Tuesday, January 30, 2007

The Truth About Creating An Alternate Credit File

By T. Price

What if I told you there was a way you could solve all your bad credit problems overnight by creating a brand new credit file in 24hrs - would you be interested? And what if I told you this program was 100% legal and even backed by the federal government - would that sound too good to be true?

Well... you're right. It is too good to be true but these types of ads are now surfacing again after the Federal Trade Commission launched "Operation New ID Bad Idea" over 8 years ago. This operation targeted (and took down) over 50 credit repair organizations and companies selling consumers both pamphlets and services giving them a brand new credit file under the pretense it was 100% legal and in some cases even claimed it to be a "government sponsored" program!

The con was simple. Companies would target consumers with bad credit and offer to create a brand new credit file for them by substituting an Employer Identification Number (EIN) for their Social Security Number (SSN) along with a new address. EIN's were obtained from the Internal Revenue Service on behalf of the consumer. With the EIN and a new address the companies would either have the consumer apply for credit with the "new information" or the company would apply for them. When the creditor would run the application it would automatically create a new credit file because the computer would be unable to find the consumer in the database due to the new address and SSN.

While there is some dispute among privacy experts as to whether or not this is legal, the FTC's actions at the time were not up for debate. Companies were advertising and luring in consumers in order to have them falsify credit applications by providing new information such as their address and SSN in order to obtain credit. This was a direct violation of the Truth in Lending Act (TILA) and worse yet, the companies were advertising to consumers that this was 100% legal and in some cases claiming it was a government sponsored program. As you'll hear me say often "In reality, nothing could be further from the truth".

Privacy experts will argue that using an EIN or 9 digit PIN (simply a made up number) in place of ones' SSN is completely legal since creditors are on shaky ground asking for your SSN in the first place. In regards to the truth in lending act they will argue that one has to exhibit "an intent to defraud" a creditor. My question "Is concealing ones' adverse credit history intent in itself?" While I am not an Attorney on the matter of credit law I can conclude that if a consumer was to create an alternate credit file using the EIN or PIN method they better be darn sure they never have a problem paying their bills. If they do, they most likely would find themselves in a courtroom with a case involving credit fraud. Which brings me to my next topic.

How To Create An Alternate Credit File Legally

Most consumers are unaware that in addition to consumer credit reports, both Experian and Equifax own and operate business credit reporting services. By creating a business credit profile a consumer can now create an alternate credit file legally. While some creditors such as residential utility companies will not allow you to use business credit in place of personal credit, we have had numerous clients who have successfully used business credit to obtain credit cards, automotive leases and loans. This technique (although controversial) can be very effective when done properly.

The basics of building business credit involve 1.) Setting up the proper structure for your business (i.e. Corporation, LLC, etc.). 2.) Obtaining an EIN as well as a DUNS number (Dunn and Bradstreet). 3.) Borrow and/or buy products and services from vendors who reports to business credit reporting agencies such as Experian, Equifax and Dunn & Bradstreet. While building business credit requires time just like personal credit, don't get discouraged. Remember, when you set out to begin building your business credit you are starting with a clean slate. This is when it becomes imperative that one learn from the mistakes of their past. Remember, in the credit world those who do not learn from their past are (inevitably) doomed to repeat it.

In a few days we'll talk about:

"Five Things Every Married Person Should Know BEFORE Signing Any Credit Application!"

Terry Price is the founder of Consumer Education Group which publishes the Credit Secrets Bible (in print since 1994).

For more information on the CREDIT SECRETS BIBLE you may visit:


Monday, January 29, 2007

Your Credit Card is Stolen and You May Not Know

By Burgess Xavier

Your biggest concern about your credit cards is that they have gone missing. If and when this happens, what is your plan of action? do you have one? Well, you should.

It is important to come up with a credit card action plan and it is not as daunting as it may appear. All reputable credit card companies have a set policy that helps to protect you against loss or theft. You just need to know how to get this policy to work in your favor.

You fear you credit card may have been stolen? never fear, help is here!

You first step should be to report that your card was stolen to the credit card company as soon as it is humanly possible. Fortunately for you, federal law dictates that you are only liable for the first $50.00 of any fraudulent charges made on a charge card.

However, you are required by law to report a lost of stolen card when it occurs. You are not going to take a huge hit because of the federal regulations, but you must report it. Even if it is only for the fact that if you report the card stolen before any unauthorized charges were made, you won't even be liable for that $50.00 minimum. Also, as an incentive to get their card in your hands, many card issuers are waiving the minimum liability when they make their credit card offer to you.

