The credit bureaus denied my credit application!!  Wrong!  This is one of the common fallacies abut credit bureaus.  Credit bureaus compile the credit information supplied by data furnishers such as credit grantors (credit card issuers, mortgage lenders, auto finance companies, banks, credit unions, and oil companies), collection agencies, and public records (tax liens, bankruptcies and judgments).  The credit bureaus only report the information supplied to them from the data furnishers. They do not Read the rest of this entry… »

First, what is a balance transfer?  Credit card issuers want to increase their share of your wallet and will offer you low interest rates in exchange for you transferring the balance from another credit card to their credit card.  This can be as an offer on a new credit card or for a card you have currently.  Some credit card issuers are willing to go as low as 0% interest on the balance transferred.  But, how do these impact your credit scores? Read the rest of this entry… »

Your credit limit is the predetermined upper most boundary of your credit card spending capacity. So, if you’ve got a $10,000 credit limit that means you can charge up to $10,000 worth of products and services. The credit limits on your credit cards are commonly reported to the credit reporting agencies, Equifax, Experian and TransUnion. But, there are some issuers who choose to not report credit limits to the credit bureaus.  What impact, if any, does this have on your credit scores? Read the rest of this entry… »

Medical providers such as hospitals, doctors, and clinics don’t normally send information to the credit bureaus. Medical bills are not usually reported to the credit bureaus unless the bills have been either turned over or sold to a collection agency. Collection agencies contribute information to the credit bureaus and one of the key reasons is that it gives them leverage over the debtor to get a payment. Read the rest of this entry… »

Some of the key components of the credit score are based upon on length of credit, how currently you pay your bills, how much of your credit card credit limits you use, inquiries, and other minor measurements.  Age is not really a factor in your credit score, but it’s never that easy. Read the rest of this entry… »

I recently received this question from a reader regarding how to deal with old unpaid collections.

“John, I am applying for a mortgage loan and the loan officer is telling me that I have to pay off two ancient collections in order to close on my loan. These collections are from when I was in college for unpaid utility bills.  Stupid, I know. They’re 6 years old and if I understand the rules they have to be deleted in one more year. If I pay them won’t that update the activity on the collection and start the seven year clock over again?” Read the rest of this entry… »

When you file a claim on your auto insurance policy, it is reported to insurance claims databases compiled LexisNexis.  LexisNexis is the most widely used by the insurance companies. These companies are consumer reporting agencies, just as Equifax, Experian and TransUnion. In fact, LexisNexis’s insurance services use to be ChoicePoint, which use to be Equifax Insurance Services. Read the rest of this entry… »

I received the following question from a reader late last week and, frankly, couldn’t wait to write an article responding since it’s such a great question.

“John, I am in the middle of refinancing my home loan and I’m in the process of getting approved. The lender pulled my credit reports and FICO scores and there’s just no way they’re correct. My highest score is 808 and my lowest score is 802. I’ve never ever missed a payment in my life.  I’m 44 years old and no missed payments. I have perfect credit and I deserve a perfect score of 850 across the board. Why do I contact in order to have this fixed?” Read the rest of this entry… »

Credit inquiries occur when a company pulls your credit report, which is usually the result of you seeking credit. The company name, their industry (i.s. auto, mortgage) and the date they reviewed your credit report are listed on your credit report.  The companies that can review your report are limited based upon a valid business need such as lending, employment, tenant screening, insurance underwriting, and others. This is specified by the Fair Credit Reporting Act (FCRA). Most inquiries remain on your credit report for 24 months.  Read the rest of this entry… »

I received the following excellent question from a Twitter follower yesterday.  You can follow me on Twitter at @johnulzheimer.

“John, I have about $8,000 in credit card debt and a company called me telling me that they can help me settle that debt for about $6,000.  It sounds pretty good but I’m suspicious.  Does that sound legit?  Will it help my credit scores once I’m out of the debt?” Read the rest of this entry… »