Congratulations to a new HOPE homeowner! Here's a note that we just received:
"Oh thanks so much...closing went GREAT!!!! So I thank you and your team for all your hard work in improving my credit!!!"
~K. Carr
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Credit Reports and Scores
New Credit Scores
Have you heard about the new credit scoring model that has just been released? I have had a ton of questions this week regarding the new version of VantageScore and I know that many of our readers are wondering how this new scoring model will affect them. So, here's the skinny, the scoop, the 411 about the new, potentially exciting version of VantageScore. First of all, for those who are confused, let me explain exactly what the VantageScore is and how it is used.
VantageScore is the credit scoring model created by the 3 major credit bureaus - Equifax, TransUnion, and Experian. A credit score is a number which represents your creditworthiness, a number that lenders rely upon when deciding whether or not to loan you money for a car, a home, etc. If you visit one of the 3 credit bureau's websites and pay to pull your credit report you can receive a copy of your VantageScore. However, while VantageScore is used by some lenders, the vast majority of lenders will look at your FICO credit score anytime that you apply for a loan. (FYI, if you want to access your FICO scores you can do so for a fee at www.myfico.com, but only from 2 of the 3 major credit bureaus.)
FICO scores and VantageScores are different because they use different scoring models to determine a consumer's credit score. The range of a FICO score is between 300 and 850. Previously, the range of a VantageScore was between 501 and 990. However, under the new VantageScore 3.0, the scoring range is being changed to match FICO's range of 300 to 850. I believe this is a great move for consumers because it will help to reduce some confusion with regard to credit score ranges. Still, even though the scoring ranges will match a consumer would still have a different VantageScore than his/her FICO score. For example, if Joe Consumer has a 680 VantageScore under the new scoring system he will not automatically have a 680 FICO score. The reason for the score difference is because both VantageScore and FICO have different scoring models - an action (i.e. paying off a collection account) may trigger a score increase under one model, but no increase under the other.
The most exciting change for consumers under VantageScore 3.0 is how the scoring model treats paid collection accounts. The previous version of VantageScore would factor collection accounts into the credit score for 7 years, even if the collection account was paid or settled by the consumer. So, under the previous model a collection account with a $0 balance would hurt a consumer's credit scores. VantageScore 3.0 will NOT factor paid/settled collection accounts into a consumer's credit score. A consumer who has $0 balance collections on his/her credit report but no additional negative activity will likely see a significant increase in their VantageScore. This is a very big change and, in my opinion, great news for the consumer.
Unfortunately, as I mentioned above, this change only applies to VantageScore 3.0, not FICO. Since the large majority of lenders currently use a FICO scoring model the new changes will probably not help someone who is applying for a mortgage or a vehicle. We can only hope that, in the future, FICO follows suit and changes their scoring model as well or that more credit grantors begin to adopt the VantageScore for use in their lending decisions. I would not expect any immediate changes, but I do believe the new VantageScore scoring model is a win for consumers.
Michelle Black is an 11+ year credit expert with HOPE, 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.
Most people have a basic understanding that they have 3 major credit scores and that these credit scores determine whether or not they will be able to qualify for financing when they need it. However, did you know that your business has credit scores too? Many business owners do not realize this fact, unless they have tried to apply for a business loan in the past. Just like you, as an individual, have 3 major credit scores, your business has 3 major credit scores as well. Your business scores are calculated very differently than personal scores and are calculated by different reporting agencies as well: Dun and Bradstreet, Experian Business, and Equifax Business.
Dun and Bradstreet is the largest major business credit reporting agency. Dun and Bradstreet is commonly known as D&B and is a publicly traded company headquartered in Short Hills, New Jersey. D&B provides information on businesses and corporations to be used by lenders in credit decisions. Currently, D&B holds over 200 million business records on file.
The roots of Dun and Bradstreet date all the way back to 1841 with the foundation of the Mercantile Agency in New York. The Mercantile Agency joined with R.G. Dun & Company in 1933. Upon merging companies the Mercantile Agency became known as Dun and Bradstreet. It was 1962, however, before D&B created the DUNS number - the worldwide method of identifying businesses.
There are many products and services which Dun and Bradstreet currently offer to both consumers and to businesses. Some of the most popular available are D&B's risk management products such as the Business Information Report, the Comprehensive Report, and the DNBi platform. All 3 of these products provide access to current and historical business information - information which is primarily used by lenders and financial institutions to assist in making credit decisions.
D&B also offers sales and marketing products such as the DUNS Market Identifier database, Optimizer, and D&B Profession Contacts. All of the aforementioned products provide sales and marketing professional with business data for both prospecting and CRM activity. Just as Equifax, Trans Union, and Experian are leaders in the consumer credit arenas (for individual credit reports), Dun and Bradstreet is the undisputed leader in the sale of business credit data.
If you would like to learn more about how you can establish a profile with Dun and Bradstreet, obtain a DUNS number, and get approved for $50,000+ in business credit this year with no personal guarantee, please give us a call at 704.499.9696. A HOPE Business Funding expert will be happy to speak with you and to answer any questions you may have!
Debt Collectors Do NOT Have the Right to Harass or Threaten You!
Don't let your creditors take advantage of you. The Fair Debt Collection Practices Act (FDCPA) is a law designed to protect you against unruly creditors and collection companies. YOU have a ton of rights under this act which will help stop harassing creditors and debt collectors in their tracks. Here are just a few of the things which debt collectors are not allowed to do:
- They are not allowed to tell others details about the consumer, including that they owe a debt.
- They cannot communicate with anyone other than the consumer more than once.
- They cannot communicate through post cards nor can they have ANY markings on the outside of their envelope indicating they might be a debt collector.
- They cannot use the fact that they are a debt collector to bully you into paying.
- They cannot identify themselves as a debt collector to your employer.
- They cannot send things in the mail to identity they are a debt collector with the intent of embarrassing or causing other hardship to you.
- They cannot call you before 8 a.m. and after 9 p.m.
Debt collectors are also required to immediately cease and desist contact with you if you are represented by an attorney, or if you notify them to do so in writing, or if you notify them that you refuse to pay the debt. Any violations of the FDCPA can be costly to the debt collector, especially in the civil and class action aspects. And, these are only a few of the aspects of how this law protects you.
Contact us today at 704.499.9696 to learn how you can have the exceptional credit you deserve or click here if you would like to schedule a personal credit analysis with a HOPE Credit Expert.
On Sunday, February 10, 2013, 60 Minutes exposed their shocking investigation of the nation's 3 major credit bureaus: Equifax, Trans Union, and Experian.
If you have not seen the report yet, click here. Every American should see this report:
