Financial Education Services - The Six Worst Items To Appear On Your Credit Report

It's easy to make mistakes or experience hardship when it comes to paying your bills. Some mistakes are so detrimental; want to avoid them at all cost. Since future creditors and lenders use your credit report to make decisions about you, it's important to understand how each of these impact your credit file.

1. Charge-offs

Missing your payments for 6 months or more could cause your creditors to deem your account as uncollectible. When this happens, the creditors write that debt off as a loss against their income taxes. Charged-off accounts are allowed to be reported on your credit report for seven years. Just because a debt is charged off (or written off) does not mean the debt is forgiven. The money is still owed. The creditor will usually sell or assign the debt to a collection agency or a lawyer to effect collection.

Some companies continue to charge interest, but most don't. If they do decide to keep charging interest, they have to continue to report it as income. Most companies would rather just write it off and be done with it.

Having charge offs on your credit report usually results in the consumer being denied credit by other lenders. Even worse, it can also affect the interest rate that other lenders charge on current debts even if those lenders were not impacted by the charge off themselves.

If you find yourself late on your payments, you should always try to contact the lender and let them know you are having problems meeting your financial obligations. Ignoring the situation and letting it get to charge off status always makes it worse. You can usually avoid your account being charged off by at least letting them know you intend to pay and by at least making small payments as often as you can.

It's much easier to get a paid charge off removed from your credit report than it is an unpaid charge off. When you dispute the charge off with the credit bureaus, they have 30 days to verify the account with the creditor. If the account is paid, many times the creditor will just ignore the verification request. They really only report charge off so that they can damage your credit hoping that it will turn make you want to pay them off.

2. Collections

Not only will creditors charge-off your account after a period of non-payment, they may also hire a third-party debt collector to attempt to collect payment from you. Your credit report may or may not be updated to reflect a collection status. Sometimes the debt collector places an entry on your credit report or the original creditor places a note on your report indicating the account is in collection status.

3. Bankruptcy

Filing bankruptcy allows you to legally remove liability for some or all of your debts, depending on the type of bankruptcy you file. Your credit report will reflect each of the accounts you included in your bankruptcy. Even though the bankruptcy information can legally remain on your credit report for seven to 10 years, you can begin rebuilding your credit soon after your debts have been discharged.

4. Foreclosure

If you default on your mortgage loan, your lender will repossess your home and auction it off to recover the amount of the mortgage. This process is known as foreclosure. When your home is foreclosed it can severely damage your credit, limiting your ability to obtain new credit in the future. A foreclosure can remain on your credit report for seven years.

5. Tax liens

When you don't pay property taxes on your home or another piece of property, the government can seize the property and auction it off for the unpaid taxes. Even if your home is foreclosed because of a tax lien, you are still responsible for the mortgage loan. Non-payment of the mortgage will also hurt your credit. Unpaid tax liens can remain on your credit report for 15 years, while paid tax liens remain for 10 years.

6. Lawsuits or judgments

Some creditors may take you to court and sue you for a debt, if other collections fail. If the lawsuit is accurate and a judgment is entered against you, it can remain on your credit report for 7 years from the date of filing, even after you satisfy the judgment.

For information on how you can solve these issues as well as potentially remove them from your credit report please visit United Credit Education Services

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Credit Reporting 101

Let's take on the fundamentals of the credit reporting system. From the big three credit bureaus, TransUnion, Equifax and Experian, to your rights under the Fair Credit Reporting Act, this article will help you navigate the credit report maze.

The credit reporting agencies - TransUnion, Equifax and Experian (formerly TRW) are the three national credit reporting agencies that keep records on consumers. The reporting agencies work with lenders, creditors, insurers and employers to update and distribute your information to the appropriate institutions. Here's an example of how the system works:

1. When you apply for a new credit card the creditor requests a copy of your financial history from the reporting agencies. This causes a "hard inquiry" to be recorded on your credit report.

2. The creditor uses your credit reports and scores along with income and debt information to determine what rates to offer.

3. You start to use the new credit card and the creditor reports your activities to the credit reporting agencies about every 30 days.

4. The credit reporting agencies update your credit report as they receive new information from creditors or lenders.

5. Your credit profile changes based on your financial activity. The next time you apply for a credit card or loan, the process repeats.

Your credit report - Your credit report is divided into six main sections: consumer information (address, birthday and employment), consumer statement, account histories, public records, inquiries and creditor contacts. When you open a new account, miss a payment or move, these sections are updated with new information. Old negative records will stay on your credit report for 7-10 years. Positive records can remain on your credit report longer. Not all creditors report to all three agencies and the agencies obtain their data independently so your reports from TransUnion, Equifax and Experian could be substantially different from each other. That's why it's important to check your three credit reports every 6-12 months to ensure that the information is accurate and up-to-date.

