Tag: credit report

How To Protect Yourself From Credit Card Swindle? Part 1

Recently we discuss a theme of swindle with credit cards. So let us find out what it is necessary to be afraid of and what measures we should take for safety provision?

Actually all is very simple, it is necessary to be a bit more attentive to your personal things. All credit card issuers suggest to apply the given security measures, simply not all are in time to report it to you.

1. For the certificate the persons use only the driver’s license. Never carry with yourself social security number, also don’t write down it on an underside of photos in your purse. Store all private papers, and also checkbooks and other securities in a safe place.

2. Replace possible paper documents, invoices, and other payments with electronic systems. Subscribe for automatic charge of a salary on your card if for the employer it is possible to make.

3. Use effective codes and passwords.

* Choose difficult passwords, mix figures and letters;

* don’t use the personal information for your PIN code, for example — date of birth, a name of the loved one or number of phone.

* don’t disclose codes and passwords, even in the house, and periodically change them.

4. Never give the information of the personal character to unknown persons, also don’t answer unfamiliar e-mails, and don’t answer automatic telephone messages which force you to give the personal information for settlement arisen with your bank account.

Instead use contact addresses, sites or telephone numbers which to you are known, or which can be checked up easily.

5. If you have a house computer, establish and regularly renew the anti-virus software and options of safety of the browser.

For bigger safety use the special programs given by banks, such as virtual credit cards. When perform purchasing on the Internet be convinced that you have business relations with known firm.

6. Ensure safety of your mobile phone, a handheld computer or the laptop, use special programs of enciphering.

7. Don’t fill various post offers on acquisition of the credit cards, containing forms with the personal information.

8. Necessarily tear all important documents when you are going to throw them out. Destroy all important digital media, at recycling of old computers, devices of storage of the information and phones.

9. Use a safe mail box. If your house mail box isn’t safe, consider possibility of reception of mail on work or mail box rent in postal service.

10. Remember your environment when perform purchasing in public places at input of a PIN code.

So I am sure that if you would adhere to those safety measures your credit card won’t be stolen by swindles and your pin numbers will be known only to you.

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The Reasons To Protect The Credit History

Easier to spoil the credit history, but it is difficult to correct it then. And can, actually, positive “biography” of the borrower be necessary to us? For the sake of what it is necessary to protect credit history and regularly to pay under credits?

The first reason. Bureaus of credit stories communicate with each other.

Before crisis the requirement to teach the borrower what is unfair, didn’t face banks so sharply, as today when organizations are extremely careful in issue of new loans. According to requirements of banks credit bureaus start to develop. With renewal of crediting the question of a cognizance of dishonourable borrowers becomes absolutely sharply for now experts only predict that bureaus will start … to exchange the data.

It is necessary to notice that credit bureaus develop, and data exchange between bureaus would be a logical stage of this development. Certainly, it is a question of authentic and qualitative data exchange. I think that sooner or later our bureaus to it will come. However, according to specialists, it will occur not so soon as it would be desirable. It is possible, and there is a certain form at which the exchange of such information can occur on a mutually advantageous basis. However, in my opinion, such interaction between different bureaus of credit stories is a question of not immediate prospects.

The second reason. In the future credit bureaus will unite

In spite of the fact that today all credit bureaus did not unite yet, and the current situation in the market allows them to earn not bad, selling credit stories of borrowers, not a secret that for successful functioning of the market all banks should know if the diligent client has come to them or not. For this reason sooner or later bureaus will unite. Bureaus already understand the vital necessity of their consolidation and cooperation. I am assured that very soon we will hear news concerning this theme, confirming similar assumptions.

However, not all specialists consider that consolidation of credit bureaus will have only positive sides. As well as any consolidation it can have both positive and negative consequences. On the one hand, banks can receive the most complete list of credit stories from one source. With another – the monopoly in market can lead to falling of quality of services given by them (which now and so not at the highest level) and to growth of tariffs, in this connection it is possible to call into question coefficient of utility of this idea in immediate prospects cut. At the given stage the market should develop how it develops.

And though future changes in the legislation are focused more likely not on problem borrowers, and on suppression of swindle with counterfeit codes and with counterfeit inquiries on incomes, the tendency is available: the government acts even for such revolutionary changes for benefit of credit bureaus. That also look – the bill providing an obligatory exchange by the negative information about borrowers between all credit bureaus will be following step. Or still any innovation the extremely favorable to bank system, but unpleasant for the people who have spoiled the credit history.

