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free-credit-report

Why Do the Credit Scores I Pull Look Different Than the Ones My Lender Pulls?

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Why Do the Credit Scores I Pull Look Different Than the Ones My Lender Pulls?

“Help! I’m really confused! I got all 3 of my credit scores online last week and they looked really good. Today I applied for a mortgage and the scores the lender pulled look totally different. All 3 scores are about 50 points lower than the scores I saw online. Thankfully, my scores were still high enough to get a mortgage loan, but why are the scores so much lower today?”

In the credit world there are few things which frustrate and upset consumers more than discovering the sometimes vast difference between consumer credit scores and the credit scores used by lenders. Popular TV commercials for credit monitoring websites often confuse consumers and lead them to believe that they have only one credit score. However, the truth is that there are actually hundreds of different types of credit scores. The idea that you have one "official" credit scores is a complete myth.

Consumer Scores Vs. Lender Scores

While there are hundreds of credit scores available, most of these scores can be boiled down into one of 2 categories - consumer scores or lender scores. (Insurance companies often use credit based insurance risk scores as well, but for the purpose of this article those scores will fall into the "lender" category as well.) Consumer scores are scores that are accessible to you individually. You can purchase these scores from the credit bureaus directly, from FICO directly, or from a host of consumer credit monitoring websites. Some websites will offer you free credit scores in exchange for signing up for a trial offer of their credit monitoring services. Other websites will offer you a free score from 1 of the 3 major credit bureaus (not all 3) in exchange for your email address and the right to advertise financial services to you. CLICK HERE if you would like to compare websites where you can access your 3 consumer credit scores.

Lender scores are almost always some version of a FICO score. There are some lenders which have begun using VantageScore credit scores (a score created by the credit bureaus themselves) in recent years, but FICO is still the most popular lender score in use today by a landslide. Both FICO and VantageScore have released multiple generations of their credit scoring software. Additionally, FICO scores come in many varieties (FICO Mortgage Score, FICO Auto Score, FICO Personal Finance Score, FICO Installment Loan Score, etc.) and each different FICO score variety typically has different versions in use as well. If today you were to pull a copy of your consumer credit scores, have a mortgage loan officer pull your credit scores, and have an auto lender pull your credit score then you have almost a 100% chance of getting a different set of numbers every time. Credit scores can vary pretty wildly depending upon which credit scoring model is being used to calculate them.

Focus On Healthy Credit

If you are feeling frustrated or overwhelmed as you try to keep track with all of the different possible credit scores, you are not alone. Remember the statement above revealing that you have hundreds of credit scores? It would be practically impossible for a consumer to keep track of each one of these scores individually. Instead of spending time and energy focusing on the numbers, it is much better to focus on the health of your credit as a whole.

The fact of the matter is that all credit scores are based upon the same data. Your credit scores are calculated from the information which is contained in your credit reports. (Don't forget, you can get a copy of all 3 of your credit reports, without scores, completely free once a year at www.annualcreditreport.com.) If your credit reports show that you routinely make late payments on your accounts, your scores will suffer regardless of who pulls them or which credit scoring model is used to calculate them. If you have clean credit reports with no collections, no late payments, and low credit card balances then all of your many scores will likely be in great shape. You may have hundreds of scores, but you only have 3 credit reports. You may not be able to control your credit scores, but you can absolutely control your credit management habits.  


michelle-black-credit-expert

Michelle Black is an author and a credit expert with nearly 2 decades of experience, the credit blogger at HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars on various credit and financial topics. She is an expert on improving credit scores, credit reporting, correcting credit errors, budgeting, and recovering from identity theft.




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Where to Get Truly Free Credit Reports and Scores

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Where to Get Truly Free Credit Reports and Scores

The word free can be defined as "without cost or payment, without charge, free of charge, for nothing." However, many of the "free" credit scores and "free" credit reports offered to consumers are not exactly what the average person has in mind when she hears the word free. It is difficult to get something for nothing and often there is a catch of some sort involved whenever a free credit product is being offered.

Before you become too cynical, the truth is that there really are quite a few places where consumers actually can claim truly free credit reports and scores. Check out this comprehensive list of websites where you can currently access your credit reports and/or credit scores online without the necessity of handing over your credit card information to anyone.