When the card is stolen, it is important that you monitor your credit card bills for any unauthorized charges. Further, you need to inform the credit card provider about these charges in writing. In this letter, you should ensure that you quote the date you reported the card stolen. Mail the letter separately, do not include it with your payment, it will get lost in processing

Finally, the best way to avoid stolen or lost cards is to keep track of them. Know where they are at all times and keep your pin number a secret. Also, don't use a pin number that is easy to figure out such as your birth date or phone number. Make it a number that only makes sense to you and keep it that way.

Burgess Xavier is a freelance writer. Protect yourself from credit card fraud and identity theft - browse his website where the most effective ways to protect yourself are revealed. They work , and they work fast. Visit the site now Check out the Credit Card resource to protect your money and your indentityhttp://www.Justintimeliving.com/credit-cards

Thursday, January 25, 2007

If You Keep Track, You Can Rebuild Your Credit

By Peter T. Wilson

Establishing a budget, keeping on track with it and keeping record of all of your expenses is the real solution for rebuilding and repairing your credit once it has been damaged. Don't be tempted to file for bankruptcy; you will only ruin your chances for the future. Even the solution of a debt consolidation loan will only add more and continued debt burden. You have to pay interest on the loan, and you will just be worried about making it until it is finally paid off. The best solution is to save your way out of debt. It is a much better idea to keep track of your expenses so you know what you are spending your money on and then you can eliminate unnecessary expenses and start to save.

A small first investment you might want to make is a software program that will assist you in budgeting and saving. By making it easier to keep track of things, this small expenditure will save you a lot in the long run. The first thing you need to do is establish a budget. A software program will ask you all the questions you need to establish a budget. By answering the questions, the program will put all of your income and expenses in the correct categories and show you what you have left over. You can also do this on your own, by using a form where you write all of your income on one side and all of your expenses on the other. Each week write down what you spend on each item, how much you put in your savings account or retirement fund, taxes, etc. Record your earnings and track how much you have left. If you see that each week you have nothing left to pay an essential bill, you will have to change your payment system. Each week as you pay your bills, try to make as large a payment as you can on each of your necessary bills, such as rent or mortgage, electric, water, phone, etc. Then you have to survive on what is left by cutting back on non-essentials. You may have to stop going to the movies for a while and just rent inexpensive ones from the library. You may have to cut back eating out. Next, examine all of your essential bills to see how you can save money there. If you start to limit the phone calls your family makes, if you make sure to turn off lights and stop wasting water, you can probably save a lot of money. Making these cutbacks and sacrifices will pay off big if you can catch up on all of your bills. You will not even remember which movies you missed while you were putting money away to pay off all of your bills.

Another way to handle this problem is to make a survival budget. What is the absolute minimum you and your family need to survive on? Cut every expense down to its lowest, like budget meals every night, no entertainment except whatever is free, basic water, basic T.V. cable, basic telephone. Follow this survival budget for a few months and you will be shocked at how much extra you will have to pay off your bills and debts. Certain items are important to keep up, such as health insurance and your rent or mortgage, so you don't end up with no roof over your head or medical bills you can't pay. But everywhere you can cut back, you should. Any savings can be applied to catch up on bills or debt.

The other side of the equation to look at is your income side. Can you ask for a raise, or can you find a better paying job, or perhaps you can find a second job? Find any way you can (any honest way, that is!) to increase your income while you cut down on your expenses, and you will repair your credit before you know it.

The author Peter Wilson is especially interested in things relating to money management and assets. His publications on assets and managing credit card debt can be discovered on his web publications.

Wednesday, January 24, 2007

Do's and Don'ts of Credit Repair

By Joseph Ducat

When you are working towards credit repair, you must keep in mind that there is a right way and a wrong way of going about it. It helps to know the do's and don'ts of credit repair if you want to accomplish more in less time. Here are some tips I can offer you.

Always get copies of all three of your credit reports from the consumer reporting agencies Equifax, Experian, and TransUnion. These reports do not contain the same information. If you are serious about fixing your credit, you need to work on the credit reports compiled by all three major credit agencies.