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The Reasons To Protect The Credit History Part 2

The third reason. There is a uniform register of borrowers

There is a uniform information system “the Register of borrowers”, that called to collect the negative information about unfair borrowers. The overwhelming majority of the banks already work with this system. Within 10 days from the date of transfer of indebtedness of the borrower into defaulting debt accounts, bank is obliged to form and send the information on borrowers with defaulting debt. The information on borrowers-juridical persons is given with obligatory instructions of the data on founders and a management. However, while the system functions not so perfectly as it would be desirable. It is necessary to lower a threshold of the sum of the defaulting debt given by banks, and also to reduce submission due date information.

Besides, banks yet don’t consider system effective and concern it accordingly. For example, formally the bank declares transfer of negative credit stories to the Register, however upon the minimum quantity of files can be transferred only. At great volumes and the automated process of crediting there is a question on expediency of inquiry to such register with unknown hit rate and absence of possibility of the detailed analysis of credit history. Two more reasons – low level of automation of inquiries and reception of answers from the Register, and also the limit on quantity of inquiries a day.

At last, the legislation yet doesn’t allow to use the register differently, than as the tool for supervision of banks. However in a press there was an information that the regulator wants to use the register for revealing by banks of malicious non-payers under credits. It is necessary to assume that for similar changes to wait not for long – after all the will of a regulator is already clear. Possibility of functioning of the given system in the near future, in my opinion, in a greater degree depends from banks as the banks interested in decrease of credit risks and improvement of system of a risk management, will join the register only at understanding of its efficiency.

The last reason. Credits can be necessary to you.

Having left behind the first recession year especially noted by increase of rates under already given out credits, it is possible not to be surprised, why so many people have decided not to resort once and for all for themselves to bank borrowings. However to lift rates unilaterally already have prohibited, and credit products actually can … be useful. There are a lot of cases when the loan can be necessary. For example, if to you for work it is necessary to buy a car, but there is no possibility to pay for it all sum at once. Or if on your credit card the long grace period when you can use borrowed funds free of charge is established.

Among various and often expensive bank products come across very interesting and useful. And then you as the proprietor of good credit history can choose from many variants. After all banks prefer to credit such clients with good credit history.

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Increasing A Limit On A Credit Card!

Actually, every credit card has an expenditure limit, even that about which says that it without a limit. At use of such cards as American Express, for example, credit bureaus take for a basis the highest balance sheet on your card as its limit.

From the previous clauses you, probably, already know that on a credit card it is not only that sum more which you can’t spend a limit. The limit on the card is a relative indicator of your expenses in relation to a credit total sum.

This ratio directly is reflected in the sum of your credit points.

Constituting factors of credit points

At school, the teacher checks knowledge of pupils by means of tests, dictations, oral polls, quests etc. Thus, for the teacher, the estimation for examination has greater weight, than estimation for the oral answer.

Credit points settle payments by the same principle.

Points in itself can vary from 300 to 850.

However, general idea on what the system of calculation is based for a long time is known:

Constituting factors of credit points:

35 % — are constituted by history of payments. It is of great importance, as the creditor wants to know how the client pay the accounts. The quantity of points depends on that, how many accounts have been paid in due time, how many with delay, how many from them have been directed to agency on collection of debts, bankruptcy etc.

30 % of points are constituted by an outstanding amount from the sum of the accessible credit. The more cards with the balance sheet approached to a limit, the more low credit points. As a rule, try not to exceed the balance sheet more than on 25 % from an admissible limit, and it won’t lead to score decrease.

15 % — are constituted by an estimation of duration of history of crediting. I.e., the more term of credit records, the better it is reflected in the sum of credit points.

10 % from total quantity of points are inquiries about issue of credit cards and other kinds of a loan. Frequent inquiries and frequent refusals are a stoplight for the creditor. Probably, you have simply got into debt?

10 % of points, are based on kinds of available credits (a housing loan, machines etc.)

Nevertheless, very small quantity of people increases a limit on the card even if necessary. Some credit card holders throughout the long period of time have a limit of expenditure at a rate of 300-500 dollars and at all didn’t try it to increase.

