In November 2011 I discussed CoreLogic’s new consumer report, the CoreScore Credit Report.  CoreLogic made this report available to lenders on December 7, 2011.  CoreLogic is another consumer credit reporting agency. They collect credit reports from the three major credit reporting agencies – Equifax, Experian and TransUnion – clean up the reports, merge them and sell them to the mortgage industry.  Now they have added proprietary and other data to the reports.

CoreLogic Credit Report

Approximately 100 million U.S. consumers will have a credit report at CoreLogic compared to 200 million at the three major credit bureaus. The CoreLogic credit report combines the traditional credit report data from the three major credit reporting agencies, along with CoreLogic’s proprietary data which includes: read more »

In early December 2011, TransUnion, one of the three U.S. credit reporting agencies, released its annual forecast on consumer credit for 2012.  Its forecasts are based on economic assumptions, such as gross state product, consumer sentiment, unemployment rates and real estate values.

Mortgage delinquencies are expected to rise and then decrease by the end of 2012; credit card delinquencies are expected to continue to decline.

Mortgage delinquencies

TransUnion predicts that mortgage loan delinquency rates (ratio of borrowers 60 days or more past due) will decline to 5.95 percent at the end of 2011 and decrease to 5 percent by the end of 2012.  Mortgages have declined from fourth quarter 2009 to second quarter 2011 and are expected to rise through first quarter 2012 and decline the remaining three quarters of 2011. Mortgage delinquencies declined by 7 percent in 2011 and are projected to decline by the same amount in 2010, while the year-to-year increases from 2006 to 2009 were 50 percent. read more »

The U.S. Consumer Financial Protection Bureau (CFPB) has been in the news quite a lot lately.  It was created to police financial products marketed to consumers. It has written a credit card agreement that is simplified and written in plain English. It is designed to be understood by a seventh grader, compared to present agreements that are at an eleventh grade level.  The purpose is to make the credit card agreements easier to understand minus the legalese and clarify credit card costs, risks and terms.

New Agreement

The average credit card agreement contains 5,000 words compared to this new agreement which is approximately 1,000 words and two pages long. It is broken down in three sections – costs, changes, and additional information.  There will be an online glossary to explain terms such as billing disputes, privacy, rights, interest rate calculations and the consequences of late payments. read more »

In late 2011 FICO, the company behind the ubiquitous FICO credit score, conducted research on score trends from October 2006 to April 2011 using a random sample of 10 million U.S. consumers with credit reports.  I have discussed this research in previous blogs and FICO has conducted more research to provide answers to the following questions:

How much has consumer credit behavior changed over these years of economic stress?

Do shifting levels of delinquencies reflect changing behavior?

How much impact is mortgage pressure having on bad credit behavior? read more »

The short answer is yes. The better answer is…

This is often called locate or skip locate.  Both creditors’ collection departments and collection agencies review credit reports to obtain information to assist in debt collection.  They use credit reports to try to locate the debtor and/ or determine their ability to pay.  They look at the last known address, phone number, current payment information and recent updates on the credit report.   This also lets them know whether the debtor owes money to other companies.

If the collectors are unable to contact the debtor, they can use services offered by three credit reporting agencies, Equifax, Experian and TransUnion, that alerts them when there are updates to the credit report.  Examples of alerts are personal information, credit information and credit inquiries.  The company can select what information triggers the alerts. read more »

Auriemma Consulting Group conducted an online survey of 509 U.S. adult credit card users in September 2011 regarding payment priorities. Payment priorities shifted from credit cards to mortgages; credit cards were the number one priority in 2009 and 2010, but moved to number three in 2011.

Highlights

When the responders were asked their top financial obligations,  83 percent said credit cards,  59 percent  said utility payments, and 51 percent said mortgages or rent.  Payment priorities did not match their financial obligations. When asked about their highest priorities, 77 percent of respondents selected mortgage payments as the first, 52 percent selected utility payments next and 38 percent selected credit cards as third. Compared to 2009, credit cards were the first priority, mortgages were the second and auto loans were the third. The percentages were not given by Auriemma for the 2009 survey. read more »

You may have noticed businesses that offer title loans, or at least you’ve seen or heard advertising for them. Some of these businesses not only offer title loans, but also check cashing and pawn loans.  These are what I called “2nd tier” loan options, and they are becoming more popular than ever.  Here’s the low down on these options…

Title loans

What are title loans? Car title loans use your car as collateral for a loan, but you must own your car free and clear.  You hand over the car title and extra set of keys, and if you don’t pay, they can take your car.  Since there is no credit check, only income verification, those with poor credit are more prone to get these loans.

High interest rates

Title loans are marketed as emergency loans, similar to payday loans. They are usually for 30 days with amounts usually ranging from $300 to $2,500. The interest rates can be 30 percent a month, which is 360 percent annually. The lender usually lets you borrow up to 50 percent of the car value, which is substantially lower than its value.  The borrower signs loan papers, with the terms which include the car as collateral. read more »

Recently a study was conducted by researchers from three universities – Louisiana State University, Texas Tech University and North Illinois University – to determine if there is any correlation between credit scores and personality and job behavior. Their finding were that there was a correlation between credit scores and personality, but not with credit scores and job behavior.

Credit scores and personality

According to the research being agreeable or friendly is related to those with a low credit score. In other words, nice people have lower scores. The explanation is that someone who is nice is more likely to co-sign for a credit card or loan for a friend or family member. They don’t turn down the sales clerk who asks them to apply for a credit card. read more »

I get on my soap box this time of year to remind you to get free copies of your credit reports from all three credit reporting agencies – Equifax, Experian and TransUnion. You are entitled to receive a free credit report from each company every twelve months, according to the Fair Credit Reporting Act (FCRA).  Have you ordered any this year? If not, go to www.annualcreditreport.com to get your free report.   Did I say free?  Unfortunately free scores are not included.

Free from certain states

In addition, seven states have laws that give you one free credit report annually from all three companies.  The states are Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey,  and Vermont. If you are a resident of one of these states, you get one for the federal law and one for the state law, which is two a year per company, or six free a year.  Georgia is two per year. read more »

Consumer Reports National Research Center conducted a nationwide survey from July 1 to 10, 2011 of 1,258 adults 18 years and above regarding credit cards. Over one third of responders had at least one problem with their credit card company in a year and saw slight improvements in how they were treated by credit companies this year compared to last.

Credit cards are one of the lowest-rated services that Consumer Reports has analyzed with only 51 percent of responders highly satisfied with their credit cards in 2011 compared to 45 percent in 2010.  Thirty five percent of responders had at least one credit card problem in the last year, such as new annual fees, higher interest rates, lower credit limits, or limits on rewards.  The number of responders that experienced unwelcome news about lower credit limits decreased from 37 percent in 2011 from 47 percent in 2010.   Taking this into account, it is surprising that only 12 percent of responders said their credit card companies had treated them unfairly in 2011.  The proportion decreased from15 percent in 2010 and from 22 percent in 2009. read more »