Correcting inaccuracies - Under the Fair Credit Reporting Act, consumers are protected from having inaccurate information on their credit reports. If you find an inaccurate record on your report, try contacting the creditor or lender associated with the mark first. These companies can usually correct the mistake and send an update to the credit reporting agencies. If you can't make progress this way, you can also dispute the inaccuracy directly with the credit reporting agencies.

Working the system - Managing your credit and maintaing a good credit history can lead to better rates on major purchases. We recommend that you check your credit reports every 6-12 months or at least 3 months before a major purchase in order to guard against damaging inaccuracies and identity theft. Routine check-ups along with paying your bills on time, keeping your credit card balances below 35% of their limits and correcting any negative inaccuracies will help you maintain a healthy credit profile.

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Financial tips for couples

Across the country there are thousands of cheerful couples saying "I do" to a lifetime of love and dedication. You have to wonder how many of these brides and grooms are aware that they could also be saying "I do" to hefty mortgage payments and troubled credit reports. Understanding the financial commitments that come with marriage can help to maintain marital bliss long after the ceremony. Here's what you need to know:

1. Talk About It - Openly discussing your finances with your fiancé is the best way to prevent future disagreements. Talk about your spending habits, your savings and your financial goals so that you will both be on the same page. Develop a plan for managing your money after the wedding. Will you open joint accounts? How much do you want to save each month? Work together to create a money management strategy that fits your needs.

2. Wedding Expenses - Planning the wedding of your dreams can sometimes lead to a nightmare of debt. The average wedding now costs $22,000, according to the Condé Nast Bridal Infobank, a hefty sum that can lead to big credit card bills after the honeymoon ends. Talk with your fiancé about how much you can afford to spend without breaking the bank. Be creative about cutting back your budget: using potted flowers and making the invitations yourself can help you shrink your costs without reducing your style.

3. Credit - Understanding your sweetheart's credit history can help you avoid future surprises. Your fiancé's credit could have a dramatic impact on your rates for co-signed loans and joint accounts in the future. If there are past credit problems, work together to clean things up and reduce debts. Starting your new life together could be a lot smoother with good credit.

4. Joint Accounts - Don't worry, your credit reports won't automatically merge together when you get married. Only when you open a joint account, become an authorized user or co-sign on a loan will a record appear on both your credit reports. Combining your finances this way can be a great way to get the best deal on a major purchase. Be careful though, any negative reporting associated with the account could mean double damage.

5. Love Nest - If you are planning on buying a home together, give yourselves at least six months to save up a down payment and reduce your debt-to-income ratio. A few months of financial improvement can help you save thousands on your mortgage.

6. Stay Focused - Above all else, don't let money problems come in the way of your love for each other. Talk honestly about your financial concerns and work together to get through the hard times. Your relationship is far more valuable than anything money can buy.

For more information contact Mark Bustamonte at 954-707-2932 or visit

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There are 5 things that can affect your FICO Scores

1) Payment History. This has the biggest effect on your FICO scores. It accounts for 35% of your score. Paying a debt n time and in full has a positive impact. Late payments, judgments and charge-offs have a negative effect. You should know that if you make a late payment your FICO score WILL go down.

2) Outstanding Balances. This has a 30% effect on your credit scores. The debt ratio or outstanding balance to available credit is important. Keeping that below 50% will help you credit scores. Keeping it below 30% will raise you credit score even more.

3) Length of credit has a 15% impact on your FICO scores. The longer the time that a credit line is open will help your credit scores go up. It is never a good idea to close an account today. Opening new credit cards will decrease the average length, and therefore hurt your credit score.

4) Type of Credit. This has a 10% impact on your credit score. It's good to have a mix of installment loans like car and furniture loans, home loans, and credit card loans.

5) Inquiries. Inquiries have a 10% impact on your credit score. Hard inquiries for credit have a negative impact on your credit score. Each hard inquiry can cost 2 - 50 points on a credit score. Inquiries stay on your credit for up to one year even though you may not see them after 90 days..

Financial Empowerment Network Team and Prime Financial Credit Services

New Rules Issued by the Federal Reserve and Federal Trade Commission about Consumer Credit

Consumers taking out auto, home mortgages, credit cards and other types of loans will be notified when they are offtered an interest rate that is higher than is customary due to their poor credit histories. This is under new rules issued on 12/23/09 than become effective on Jan., 1 2011.

Lenders traditionally offer borrowers rate and terms based on their credit reports, which reflects the borrowers' ability to repay the loans. This is called "risk-based pricing."