It is not good to approach to this question from a position “And what for it is to me? Yes, probably you are ok with that credit points that you got and you think today that it is totally sufficient for you. But imagine that a year or two from now you will want to buy the new car, the house or apartment. Here your points also were useful to you to receive more favorable terms of credit.

For example, it is possible directly and to motivate the inquiry about credit limit increase that you don’t want that the sum of your credit points decreased each time when expenses come nearer to a limit. Tell that you aren’t going to use all sum, it is only technical necessity. The method checked up and well works!

If you have already reflected, over that to increase the size of a limit of an expenditure on a credit card — make it today. For demand of money don’t take. It won’t be reflected negatively in the credit report; on the contrary, in case of increase in a limit it will yield positive result.

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What Is A Credit History?

The credit history is a credit folder on separately taken person or the company.

It is possible to look at credit history in the special report which constitute and renew credit bureaus.

From the credit report it is possible to receive the following information:

* quantity and the size of the current and extinguished credits;

* history of repayment of credits (timeliness of payment, delay, non-payment);

* the size of current indebtedness;

* general extent of credit history;

* record about bankruptcy;

* the list of the companies which did inquiry about your name.

For what the credit history is necessary? For banks, the condition of credit history of the person, allows to estimate a measure of financial risk at borrowing of money. I.e., the credit history forms a trust measure to the borrower. Easier to lend to the person about whom it is known that this borrowing in time returns, than to the person about it is known anything. In this connection, for people (and the companies) having good credit history, there was a possibility to obtain the loan in bank under more low interest, than for people with bad credit reputation.

Absence of credit history:

* complicates process of reception of credit cards and other kinds of a loan;

* at reception of the credit, a condition of its granting more expensive, than for the person, at which good credit history;

* at purchasing or a real estate lease, the owner can change the decision on the size of the deposit in the big party.

Who collects the information on a credit history?

It is collected by credit bureaus. They do credit reports and renew the information in them.

It is necessary to notice that banks and other credit establishments periodically send reports to credit bureaus with the information on changes on accounts of their clients.

For mess elimination, in the USA there is a system of complete identification of people, by assignment to each person of individual social security number — Social Security Number. Without such number, the credit history is difficult for identifying with the certain person since each of us can have namesakes.

According to the federal act of the USA, each person living in territory of the USA and having Social Security Number has the right once a year, free of charge to receive the credit report from three credit agencies.

To arrange the request for the annual credit report is possible free of charge on the web site.

Also, it is possible to send the statement by mail.

… Or to call by the phone

Unfortunately, the law doesn’t oblige credit agencies to give the information on quantity of credit points for free.

Where it is possible to learn a quantity of credit points FREE OF CHARGE?

On the web site

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Credit History Tips

How to spoil credit history?

Late payments

They need to be avoided with all possible forces. If payment have by mistake marked as delayed, demand cancellation. Generally, creditors can concern with understanding cases when payment has been delayed for 30 days no more than two times.

A considerable quantity of credits

Twenty credit cards in a wallet? What for to you to have so many cards?

Bankruptcy

Worse doesn’t happen.

Many “new” credits

Reception of five new credit cards for a short time interval is similar that it was preceded by dismissal from work.

Refusal in credit issue

About refusal in credit issue entry in the credit report is automatically made. Availability of such records reduces the sum of credit points.

Moving from place to place

Moving from place to place specify, from year to year, in certain instability in life of the credited.

Not paid credit

Worse is only a bankruptcy.

A lot of short living credit accounts

Or absence of “old” credit accounts. The credit companies like to see that the person can manage long time the same account. Each time to pay in due time.

Methods of fast growth of credit points:

Availability of good credit points, promotes interest rate reduction on the credit, helps to save a considerable amount of money.

1. New credit accounts

It is necessary to receive a credit card on your name and to use it responsibly, i.e. regularly to pay accounts and not to fall outside the limits the given limit.

Try to have always the balance sheet not above than 25 % from the admissible sum of expenses on the card.
2. Co ownership of card bills

If parents or other close persons don’t object to add your name to their credit account it will promote growth of your credit points.

Each time when the account holder produces the payments, corresponding record also is added in the credit report of the co-owner of the account.

3. Credit cards with a debt collateral (secured credit card)

For the people who do not have a credit history, reception of a credit card with debt collateral can become one of exits.

Such kind of credit cards means deposit entering into the credit account. The size of the deposit is usual equal to the size of the given out credit, but not always. For the deposit sum percent, as on the contribution are charged.