Consult your credit report in 3 to 6 months before trying to get a mortgage. If you need to repair your credit, you need to know this and have it fixed as soon as possible. You can get many mortgage lenders to help you with your credit repair, and with their special resources, they are likely to be able to get it done in less than 72 hours. You will have to pay for this service, but that’s a one-time payment that can net you an increase in your credit score that is enough to merit a lower interest rate and save you thousands of dollars in the long run.

Sign up for a credit monitoring service. There are many of them available online. They can provide you with your FICO score as well as updating you on changes in your reports. But be judicious in selecting a service package. Some packages only provide you with reports every quarter, while better ones allow you to check your report every day.

Never put down false information in your correspondence with credit reporting agencies or anyone else. There may be serious legal repercussions if you are caught lying--and your credit report will remain unfixed.

Be very tactful in wording your dispute letters. You do not want to run even the slightest risk of making a misstatement, perhaps inadvertently. Even if you are certain a listed account does not belong to you, do not write that the account is “not mine.” Instead, ask the credit reporting agency to verify the account for you, and delete it if verification shows it to be an incorrect entry.

Take steps to protect yourself from identity theft. It can result in credit fraud that can greatly damage your credit score. Guard your Social Security number tightly, and all other personal information as well. Get a shredder if you do not have one and shred any documents containing personal information before putting them in the trash. Protect your computer files as well. Get reputable firewall, anti-virus, and anti-spyware software and increase the security settings of your web browser.

Learn about the Four Laws That Can Help You In Credit Repair. Get further information and useful tips from http://creditrepairinsider.info

Tuesday, January 23, 2007

Repair Credit Score - Get Back on Track

By Morgan Hamilton

You are probable aware that lenders will examine your credit rating when you apply for a loan. Your credit report is not what you want it to be if you are frowning as you read this. There’s a good chance that you also know that there is something you should be doing about you credit rating. However, you may have no idea on what to do. That’s understandable because many people do not know how to fix their credit, even if some ways are simply common sense. How about you? Do you know how to repair credit score?

Knowing what it is and understanding why yours may be lower than what you want it to be is the first step in knowing how to repair credit score. Being late on your payments can affect your score, and having charge offs can be ever worse. If you can’t do something as simple as paying your current bills on time, then you are going to have a hard time trying to repair credit score.

There may be a need to go back to some old bills that perhaps you neglected to take care of if you are paying your bills on time. Remember that these are sitting on your credit report and will remain there for a long time. You have to take care of these bills if you want to repair credit score. Calling your lender to make arrangements to pay may help, though it won’t make too much of a difference until you start paying it off.

You may have to request to have it removed entirely once the balance is down to zero. Think twice before you accept a deal to get an old credit card paid off to repair credit score. You will still have a mark against you if you pay half of it just to get the debt paid. Even if the debt is considered to be settled, it is still going to go against you if you pay anything less than the full amount you owe.

There are also some offers on the Internet that offer to repair credit score without having to pay off your bills. Avoid these offers because they are nothing but scams. You will only be handing over money that you could be using to pay bills to repair credit score to someone who will just pocket it. You can repair your score if you sacrifice some of your time and money as well as make it a priority.

Morgan Hamilton offers expert advice and great tips regarding all aspects concerning Repair Credit Score. Visit our site for more helpful information about Repair Credit Score and other similar topics.

Sunday, January 21, 2007

How to Improve Your FICO Credit Score

By Robert Rogers

If you did'nt know this already, having a good credit score is more important than having a lot of cash. Putting aside the insanely rich, most people just don’t have that much cash laying around. Some of us have only have a few dollars left over after expenses. Some of us manage to save a few thousand dollars. But unless you have several hundred thousand dollars in cash, you’re going to need a good credit score to get around.

I know from personal experience that having a bad credit score prevented me from getting into apartment after my divorce. I argued with the property manager briefly saying “But I can pay you 2 years of rent up front! Why won’t you let me live here?” She explained that by law they are only allowed to accept three months rent plus the first and last months rent. However, my application to live in the apartment cannot be approved because of my bad credit! You can imagine my frustration. But I just wanted to share with you one example why having a good credit score is more important.

Your credit score is calculated using a something called FICO. It was created by Fair, Isaac Company. It basically takes into account how much debt you have and your payment history over time. If you’ve been making regular on time payments for years, then you probably have a great credit score. If you’ve been late recently, and I mean in the last 6 months, then your credit score is going to drop. And if you been making late payments over and over in the last 6 months to 2 years, your credit score is going to be very poor. If you have a lot of relative debt, which means all your credit cards are maxed out, then that will lower your credit score even more.

