Showing posts with label Credit. Show all posts
Showing posts with label Credit. Show all posts
Tuesday, November 13, 2007
Wednesday, October 24, 2007
Your Free Credit Report
01. Access to a Free Credit Report
A recent amendment to the federal Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies to provide you with a free credit report, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of information in the files of the nation's consumer reporting companies. The Federal Trade Commission (FTC), the nation's consumer protection agency, enforces the FCRA with respect to consumer reporting companies.
A credit report contains information on where you live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your credit report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home. There are three nationwide consumer reporting companies:
1. Equifax
2. Experian
3. Trans Union
02. How to Get Your Free Credit Report
Consumers in Western states will first be able to order their free credit reports under the federal law beginning December 1, 2004. Consumers in other states will be able to order their copies according to a regional roll-out.
The three nationwide consumer reporting companies have set up one central website and a toll-free telephone number where you can order your free credit report:
* Visit: AnnualCreditReport.com
* Call: 1-877-322-8228
Or, you can complete the Annual Credit Report Request Form available at the website above and mail it to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
You may order your free credit reports from each of the three nationwide consumer reporting companies at the same time, or you can order from only one or two. The law allows you to order one free credit report from each of the nationwide consumer reporting companies every 12 months.
Source
A recent amendment to the federal Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies to provide you with a free credit report, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of information in the files of the nation's consumer reporting companies. The Federal Trade Commission (FTC), the nation's consumer protection agency, enforces the FCRA with respect to consumer reporting companies.
A credit report contains information on where you live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your credit report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home. There are three nationwide consumer reporting companies:
1. Equifax
2. Experian
3. Trans Union
02. How to Get Your Free Credit Report
Consumers in Western states will first be able to order their free credit reports under the federal law beginning December 1, 2004. Consumers in other states will be able to order their copies according to a regional roll-out.
The three nationwide consumer reporting companies have set up one central website and a toll-free telephone number where you can order your free credit report:
* Visit: AnnualCreditReport.com
* Call: 1-877-322-8228
Or, you can complete the Annual Credit Report Request Form available at the website above and mail it to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
You may order your free credit reports from each of the three nationwide consumer reporting companies at the same time, or you can order from only one or two. The law allows you to order one free credit report from each of the nationwide consumer reporting companies every 12 months.
Source
What Creditors Want
When deciding whether or not to grant a loan, creditors look for an ability to repay debt and a willingness to do so. When considering these factors they examine the three Cs of credit:
1. Capacity
2. Character
3. Collateral
01. Capacity
Can you repay the debt? Creditors ask for employment information: your occupation, how long you've worked, and how much you earn. They also want to know your expenses:
* How many dependents you have.
* Whether you pay alimony or child support.
* Amount of your other obligations.
The magic number that quantifies your capacity is your Debt-to-Income Ratio, or DTI. It is simply your total monthly payments divided by your gross monthly income.
02. Character
Will you repay the debt? Creditors will look at your credit history to see how much you owe, how often you borrow, whether you pay bills on time, and whether you live within your means. They also look for signs of stability:
* How long you've lived at your present address.
* Whether you own or rent.
* Length of your present employment.
The important number here is your credit score. The higher, the better.
03. Collateral
Is the creditor fully protected if you fail to repay? Creditors want to know what you may have that could be used to back up or secure your loan, and what assets you have other than income for repaying the debt. In other words, what can they take from you if you default on the loan. The most important piece of collateral, of course, is the property you're financing. The higher the loan amount relative to the appraised property value, the more nervous creditors get. This ratio, by the way, is called Loan-to-Value, or LTV.
Creditors use different combinations of these facts in reaching their decisions. Some set extremely high standards and other lenders simply do not make certain kinds of loans.
Some rely strictly on their own instinct and experience, while others use credit scores to predict whether you're a good credit risk. They assign a certain number of points to each of the various characteristics that have proved to be reliable signs that a borrower will repay. Then, they rate you on this scale.
And so, different creditors may reach different conclusions based on the same set of facts. One may find you an acceptable risk, while another may deny you a loan.
Source
1. Capacity
2. Character
3. Collateral
01. Capacity
Can you repay the debt? Creditors ask for employment information: your occupation, how long you've worked, and how much you earn. They also want to know your expenses:
* How many dependents you have.
* Whether you pay alimony or child support.
* Amount of your other obligations.
The magic number that quantifies your capacity is your Debt-to-Income Ratio, or DTI. It is simply your total monthly payments divided by your gross monthly income.
02. Character
Will you repay the debt? Creditors will look at your credit history to see how much you owe, how often you borrow, whether you pay bills on time, and whether you live within your means. They also look for signs of stability:
* How long you've lived at your present address.
* Whether you own or rent.
* Length of your present employment.
The important number here is your credit score. The higher, the better.
03. Collateral
Is the creditor fully protected if you fail to repay? Creditors want to know what you may have that could be used to back up or secure your loan, and what assets you have other than income for repaying the debt. In other words, what can they take from you if you default on the loan. The most important piece of collateral, of course, is the property you're financing. The higher the loan amount relative to the appraised property value, the more nervous creditors get. This ratio, by the way, is called Loan-to-Value, or LTV.
Creditors use different combinations of these facts in reaching their decisions. Some set extremely high standards and other lenders simply do not make certain kinds of loans.
Some rely strictly on their own instinct and experience, while others use credit scores to predict whether you're a good credit risk. They assign a certain number of points to each of the various characteristics that have proved to be reliable signs that a borrower will repay. Then, they rate you on this scale.
And so, different creditors may reach different conclusions based on the same set of facts. One may find you an acceptable risk, while another may deny you a loan.
Source
Friday, October 19, 2007
Making a Plan to Get Out of Debt
Many people who have debt blindly make their minimum payments each month without a single thought about paying off the debts. Showing an interest in reducing your debt is a big step. Let one big step lead to another by finding out how to put together a plan to eliminate your debt.
When you're overloaded with debt, it can be difficult figuring out how to best tackle the debt. You have to figure out which accounts you should pay, in what order you should pay them, and how much you need to pay to eliminate your debt. By attacking each of these hurdles one by one, you can tailor a plan that fits your budget and debt load
Source
When you're overloaded with debt, it can be difficult figuring out how to best tackle the debt. You have to figure out which accounts you should pay, in what order you should pay them, and how much you need to pay to eliminate your debt. By attacking each of these hurdles one by one, you can tailor a plan that fits your budget and debt load
Source
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