The new rules set forth by the Federal Reserve and the Federal Trade Commission entitle borrowers who receive pricing notifications to also be entitled to a free credit report to check the accuracy of their credit report.

Borrowers will be notified about the higher interest rates "after the terms of credit have been set, but before the consumer becomes contractually obligated on the credit transaction," according to the rules.

This notification is required when the lender - based on the borrowers' credit report - offers credit terms "that are materially less favorable" than the terms offered or provided to other consumers, the regulators said.

Lenders will not have to provide this notification if they offer borrowers a free credit score, Federal Reserve attorneys explained. A consumer must normally pay a fee - between $8-$11 - to obtain their credit scores, the attorney said. Credit reports don't contain credit scores, they said.

This provision, announced yesterday, is aimed at helping borrowers better understand the rates they are being offered on particular loans and to get more information about their credit reports.

Keith Dienstl is a member of the Financial Empowerment Network Team and Prime Financial Credit Services you can also visit Credit Repair Services for more information on Keith Dienstl.

Correcting negative errors on your Credit Report

Prior to contacting the credit reporting agency, you should contact your creditor first and then allow a little lead time before sending your dispute letter. By the time the dispute is verified, the creditor will have hopefully made the correction already.

You can also initiate an investigation from many online credit reports by just following the links provided and checking the disputed items as directed. Often times, there isn't a place for remarks so you'll simple check a multiple choice reason for each dispute. The process can often times be easier than drafting a dispute letter.

If changes aren't made and the credit reporting agency says the original information is accurate, it must provide you with a written notice that includes the name, address, and phone number of the person who made the report. If you still disagree, initiate a second investigation. Unfortunately, reporting agencies often try to sidestep that requirement, giving you standard, computer-generated information rather than the facts you need to find the person or department who made the negative report. If your attempts to correct the entry are unsuccessful, you can ask the reporting agency to insert a 100-character explanation next to it that explains your side of the story.

Remember bankruptcies remain on your credit report for ten years, while other types of entries are generally reported for seven years. If an account that was previously past due has been brought current, and has been either paid off or kept current for at least a year, the creditor might agree to an early deletion of the past due references. Additionally, you can use the tactic of disputing a negative item even if you believe it is accurate, but you'll have to follow your conscience on this one.

is a member of the Financial Empowerment Network Team and Prime Financial Credit Services you can also visit Ultrafitcredit for more information on .

Understanding Your Credit Report

A credit report contains all your information that is reported to the three credit bureaus. The three credit bureaus are Experian located in Chester, PA; Equifax located in Atlanta, GA; and Equifax located in Allen, TX. The information reported to the credit bureaus is your payment history that contains the following information:

Personal Information - the personal information on the credit report lists the basic information about the individual. None of the information listed in the personal information effects the credit score calculation. The personal information on the credit report contains any name used, birth name, AKA or any name the creditor has used when applying for credit. The date of birth, current and previous address, employment history, and the dates the information was reported are also listed, credit report.

Summary - the summary section of the credit report contains a categorized list of all the accounts on the credit report. This synopsis allows the viewer a quick review of the credit report and compares the data that is reported to the three credit bureaus.

Account History - The account history on the credit report contains all the account a person has open or closed. This section has credit history of your payments. Each of the account will contain: Account Number, Account Type, Creditor Name, Monthly Payment, Highest Balance Owed, Credit Limit or Loan Amount, Date Open or Closed, Payment History, and if it is a joint or individual account.

Inquires - the credit report contains two types of inquires. The first type of inquire on the credit report is inquires where a business pulled the credit and the second type is when an individual applies for credit. When you apply for credit it remains on your credit report for two years. When you show a history of declined credit applications it makes you look desperate. More than likely a lender will not loan money to a desperate person. Multiple approved applications send a different message. When you're approved for a loan or a line of credit, the lender has made a commitment to loan you the funds. Your ability to repay these lines of credit and loans depends on your income. Your capacity to take on additional debt is diminished by the amount of debt or potential debt outstanding.

Public record information - Public records on a credit report may include information such as judgments, foreclosures, lawsuits, wage attachments, bankruptcies, state and federal tax liens, and past-due child support. This information is reported by county, state, and federal courts to a variety of credit reporting agencies. The agencies retain the information in a credit report and use the information along with other pertinent credit data to determine your credit score. Since public records reflect poorly on your credit rating, you'll want to make sure that this section of your report stays spotless. This information will remain on your credit report for seven years. However, if the record relates to bankruptcy, it will remain on your report for 10 years.

I am a member of the Financial Empowerment Network Team and Prime Financial Credit Services