So what can you do if you have a low credit score? I’m going to give you a couple of strategies that attack the to biggest factors affecting your credit score.

1. If you have old accounts that are already paid off, don’t close them! Remember, you want to keep your available credit as high as possible for as long as possible. Having more credit available versus your debt improves your credit score.

2. If you have current credit cards with a balance, don’t pay them off right away. For example: You have a $3000 credit card. Every month you charge about $2000 to it, but you pay it off before the end of the month. Although this won’t hurt your credit score, it won’t help it either. You need to carry some portion of that balance over to the next month, even if it’s just $100. Remember – regular payments over time improves your score.

Some other things to consider. If you can only make one payment, pay your mortgage first! Followed by installment loans like your car payment, then your credit cards. When you have multiple payments of the same kind, (i.e. two car payments, five credit card payments), pay the one with the highest interest rate first. Even though nothing feels better paying off a small balance and seeing $0 due, you will save more money in the long run paying off the higher interest rate balances sooner rather than later. This in turn will leave you more money to pay off the small balances.

All these strategies and tips will greatly improve your credit score over time. But there are ways to improve your score much more quickly. Get a copy of your credit report and look for errors. You’re allowed to see your credit report free once a year from each of the three major credit bureaus: experian.com, Equifax.com, and transunion.com. If there are any errors, there are simple ways to have them removed. Sometimes it’s as simple as calling the creditor that reported the bad information. Sometimes you just need to write a letter challenging the error. Either way, removing errors in your credit report is the fastest way to improving your credit score.

For more information on improving your credit score and how to obtain your free credit report, visit: Free Credit Reports

Friday, January 19, 2007

Credit Repair in 4 Easy Steps Guaranteed

By Marc Chase

Most of us have had credit issues in the past am I right? Being able to

repair your credit would be great relief wouldn't it?

I'm sure you've heard of credit repair and if you're like most, the idea sounds great but you haven't heard anything good about the industry.

Here is a sure fire test to finding the right Credit Repair Company.

Each credit repair company has nearly the same verbiage and own spin as to why they're the best choice. If only you knew for sure which company was the right choice, but how?

Listed below are the top 4 credit repair companies with only relevant facts necessary to make an informed decision. For professional reasons we've excluded the names of each company, but connecting the dots will take less then 5 minutes.

You can check each company's records with the BBB by simply going to the BBB website and typing in the companies web address. The rest of the information can be found directly on their websites.

For pricing we've counted the highest level of service offered if upgrades are available. The reason behind this is because to insure effective repair credit, you need the services available only in the upgraded packages.

Take out the spin, sales hype and apply unbiased relevant criteria, a lot of facts are revealed.

Company #1

BBB Complaints: 0

Guarantee: Unconditional / No questions asked

Price: 69.00 Set up / 44.00 Month

In Office Consultations: Yes

Company #2

BBB Complaints: 6

Guarantee: Conditional / Weighed individually each month

Price: 95.00 Set up / 54.95 Month

In Office Consultations: No

Company #3

BBB Complaints: 8

Guarantee: Conditional / no set policy / Weighed individually each month

Price: 69.95 Set up / 45.00 Month

In Office Consultations: No

Company #4

BBB Complaints: 267

Guarantee: Conditional / After 1 year / Deletions vs. Non deletions deducted

Price: 99.00 Set up / 79.00 Month

In Office Consultations: No

Marc Chase is a Partner at MyCreditGroup.Com – A nationally recognized authority on credit report repair. His company is used by agencies such Washington Mutual, Country Wide bank and they have been featured in several prestigious newspapers as “one of the few true authorities on credit repair” Visit their site at http://www.mycreditgroup.com

Thursday, January 18, 2007

How YOU Can Save Money with a Low APR Credit Card

By Alan King

Many people are always on the lookout for a great deal on a credit card and many have found that a low APR credit card is a great way that they can save some money. Credit cards that offer low interest, offer appealing APR rates that are lower than the average credit card. With the average APR being around 13%-14%, finding a card that offers a lower APR can literally save people thousands of dollars in interest each year.

