Your source for the truth about credit in a world full of misinformation.
Viewing entries in
Credit Reports and Scores
Smart consumers know to be skeptical of any "fix your credit quick" promises. However, there certainly are real, actionable credit steps that you can take to see a fast improvement in your credit scores. In this short video HOPE4USA.com Credit Expert, Michelle Black, will show you the most actionable way to improve your credit scores in a hurry.
There are dozens, possibly even hundreds of credit related myths floating regarding the subject of credit scores. As a credit expert I spend a large portion of my time debunking these myths and educating consumers, Realtors, and even loan officers about the real impact which various actions will have upon a person's credit scores. Out of the many, many myths I encounter on a weekly basis one of the most frustrating credit misconceptions that I hear repeated is the idea that checking your own credit will harm your credit scores.
Let's set the record straight right from the beginning. There is a 0% chance that the action of pulling your own personal credit reports for review purposes will damage or hurt your credit scores in any way, shape, or form. In fact, you could even check your own credit reports 100 times per day if you desired and doing so would not have any negative impact upon your credit scores whatsoever. The reason this particular myth is so frustrating is because it deters many consumers from doing the very thing - checking their credit - which they should be doing on a regular basis.
Whenever you or anyone else pulls a copy of one of your credit reports a record of the credit pull is placed on the report. This record is known as an inquiry. Inquiries are placed upon your credit for multiple reasons, but perhaps the most important reason is so that you as a consumer can know who has had access to your credit. (Credit Tip: keeping an eye on who has accessed your credit reports can be an effective tool to help you monitor for potential identity theft.)
Inquiries which do not have any impact upon your credit scores, such as those which occur when you pull your own credit reports and those which occur when a creditor prescreens your credit before sending you a credit card offer, are known as soft inquiries. Not only do soft inquiries have no impact upon your credit scores, but they are also only visible to you when you pull a copy of your consumer credit report. If a lender pulls a copy of your credit report no soft inquiries will appear on it.
Hard inquiries are those which do have the potential to damage your credit scores. A hard inquiry can occur when, for example, a credit card issuer pulls a copy of your credit reports to review as part of an account application. Of course, not all hard inquiries will damage your credit scores - that is a myth as well - but they do at least have the potential to do so. (To learn more about how hard inquiries are calculated into your credit scores you can read "How Many Points Will an Inquiry Lower My Credit Scores?")
Now that you know it is safe to check your own credit reports it is important to understand why you should check your credit reports. Credit report errors occur much more often than most consumers realize. In fact, the FTC released a study in 2013 which estimated there to be around 40 million errors on the credit reports of US consumers at the time.
Of course you have the right to expect accurate credit reports. You are even entitled to accurate credit reports under the Fair Credit Reporting Act. Yet, it is ultimately up to you and you alone to monitor your credit and to ensure that errors do not occur. When errors do occur then you have the right to dispute them - either on your own or with the help of a reputable professional.
Thankfully, you also have the right to access a free copy of each of your 3 credit reports every year at AnnualCreditReport.com. There are also many credit monitoring sites which all you the ability to view all 3 of your reports and your credit scores together conveniently. Here is a link to some of my favorites: CLICK HERE.
Michelle Black is an author and leading credit expert with over 13 years 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 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 HOPE4USA Facebook page by clicking here.
If you have ever been in the unfortunate situation of receiving a call from a debt collector, especially a third-party collection agency, then you are all too familiar with the stress and fear that such calls can introduce into your life. Obviously you will never find a consumer who enjoys receiving collection calls and many collection agencies are known for their unsavory collection tactics. However, in the spirit of fairness it is worth pointing out that sometimes legitimate collection agencies are vilified due to the actions of illegal or phantom debt collectors.
While not all collection agencies behave badly, there are many bad apples in the industry who do routinely use scare tactics and even illegal methods in an effort to collect outstanding debts. However, there is a brand of criminal debt collectors who are much worse. Phantom debt collectors, as these criminals are commonly called, are illegitimate "companies" who actually make up debts that were never really owed in the first place and try to frighten people into paying these phony debts.
Simply put, phantom debt collectors are scam artists - often very skilled scam artists. These scam artists will call unsuspecting consumers and try to convince them to pay debts which are not actually owed. Often these phantom collectors are armed with information acquired through identity theft so, even though they may reference an account which you recognize, the scam artist will try to convince you that the loan is due or that you owe more than your legitimate balance. Additionally, while all phantom debt collection scams are a little different, these scam artists will always try to convey a sense of urgency and will generally threaten serious consequences if you do not pay immediately via a credit card, debit card, or wire transfer. Obviously these practices are 100% illegal.
Unfortunately the phantom debt collection scam is probably not going away any time soon. In fact, the CFPB recently shut down a massive phantom debt collection scam which was utilizing robo-calling technology (enabling them to prey upon thousands of victims) in April of 2015. Due to the fact that phantom debt collection scams have become so common it is important to understand how to protect yourself from these would-be-predators. Here are 3 tips.
1. Debt Verification
When a collection agent calls you regarding a debt that you are not sure whether or not you owe remember that you have the right under the Fair Debt Collection Practices Act (FDCPA) to request a verification of the debt. If the person on the phone refuses your request then the call is likely a scam.
2. Call Your Creditor Back Directly
Received a call from someone claiming to represent a creditor with whom you do have a relationship? Remember you can always hang up and call the creditor back directly at the number on your statement to ensure that the person you were speaking with is truly affiliated with your creditor.
3. Check Your Credit Reports
If someone calls you attempting to collect a debt that you do not recognize then pulling a copy of your 3 credit reports is a wise idea. You can pull your three reports for free each year at AnnualCreditReport.com or, if you have already accessed your free reports, you can always get a copy of your 3 reports + 3 scores online from a reputable credit monitoring service like those found here. When you pull your reports you should verify whether or not the account which was mentioned to you over the phone actually appears on your credit. If the account does not appear on any of your credit reports then the call could possibly be a scam.
Michelle Black is an author and leading credit expert with over 13 years 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 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 HOPE4USA Facebook page by clicking here.