Equifax Credit Report and/or Summary
Annualcreditreport.com
Quizzle.com
CreditKarma.com

Equifax Credit Scores
Quizzle.com (VantageScore)
CreditKarma.com (VantageScore)
Mint.com (Equifax Risk Score)

TransUnion Credit Report, and/or Summary
Annualcreditreport.com
CreditKarma.com (Can Update Weekly)
WisePiggy.com (Credit Report Summary)

TransUnion Credit Scores
CreditKarma.com (VantageScore)
CreditKarma.com (TransRisk Score)
WisePiggy.com
Experian Credit Report and/or Summary Annualcreditreport.com
CreditSesame.com (Credit Report Summary and Credit Monitoring)
Credit.com (Credit Report Summary)
Experian Credit Scores CreditSesame.com (Experian National Risk Score)
Credit.com (VantageScore)

The Pros

All of the websites listed above will give consumers free access to their credit report and/or scores without the consumer having to pay a dime. Credit scores and reports wield an enormous amount of control over the life of every US consumer, whether the consumer wishes to acknowledge that fact or not. It is always in a consumer's best interest to keep a close eye on her credit which is why increasing free access to credit reports and scores is always positive for consumers.

The Cons

It is important to understand that, aside from Annualcreditreport.com which is the website that the 3 major credit reporting agencies use to provide free annual credit reports to consumers in compliance with the 2003 FACTA amendment to the Fair Credit Reporting Act, all of the websites listed above are for-profit businesses. They are not charities who are giving away free credit products to consumers out of a sense of altruism. Instead, these companies primarily make a profit by advertising financial services to their users. Whenever someone signs up for one of these advertised products the company will generally receive a commission. Still, being marketed to for products which could likely benefit the consumer financially anyway is arguably a pretty small price to pay for free access to credit reports and scores.

Perhaps the biggest downside to a consumer solely relying upon free credit products to monitor her credit reports and scores is the time which is involved in doing so. As you can see from the table above, there is no single website which offers a consumer free access to all 3 of her credit reports and all 3 of her credit scores. Therefore, in order to monitor all of her credit reports and scores thoroughly a consumer would need to take advantage of multiple offers from multiple websites - a very time consuming undertaking.

The Alternative

For consumers who want an easier, faster way to thoroughly monitor all of their credit reports and scores in one place it may be worth considering a fee-based credit monitoring service. There are several credit monitoring services which offer 3-bureau, 3-score access for a monthly fee. Depending upon the service, these fees generally range from $16.99 per month - $29.99 per month. Also, consumers should be aware that there are quite a few fee-based credit monitoring services that still only provide the capability of monitoring a single credit report and single credit score - something which a consumer can easily do for free at any of the free credit websites above. CLICK HERE for a list of several credit monitoring services currently available to compare fees and services before choosing the best fit for you.

The Moral of the Story

Mistakes on credit reports happen more often than most consumers realize. In fact, the FTC released a study in 2013 which proposes that as many as 1 in 5 consumers have errors on their credit reports. However you choose to do it, the fact of the matter is that you should be monitoring your credit reports and scores and you should be doing so frequently.







michelle-lambright-black-credit-expert

Michelle Black is an 13+ year credit expert with HOPE4USA, the credit blogger at HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, a contributor to the Wealth Section of Fort Mill Magazine, and  a regularly featured speaker at seminars up and down the East Coast. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE Facebook page by clicking here. 



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3 Steps to Protect Your Credit after the Target Data Breach

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3 Steps to Protect Your Credit after the Target Data Breach

The reported number of consumers who were victims of the Target data breach is continuing to rise. Original estimates indicated that 40 million Target customers had their payment information compromised. Now, reports are as high as 110 million consumers who may be victims of the data breach – a breach which includes personal data in addition to payment information. Whether or not we ever know the real number of victims, we can be sure that the data breach is the largest in history.

If you shopped at Target over the holidays then your data was almost certainly compromised. However, it appears that the damage may be even more severe than originally believed. In fact according to several reports, Target customers who had their information stolen may include online shoppers and customers who have shopped at the store at “any point in the past.” Concerned that you may have been a victim of the data breach? Here are 3 steps that you may wish to consider to protect yourself from future fraudulent activity.

