credit as a hard inquiry, therefore you should be reviewing your report at least 4 times a year.
 
Review reports for mistakes
Errors in your credit reports can cause your scores to be lower than they should be – and fixing them can be a quick route to a better score, which can save you money on loans or insurance. This is why it is important to review all three reports to fix any inaccurate or incomplete information.
 
Improve a bad credit score
Why live with bad credit when our team of Certified Credit Consultants can help you rebuild your credit and provide you the knowledge to ensure that you maintain it for the rest of your life.
 
Call (800) 822-7120 or schedule a free consultation today. Your credit report can be cleaned up in as little as 45 days.
 

-Erik Kaplan

Why are your FICO® Scores different for the 3 credit bureaus?

In simple terms, A FICO score is a three-digit number that lenders and credit card issuers use to predict how likely you are to repay them if they grant you credit. The company uses a proprietary formula and has various scoring models.
Because the data that goes into the model could come from three different national credit bureaus (Equifax, Experian and TransUnion) it creates the likely possibility of having three different scores.
Here are some points to consider when comparing scores across bureaus:
  • Not all credit scores are “FICO” scores. So, make sure the credit scores you are comparing are actual FICO Scores.
  • Access all 3 FICO scores at the same time. A differentiation in time could result in score differences due to time based components in the scoring model.
  • Not all information is supplied to all three credit bureaus. It’s up to lenders to decide which information they report to the major credit agencies – and which agencies they report to in the first place.
  • There is a possibility that you have credit under different names which may cause incomplete files at the credit reporting agencies. Typically, the credit bureaus combine all files accurately under the same person, however there are many instances where incomplete files or inaccurate data (social security numbers, addresses, etc.) cause one person’s credit information to appear on someone else’s credit report.
  • Lenders report credit information to the credit bureaus at different times, resulting in one agency having more accurate information than another.
  • The credit bureaus may record, display or store the same information in different ways.
If you want to track your score over time, you’ll want to use the same brand of score and the same version of it as well. That controls for differences due to which bureau’s credit report is used and which formula interpreted it.
If you have questions about your credit score, reply to this email or give me a call at (800) 822-7120.

-Erik Kaplan

New standards will strip all tax liens from credit reports

Because of improved standards for utilizing new and existing public records, the three major credit reporting companies will be deleting and excluding all tax liens from credit reports. That means consumers who’ve missed a tax payment will no longer be penalized for that when applying for loans.
 
This change went into effect on April 16th 2018 and is the result of a study by the Consumer Financial Protection Bureau that found problems with credit reporting and their recommended changes to help consumers.
 
What does this mean? The reporting agencies will remove any remaining tax lien data from consumer credit records.
 
Credit reporting and scores play a key role in most of our lives. Whether your report is affected or not, be sure to check your credit reports from all three bureaus to ensure the information is accurate.
 
If you have a tax lien or a judgement on your credit remaining at the end of this month, contact us and we can have it removed for you!

 

-Erik Kaplan

Tax Liens and Civil Judgments: What is changing and how it affects your credit report.

On July 1, 2017, the three national credit bureaus are going to stop collecting and reporting substantial amounts of civil judgment and tax lien information.  

In fact, the credit reporting agencies will remove this data from reports if the information does not provide complete details on consumers i.e. person’s name, address, Social Security number, or date of birth.

What are tax liens and civil judgments? 

Tax liens are levied against properties when the owner is delinquent on payment of taxes. Civil judgments are ordered by courts in legal disputes, typically involving monetary damages – debts owed by the losing party. Tax liens and civil judgments negatively impacts your credit scores and remain on credit files for extended periods.

How this change will affect you?

A study by credit scoring developer VantageScore Solutions which was created by the three credit bureaus, estimated that 8 percent of consumers would see an average score increase of 10 points on its most widely used scoring model if all civil judgments and tax liens were removed from credit reports. While 8% and 10 points may sound small, in the mortgage business they equate to significant numbers for applicants.

When this information appears on credit reports, it can affect your ability to obtain credit, loans or receiving consideration for employment. This change is a step in the right direction of minimizing the impact of non-loan related items on your credit score.

THD Credit can help!

If you have tax liens or civil judgments appearing on your credit report, give me a call or email me.  We can check out your options for getting them removed sooner.

-Erik Kaplan

Coming Soon!

What happens AFTER you file for bankruptcy?

Keeping track of your credit is a crucial step in rebuilding your credit profile, especially after a bankruptcy.  Let’s take a closer look at what happens, after the dust has settled.

Q:  What happens AFTER you file for bankruptcy?

THD Expert:  When you file for bankruptcy, the law says that you must list all of your debts, even if you plan on continuing to pay them. You pick and chose what debts you want to continue paying- such as the house if you want to live there or your car if you need it to get to work.  But you don’t pick and chose what debts are covered.  When a creditor is notified about your bankruptcy, they then report to the credit bureaus that a particular loan was “included in bankruptcy.” At that point, creditors stop reporting the payments you continue to make, such as for a mortgage or car payment. This explains why payments don’t show up on credit reports.

Q:  So why is the information on your credit report wrong?

THD Expert:  If the credit bureaus worked for you and me, rather than the creditors, it would probably look more like this: The credit bureaus would report your house payments as long as you are current, but they come off if you get behind. Unfortunately, we don’t make up the rules. 

Q:  How can you make credit bureaus report your payments?

THD Expert:  Start off by requesting a payment history from your lenders (such as the mortgage company or car finance company), and use it to dispute the incorrect entries. Lenders are required by law to give you a payment history once per year if you request it.  Next, take this payment history and use it to dispute the missing payments on the loan with each of the 3 credit reporting agencies (Equifax, Experian  and TransUnion).

Unfortunately, you may have to do this every year as the lender may not start reporting your payments even after you have successfully disputed it.

Now that you know why payments are not showing up after filing for bankruptcy and what you can do about, you can take steps to fix it. 

If you’re need help, or have additional questions give me a call or email me today.

Erik Kaplan
CEO, THD Credit Consulting
erik@thdcreditconsulting.com
Phone: (800) 822-7120

Do you have questions you would like to submit to the THD Credit Experts?  Email your question to: asktheexpert@thdcreditconsulting.com

Coming Soon!