Finding a Low Interest Rate Online advertisements may be constantly floating across your screen, making a low APR credit card look easy to find. In reality, getting a low APR credit card is not as easy as one might think. These types of credit cards are very hard to qualify for and any negative reports on your credit report can eliminate your eligibility for a credit card with a low APR. Most low APR credit cards require that you have an excellent credit score. Looking closely at the fine print before applying may let you know that this type of card is only for those with great credit scores.

Are These Cards for You? If you are interested in a low APR credit card, you may want to consider the benefits before you sign up for one of these credit cards. If you have large balances on credit cards with high interest rates, switching to a low interest credit card may be helpful for you. The lower interest rate will save you money over time. However, it is important that you keep your payments current. Many times, missing one payment can lead to your interest rate skyrocketing and you will lose your savings.

0% APR vs. a Low APR Credit Card Cards that advertise 0% APR look very attractive to many people as well, but, often, they may not be as great as they appear. When choosing between these two kinds of credit cards, you should take your needs and financial future into consideration. Be sure to take into account any fees that are associated with the card such as membership fees, annual fees and processing fees. Also take a look at the rewards programs that are offered with the cards as well. Sometimes, 0% APR may look great until you realize all the fees involved will cancel your savings on interest. Many 0% APR credit cards only offer the 0% APR for a limited time and then go up to higher rates. A low APR credit card may be the best choice since, usually, the low APR will last for the life of the card.

If you decide to choose a low APR credit card, be sure that you use it responsibly and take the time to keep your entire financial future in mind. Some people get stuck in credit card ruts and are constantly transferring balances from one card to another to get a better rate and, while doing so, they are not actually paying off the debt they owe. Finding a low interest credit card is great, but always remember to use them with care to prevent financial problems in your future.

Alan King is a writer that concentrates on helping people better their station in life, for more information you NEED to know on your credit visit his site at http://www.creditcardshost.com

Wednesday, January 17, 2007

Avoid Credit Card Late Fees

By Clark Hunter

One of the easiest ways to mess up your credit is to rack up late fees. Not only does paying late, even a day, negatively impact your credit but it incurs a late fee that can easily send you over your limit. Once you are over your limit you may be assessed an additional over the limit fee and this occurrence will also impact your credit in a bad way. So, what’s one of the best things you can do to protect your credit? The answer is to avoid credit card late fees. But, if money is tight or you have difficulty remembering when payments are due what can be done to avoid late fees? The following tips will help you out considerably.

Tip #1 Pay Online

The best way to avoid credit card late fees is to pay online. You can set up your payments months in advance and even have an email sent to you a week in advance reminding you that your payment will be drafted on a particular date. When you set up this automatic payment then you are sure to avoid credit card late fees because you know when your payment will occur every month and it doesn’t require you to remember the due date. Keep in mind, however, that before your bank account is drafted you need to make sure to make a deposit so the check will clear.

Tip #2 Pay When You Receive the Statement

Another way to avoid credit card late fees is to pay your statement as soon as you receive it. That means when your statement comes in the mail you simply take out your checkbook, write a check, and mail it at the same time. Not letting yourself put the statement down or put it in the “bills to pay” pile will ensure that you make your payment on time and avoid over the limit fees.

Tip #3 Pay off Your Balance

A surefire way to avoid credit card late fees is to pay off your balance. When you pay off your balance there is no balance left to pay on so you won’t need to make monthly payments at all. Occasionally you may have an annual fee to pay so you should always open up your mail to make sure no payment is required.

Once in a while if you know your payment is going to be late and you call you can avoid a late payment fee. Some credit card companies offer this “favor” once a year for certain situations. There are also some programs called credit protection plans that cost a couple of dollars a month to protect you in the event your payment is late or you are financially unable to pay. Regardless, if you really want to make sure you don’t ever have any more credit card late fees you just need to get rid of the credit cards!

For More Info - Avoid Credit Card Late Fees

Monday, January 15, 2007

Judgment Proof, Credit Repair And You

By Vishy Dadsetan

Being deeply in debt usually means that the credit rating is also badly damaged. For some folks in this difficult position, doing nothing could be an effective way of dealing with their loans and credit situation and this is where the clarification of the term “judgment proof” comes in.

People with very little income and property without expectation of change in either have really nothing to lose. They cannot go to jail for bad debt, and both state and federal laws protect them and what they need for essentials such as basic clothing, ordinary household furnishings, food and even Social Security and disability benefits.

In essence it makes no sense for a creditor to take them to court because even if the creditor wins and obtains a judgment, they cannot collect on it. This is what “judgment proof” means.