Essence in that the bank, starts to send the information on operations on the account in credit agencies that the bank doesn’t do at use of the settlement (debit) card.

In reception of such card is a little financial sense. But, from the point of view of growth of credit points — yes!

4. Don’t submit many statements on reception of credit cards

If in records of credit history sharp jump of inquiries about reception of credit cards this circumstance can lower the sum of credit points is observed.

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What Does These Credit Points (scores) Mean?

Credit points are the three-value number, based on statistic analysis of the credit folder of this or that person (or the companies).

Quantity of credit points is the ability to meet payments indicator. The more quantity of points the more stable looks a financial position for the creditor.

In the USA, credit bureaus are engaged in calculation of credit points. The basic sector of the market of credit bureaus, three companies occupy: Experian, Equifax and TransUnion. To them, more often creditors (banks, shops, etc.), for check of credit history of the clients also address. Credit bureaus earn that sell the collected information to the credit organizations and other interested persons.

You, possibly, guess that there should be a certain system of calculation of points, certain rules. And it is possible, already heard such concept as “FICO scores”. The matter is that systems of calculation of points, actually it is a lot of. And each credit bureau can count in own way. A three of the greatest credit bureaus (Experian, Equifax and TransUnion) have chosen system FICO developed by company Fair Isaac.

History of development of a method “FICO” by calculation of credit points

Method of calculation of credit points is not such young. Already by the end of 70th years, almost all large creditors used formulas for an estimation of a credit rating of clients and reliability of their financial position.

The invention of credit points, has been developed by two basic leaders in business — mathematician Earl Isaac and Bill Fair. These two enterprising persons, have created the company in 1956 under the name «Fair Isaac». And all that this company has created, perfectly works and to this day.

Originally the system should prove the freedom from prejudices. So, the credit risk couldn’t be connected with race of the person, its religion, skin color etc.

Then, there was a question with system renovation — creations of a uniform databank. Untimely renovation of the information on the potential borrower was the reason for it. Certainly, all has changed, when there were computers which have considerably facilitated the task decision on data storage, and also have helped to perform their fast transfer from one point in another when it was required.

How to find out the quantity of credit points?

Quantity of credit points, it is possible to find out from the credit report.

As all three cores of credit bureaus in the USA, use system FICO, it will be convenient to be guided in understanding of level of credit points. It is necessary to notice that the quantity of credit points can be various in each of these credit bureaus. It depends on with what periodicity they renew the information banks. Agencies Experian and Equifax, suggest for free to learn quantity of credit points and to watch their change within the next 30 days.

Monitoring of a condition of credit history allows watching its changes, increase or lowering of quantity of credit points, avoiding swindle from people who can use knowledge of the personal data of you.

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Studying Your Credit History

It is not easy to study the credit history. First, at each credit bureau the system of dialogue with barrowers and to understand it quickly is a hard thing. Secondly, despite the right warranted by the law it is possible familiarize with own credit history free of charge, in practice some people still don’t know about it. What is the acquaintance with credit history and how it can be made?

As banks already start to credit actively and soon and percent on loans will spread downwards, it is a high time to begin studying the credit history. Certainly, if you well remember that never in your life there were no any credit or bill delays it can seem that the special sense in check isn’t present.

But as practice shows, cases when in the history slip the data about credits which you never took or about delays which never supposed are frequent. For this purpose also there is a right permitted by the law to get acquainted with own credit history. Thus the law permits to check it for free and also in case of refusal in the new credit.

The bureau of credit stories is obliged to give the report within two days from the date of your inquiry; therefore there should be no delays in reception of credit history. Thus the circulation order in bureau under the law is determined by position of the bureau. It also leads to a procedure discrepancy in these organizations, and in certain cases to complexities. In particular, in spite of the fact that the law warrants free acquaintance with the credit history, in practice to make it without expenditure of means it is almost impossible.

First, the inquiry by mail which many bureaus also offer free of charge, demands not only post costs, but also costs for the notarial certificate. Thirdly, some bureaus demand payment for granting of your credit report even at personal visiting of office of the organization.

However there are also free of charge bureaus. There also it is possible, for example, to check up availability of the credit history by means of a message. After sending of message in which you have specified the identification code, the answer comes that with you will communicate. Actually within an hour after such experiment, on our mobile phone very polite employee has called and has set some questions on personal data, after that to us was told that our history is in normal state.

