Linda Boscia, Business Development Specialist from Better Qualified accepts thanks and a coffee mug from Mika Hon, Club President-Elect, for her presentation on managing and repairing your credit.
DID YOU KNOW… Your credit score can cost or save you thousands of dollars?
As most of you know, you carry three FICO scores, one from each of the three Credit Bureaus: Experian, TransUnion, and Equifax. Each of these scores is based on information the bureau keeps on file about you and, as this information changes so does your score. These scores affect the terms and conditions (interest rate, amount, etc.) lenders will offer you at any given time. What you might not know is that the credit bureaus are terrible at maintaining, updating, and ensuring the accuracy of your information. Between 25%-75% of all credit reports contain false and inaccurate information.*
This past Sunday February 10, 2013 60 Minutes did a segment on the credit reporting industry and, what they found might be quite a surprise to you. There are many experts out there that believe the credit bureaus are violating the Fair and Accurate Credit Reporting Act every day. These violations can be costing you thousands of dollars every year. We live in a credit driven world and, your credit scores have become the most important numbers in your life.
How do you know if your credit scores are costing you money every month? Well, you can go to sites such as www.annualcreditreport.com and get a free report but, keep in mind these reports DO NOT give you your FICO score. The FICO scores are the standard score in the US, used in more than 90% of lending decisions to determine your credit risk. Called “FICO scores” because most credit bureau scores used in the US are produced from software developed by the Fair Isaac Corporation. Also, have you seen the commercials for FREE credit reports on TV? I’m sure you realize that nothing is actually FREE but, you probably don’t know that these companies are owned by Experian, TransUnion, or Equifax. Experian owns www.freecreditreport.com and TransUnion owns www.truecredit.com. These spin off companies are aimed at “helping” you check your credit (once again, they do not supply you with your actual FICO score, and most are lacking ALL of your credit information). What these “money making arms” of the credit agencies are REALLY doing is sucking you into one of their services so, they can sell you one of THEIR premium products!
What can you do about it? When was the last time you checked your reports? You have to know what’s on your reports and you have to know what your credit scores are. There are 200 million Americans who have a credit report in the US but, only 44 million people actually checked their reports last year You can’t assume that everything is o.k. What to do if you want to dispute or ensure the accuracy of any information on your credit report. Well, here is the fun part, you have to go to EACH of these agencies and go through the dispute process. Best said by Steven Kroft of 60 minutes, “The problem is that it’s not really within the power of the average person using this system to fix the mistakes,” says Kroft. “You feel like you’re up against this machine, and there’s no way to break through.” Besides having financial consequences, the whole dispute process takes an emotional toll on people. It’s just really hard sometimes, to get these things fixed, you feel like you’re up against this machine and there’s no way to break through. After awhile, I think some people start to question their own sanity!”
Has this happened to you? If it hasn’t I guarantee you know someone it has happened to. The smallest mistakes can cost you thousands over the length of your loan, and these mistakes can keep you from getting that home, apartment, car, and these days even that job you have always wanted! These two links are from a recent 60 Minutes, watch and be ready to me amazed!
We can help. Better Qualified is an accredited business with the NJ BBB with an “A” rating. Our CEO Mr. Paul Oster is a certified FICO Pro who has been featured on Fox Business News, Foxnews.com, CBS radio, and the Wall Street Journal Report.
Bad credit is something you don’t want associated with your finances. Unfortunately, you may have less than stellar credit at some point in your life. Credit scores represent a person’s credit worthiness, designed to show a lending institution who is a good investment, and who is… not so much. Banks believe that credit scores — i.e. past financial behavior — are a good indication of an individual’s future financial behavior. Whether or not you agree with that statement, the negative effects of having bad credit are undeniable.
Here’s a list of things that can get pricey or are unattainable if you have bad credit.
1. Car insurance. Insurance carriers in 47 states check your credit score when arriving at a rate. They’re with the banks in assuming that your credit score will indicate how risky of an investment you are. This means that you may have higher than average rates for years or that you may not be approved for insurance coverage at all by a certain carrier, depending on how low your credit score is.