For these individuals not paying off debt and credit repair seems not to have a tangible impact on their finances.

I said appears because this situation creates a deep hopelessness that really prevents people to take necessary action to improve their lives and their finances. If you are in this position, you know what I mean. I remember working in a neighborhood and with people in this situation for two years and the despair turned into violence was like a dark cloud that hid the sun. It was always there.

If you are in this situation, I know it is hard to think clearly, but wouldn’t it make sense to take steps to begin taking steps to get yourself out of it rather than thinking that you have nothing to lose so why bother?

The point is all the things you can gain and not the things you do not have to lose.

It is true that your creditors may not want to sue you if they do not think you will ever have the ability to pay or that they cannot collect, but what about you? Do you also think that you will never have the ability to pay off a debt?

Debt like most things in life is a reflection of unrecognized opportunities. A lack of ability to pay off debt shows that you have yet to recognize something valuable in yourself that you can contribute and get paid for.

One of the better debt counseling and credit repair suggestions that I can make to a person in debt is within the statement, Know Thyself. Really coming to understand this statement opens up opportunities beyond imagining.

Call a debt counselor or a credit repair specialist, but by all means go to the library and also pick up a book to help you get to know yourself.

* DISCLAIMER: Vishy Dadsetan, or My Favorite Shop, Inc. do not endorse any product or company. This article and website do not provide legal, insurance, or other professional services. If expert assistance is required, the services of a competent professional should be sought. Although Vishy Dadsetan has made every effort to ensure the accuracy and completeness of the information contained in this site, he assumes no responsibility for errors, omissions, inaccuracies, or inconsistencies.

Vishy Dadsetan writes articles that can actually help your clients. Articles that make sense. Articles just like this one. For more information about credit repair and credit counseling checkout MyPersonalFinance.com/blog/

Thursday, January 11, 2007

Your Access To Free Credit Reports

By Benjamin Cortese

That's right; you are entitled to receive one free credit report every 12 months from each of the nationwide consumer credit reporting companies. In addition to consumers who are eligible for a free credit report through the Annual Credit Report Request Service; consumers in some states are eligible for a free credit report under state law. The following states have laws that make free credit reports available to consumers: Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey and Vermont.

Commonly called a credit report, what a credit report is really is a credit file disclosure. A credit file disclosure includes a record of anyone who has received a consumer report about you within a certain period of time. These are often referred to as "Inquiries". The credit file disclosure includes certain information that is not included in a consumer report about you to a third party, such as the inquiries of companies for pre-approved offers of credit card companies, or medical account information.

A credit report includes 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 report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

You are also entitled to a free report if a company takes adverse action against you, like denying your application for credit, employment or Insurance. You have up to 60 days to request your report after a decline. You're also entitled to one free report a year if you're unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of identity theft.

Ben Cortese is a developer and business analyst for the financial industry and develops affiliate powered websites. Learn more at www.InetSite.net and apply for credit wisely at www.Best-Rate-Cards.com.

Copyright 2007. Article can be reprinted as long as author credits are given and content remains unchanged and intact.

Sunday, January 07, 2007

How Long Negative Information Really Stays On Credit Report And Does It Matter?

By Tim Gorman

Whenever you apply for a loan on a car or house, or whether you apply for a credit or store card, your credit history will probably be looked at by the vendor. They do this to protect their investment; after all if you are doing business with someone then you would want to know about their financial history wouldn’t you? So when you next apply for a financial product you should give a thought to any old debts (even if they are now cleared up), or even any missed payments that may show up on your credit history. But many people wonder how long negative information really stays on credit report and how much notice the lenders really take of it?

The question, how long negative information really stays on credit report, is not an easy one to answer. If it is a major financial disaster such as going bankrupt, then it can be there for about ten years. Although if the creditors are repaid, then many credit reports will take it off in around seven years. Of course this doesn’t mean that you cannot deal with finance houses. Actually you should try to build up a good credit history after bankruptcy by taking out pre-paid credit cards etc. and always making sure that everything is paid up when it is due. This can make a great deal of difference to your credit score and help you to rebuild you reputation.

So how long negative information really stays on credit report is really dependent on the type of problems you were having. After all everybody has missed the occasional payment here and there and it may be that even if this is still on your credit history then it will not be looked on too badly by the credit company.