To familiarize with history also it is possible in an online mode. For this purpose it is necessary to be authorized by means of mobile phone and identification code number (if you changed the number since last credit with you employees for identification will communicate with you). At last, after entering in a code on the web site (the original time password) which the system will send on your mobile phone, you can start free acquaintance with the credit history. We will notice that all messages for you costs as usual messages under tariffs of the operator.

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Studying Your Credit History Part 2

Except online access, it is possible to familiarize free of charge with the credit history, having approached in the office of bureau or having sent inquiry by mail on the address of the office and after a certified identification code and the statement about desire to receive the credit report it will be sent to you. Thus but to pay for the report it is not necessary – even by mail to you it will send at the expense of bureau.

Except the standard report on your credit history, you can already on a paid basis order special service. It is the calculation using a special method of the company which settles payments on the basis of your credit history and shows, how much you are the desired borrower for bank. Payment for this is conducted through electronic payment system without the commission (thus on the site of bureau the payment mechanism as by words and in pictures-screenshots very in detail described that does procedure idle time for beginners.

But the most interesting service which for observers of credit history gives bureau is the service that allows watching any changes in a credit history, to you on the phone the message comes. One of the most pleasant benefits of such service is that if there are any errors with your credit history you will definitely find out about.

Opinions of experts:

Unconditionally, the borrower, whose history in one of bureau is negative, can take the credit in bank-partner of other bureau. In case the borrower arranges the credit in some bank which would not be the partner of the bureau having the negative information about the given borrower, this bank simply physically can’t identify the availability of such information on the potential borrower. Hence, in the absence of any negative introduction the monetary institution can quite agree with credit issue to such borrower.

The law on credit bureaus allows bureau to exchange credit stories, but in practice it doesn’t occur, as leads to occurrence in the unfair borrower of possibility freely to take the credit in other bank which doesn’t cooperate with bureau where its negative credit history is stored.

The borrower shouldn’t hope that its negative credit history is unknown to bank only because the bank is the partner of other credit bureau. Today more and more banks understand importance of use of the data of bureau and hand over them the information on the borrowers. Besides at a stage of verification of the data given by the potential borrower banks, as a rule, use a number of other tools (besides credit bureau) which help them to estimate authentically payment history of the person who has addressed for reception of the credit.

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Credit History Optimization

So what does it mean?

One of the most widespread errors of borrowers is that the majority of people simply live in happy ignorance that actually from itself represents their credit report. Also many people don’t know that there is more that one credit bureau. Means, credit bureau, whence the creditor acquaints with the status report of your credit history. And, as a rule, this one of three bureaus: Experian, Equifax or TransUnion (United States)

The credit report given by company Experian can strongly differ from the report of company Equifax or TransUnion. For that there can be some reasons: untimely renovation of a database of the companies, discrepancy of the acquired information, the different periods of renovation of systems, etc.

Thus, to own the information in full, it is desirable to receive the report from all three national credit bureaus.

The credit report showing quantity of credit points, it helps to see the credit history of eyes of creditors. And though for creditors the score can be not the most important that he wants to see, nevertheless, it is very important to know quantity of available credit points.

The knowledge of it, will help to analyze under what percent, say, it is possible to buy the car, instead of to take the first offer.

Almost in any credit establishment it is possible to see the table where it is visible on what annual interest the client can count depending on quantity of credit points.

It is not necessary to do unnecessary inquiries.

At credit reception, clients sign the permission to the creditor on viewing of credit history. Such inquiry remains in the credit report. The given record can be seen easily usual in the bottom part of the report (an inquiry place, date, the credit establishment name etc.).

Refusal in credit granting reduces the sum of credit points. Each refusal of the creditor is a step back. One of exits is to wait, tighten the sum of credit points.

When it is known that you have a card with a limit in 5 thousand dollars from which 2 thousand are on the average used, the share of spent money is visible to creditors. But when they see only, how many money is spent, but the limit on the card there can be an impression is unknown that the client uses all credit amount.

Earlier it was noticed that approach of expenses on the card to an admissible limit is one of certain ways of reduction of the sum of credit points. The best decision is to use the card for 20-25 percent from the admissible sum of expenses. At requirement for purchasing something expensive, divide payment on two cards.

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