2. Mortgage loans. If you’re trying to buy a home you will most likely apply for a loan. You can be certain that financial institutions look at your credit score during the process. Bad credit means possibly being denied a loan or can result in being charged higher interest rates. This is because the amount of interest you pay is based on your level of risk and the current market rate. The worse your credit is, the higher your level of risk is and the higher your interest rates will be. This difference can amount to tens of thousands of dollars over the course of a mortgage’s lifetime. Worst case scenario, if you fail to repay debts on time, you might be tagged with Moorcroft Debt Collection Agency, which would give you a hard time.
[Related Article: 4 Ways Time Can Help Your Credit Score]
3. Credit cards. If you are approved for a credit card, you can bet on having higher than average interest rates. Credit card interest rates range anywhere from 7 percent to 36 percent. With a good credit score you can expect to land somewhere between 10 percent and 19 percent. With a bad credit score, you can expect to be somewhere around 22 percent and up.
4. Car loans. You’ll likely need a loan when purchasing a vehicle as well. And banks will check your credit score before approving your financing; interest rates on your loan will sway with the results; results could vary by up to 2 percentage points.
5. Cell phone plans. Did you know that some cell phone carriers, like car insurance carriers, check your credit score? They do — another reason why it’s important to pay your bills.
6. Job hunting. Under the Fair Credit Reporting Act it is legal for a future employer to review your credit report with your written approval (they don’t check your score, however). Hiring managers can use this information when making their decision. Some states do have laws that limit the use of credit information in the hiring process.
To make sure that your credit does not interfere with your employment, interest rates, your ability to buy a cell phone or a vehicle, or your car insurance rates — make sure to take control of the situation by obtaining your free credit report from AnnualCreditReport.com, and checking your credit score, which you can do for free once a month using Credit.com’s Credit Report Card.
With the holiday season now over and the new year in effect, many of us are coming back down to the real world. We now need to figure out how much money we just spent on credit cards and, what should we do with the new retail credit cards we just opened? Let me guess, the temptation was just too much and, the 10% – 20% discount you received by opening that new account saved you a nice chunk of change? Was it too good to be true? I hate to be the bearer of bad news but, IT WAS!
Here’s a little secret: the reason department stores are giving you that huge discount is because, many of you will pay more in interest than the initial discount. These stores are also counting on the fact that you will now spend more money than originally planned. Question, “Did you read the fine print as you signed for that account?” I’ll bet the answer is NO! Don’t feel bad; most of us don’t read the fine print. I bet you missed the part where they explain that shiny new card came with an APR of around 25% and, usually these cards carry a lower credit limit.
Modest purchases on cards with lower credit limits will result in highly leveraged cards and lower credit scores. The credit bureaus only like you to carry a balance of 30% or less of your over-all credit limits. Example: If your total credit limits equal $1000, you should never carry balances above $300. This is called your Utilization Ratio and, it will account for 30% of your overall credit score. Keep cards open and active but, always strive to keep your balances below 10% of the credit limits. Keeping a small balance is actually better for your credit scores than, paying the balances off in full.
Confused yet? It’s crazy, they want us to use credit, but they give us ABSOLUTELY NO IDEA ON HOW IT WORKS! That is what I am here for! I want to help you by giving you a great avenue to get back on your credit worthy feet. If you find your credit rating to be low, you can always try improving it by yourself or, by contacting a credit repair agency. Buyers beware and be aware of companies claiming to help people repair their credit. Always ensure that the company you choose is an accredit company with the BBB and, that they have a good rating. There are numerous scams and unscrupulous companies out there. What you need is a company that will actually help you repair your credit. In my opinion, one of the best companies is BETTER QUALIFIED. Better Qualified will repair, help maintain, and protect your credit ratings. BQ uses a time tested and proven process. Better Qualified is a NJ BBB accredited company with an “A” rating. Every program is customized and tailored for the individual client.