Of course it is not only negative information that is important, so wondering how long negative information really stays on credit report might not be the thing to be worried about. The credit score can also be adversely affected by a lack of credit cards etc, where the company can see that you have made payments regularly. So taking out credit can be a positive thing if you a good payer and can boost your rating. So the best way to maintain a good rating is too use the credit system and make sure that you always pay your bills on time and then whatever your credit history, you will be well on the way to making it better.

For more information on free credit reports and tips on finding a cheap credit report try visiting http://www.free-online-instant-credit-report.info, a website that specializes in providing tips, advice and credit report resources to include information on reviewing your personal credit report.

Tuesday, January 02, 2007

Credit Card’s Dirty Little Secrets

By Michael Killian

Do you know about credit cards and their dirty little secrets? I make my living knowing about them and I was unable to answer all the questions at a great quiz from the PBS Frontline program Secret History of The Credit Card at Credit Card Quiz. Take the quiz and see how much you do or don't know about universal default, and other credit card issues. Then read this article for more dirty little secrets this great PBS special offered. Here are a few apetizers:

UNIVERSAL DEFAULT - did you know the credit card company can raise your interest rate if you are late on ANY payment? I don't mean late just to the credit card but to ANYBODY! Be late on your phone bill, car, house... ANYTHING. Or if in the eyes of a creditor you simply have to much outstanding credit, all bets are off regardless of whatever interest rate you signed up for.

The logic is simple. The industry believes it is within its rights to protect its interest in a more risky unsecured loan venture. Therefore, it is not unreasonable to raise rates if it has reason to think risk of being repaid has changed. And as a lender, the creditor has every right to view your credit file any time it wants... all of your file and not just its own payment history.

MINIMUM NOTICE CHANGES - If the above is not bad enough, consider the consumer with on time payments every month on everything. No problem, right? WRONG! Buried within the contract (that contract law attorneys admit they have great difficulty interpreting), is a clause that allows the company to change your interest rate "at any time, for any reason, as long as the holder is given 15 days' notice." That's right. They can change their mind AFTER you make a purchase at 6.5% (for example) and any former agreements are null and void. How can a purchase price be changed after the sale? No other industry can do this but the credit card company.

USURY OR NOT - According to Frontline, "There is no federal limit on the interest rate a credit card company can charge." In fact an interest rate of 35% is not unheard of. This is because in the 1980s South Dakota and Delaware eliminated the cap on usury laws which is what constitutes the maximum allowable interest to be charged. Have you ever noticed the return address on your credit card statement? Chances are it is Delaware or South Dakota. Gee, I wonder why.

DEADBEATS and REVOLVERS - Deadbeat use to mean someone not taking responsible action. This is not true in the upside down credit industry. In credit card bill jargon, "Deadbeats" pay their balances off in full every month. They are deadbeats because the industry receives very little profit off of these responsible consumers. On the other hand, "Revolvers" roll credit card balances over month to month and never pay in full. This is the ideal customer because of the profit generated. Then there are "Rate Surfers" or "Gamers" who shift usage between credit cards based upon interest rates.

FEES - Again quoting Frontline, "In 1996, the U.S. Supreme Court in Smiley vs. Citibank lifted the existing restrictions on late penalty fees. This means simply, there is no limit on the amount a credit card company can charge a cardholder for being even an hour late with a payment." But this has opened a Pandora's box for not only late fees, but over the limit fees and bad check fees as well. A lawyer who worked on the Smiley case says he believes penalty fees which use to be $5 or $10 could rise to $50 in another year. Now the consumer not only must contend with a higher rate, but late fees as well. Additionally what if these fees put them over the limit creating still another fee. It is a never ending spiral towards bankruptcy.

MINIMUM PAYMENT - Consumers use to be required to pay 5% of the outstanding balance. But slick credit card marketers suggested implementing a 2% required minimum payment. This was advertised as consumer friendly with "easy low payments." The truth is, the tactic allowed consumers to increase their debt because of the lower payment which in turn created more profit through higher debt over a longer time period.

Selected Senators and Congressman as well as other consumer credit advocates have tried fruitlessly to pass legislation to overcome some of these deficiencies. Unfortunately even banning college campus credit solicitation and simple disclosure on billing statements go down in defeat because of a very powerful credit lobby groups. Let your congress know how you would feel about a simple statement beneath the the amount of minimum payment stating something like, "With a minimum payment, your current debt will take xxx years to pay off and the cost to you in interest will be $xxx."