1. Step One: Get new credit cards, debit cards, and PIN numbers…yesterday!

Banks are currently issuing millions of new debit cards and credit cards to their customers in the wake of this enormous data breach. Yes, changing your PIN numbers and plastic may be a bit of a hassle but it is nothing compared to the hassle which comes along with fighting fraudulent charges or identity theft. You might have to make a few calls to update your payment information for any reoccurring bills (i.e. gym memberships, satellite television, coffee of the month club, etc.) but the hassle is well worth the protection it will afford you. If any fraudulent charges do occur you will want to be sure to call your bank immediately to alert them. Next, take a deep breath and try not to freak out. You can rest assured that, as long as you notify your bank in a timely fashion, you will not be responsible for the fraudulent charges thanks to a number of consumer protection laws. You should not have to lose a penny out of your pocket.

2. Step Two: Consider a credit freeze, but count the cost.

A credit freeze is a proactive way to help protect your credit reports before identity theft occurs. (NOTE: a credit freeze will protect your personal data, but not your credit card or debit card information.) When you freeze your credit reports you are actually taking the reports out of circulation. Therefore, no future lender will be able to access your credit reports when taking an application for a loan or a credit card. If a scam artist is trying to steal your information to open fraudulent accounts a credit freeze will stop him in his tracks. Keep in mind that you will want to freeze your credit reports with all 3 credit reporting agencies – Equifax, Trans Union, and Experian. There is a small fee to freeze the reports per credit bureau, but that fee can be waived in most states if you have already been the victim of identity theft. It is also possible for you to contact the credit bureaus to remove the freeze from your reports if you need to have your credit pulled for a legitimate purpose in the future. Credit freezes are certainly a hassle, but nothing compares to the effectiveness of a credit freeze for preventing identity theft from occurring.

3. Step Three: Consider credit monitoring, but recognize the limitations.

Credit monitoring offers a reactive type of protection for your personal information. However, like the credit freeze, credit monitoring does not offer any protection from fraudulent charges on your debit cards or credit cards. Credit monitoring does not actually do anything to prevent identity theft either, but rather informs you that identity theft has already occurred. Target recently announced that it will be offering free Experian credit monitoring to the victims of its data breach for one year. Unfortunately, credit monitoring with one credit bureau is simply not enough to help identity theft victims properly monitor for fraudulent accounts since it is important to monitor all 3 credit bureaus for any unauthorized changes. (CLICK HERE to compare a list of credit report and credit score monitoring services currently available.) Being the last to know that your information has been stolen is not always terribly helpful. However, it is certainly better to know last than not to know at all.


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About the Author

Michelle Black is an 12+ year credit expert with HOPE4USA, a published author, the credit blogger at www.HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, a contributor to the Wealth Section of Fort Mill Magazine, and  a regularly featured speaker at seminars up and down the East Coast. She is an expert on improving credit scores, budgeting, and recovering from identity theft. You can connect with Michelle on the HOPE Facebook page by clicking here.  

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Free Credit Report

Free Credit Report – No Strings Attached - No Credit Card Required!

By Michelle Black

Did you know that you are legally entitled to receive a free credit report every single year from all 3 of the credit bureaus (Equifax, Trans Union, and Experian)? Simply visit www.annualcreditreport.com to request your free report once every 12 months with zero strings attached!  Trust us, we have checked it out. Now, unfortunately, this free report does not provide you with free credit scores (though you can pay to access your credit scores as well).  However, even though you will not be able to receive your credit scores for free, the free credit file disclosure report will show you 100% of the account currently on your file.

You may wonder why it is important to check your credit report in the first place.  Well, there are actually several important reasons:

1.  Protect yourself from fraud – Checking your credit report once every 6 months will dramatically reduce your chances of identity fraud.  If you check your credit report and discover “fishy” accounts then you can speak with a HOPE Credit Specialist for some expert advice and you may even be advised to file a police report.

2.  Protect yourself from credit bureau mistakes – Let’s face it.  The credit bureaus make mistakes and those mistakes can cost you, big time! Checking your credit report every 6 months will help you to monitor your file for incorrect accounts or incorrect information being reported.

If you do check your credit report and find errors, identity fraud, or other credit issues please know that all hope is not lost. There is still a way to turn your current credit situation around and achieve healthier credit scores! The HOPE Program has been helping people just like you to deal with credit problems for over 10 years. In fact, the average HOPE member graduates our program within 6 months or less!  Call us today at 704-499-9696 to schedule your NO-OBLIGATION credit analysis with a HOPE Credit Specialist. You have nothing to lose and could even gain the financial freedom you deserve!

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