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Do Not Let Your Credit Report Score Hit You Out |
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Till recently, consumers' credit report score was a closely guarded secret, which could only be revealed to the lenders by the credit bureaus. The average consumer was kept in the dark and lenders were allowed to reveal the credit report score only when denying credit. Things have changed over the past year and the firms that used to keep credit report score as a secret, are now selling to consumers at prices which vary from $9 to $80. You may think that this is unjustified but it is worth spending that money for the following benefits: The basic function of the credit report score is to determine your access to credit and the rate of interest that will be levied on the loan. Auto- and homeowners-insurance companies are finalizing premiums after viewing the credit report score to assess the chances of the customer's future claims. Employees are increasingly using credit report score to screen job applicants and landlords are renting out only after consulting credit report score. Your credit history is thoroughly squeezed into the credit report score to predict the likelihood that you will repay on time. Moreover, a bad credit report score can mean more expensive borrowing costs or denial of the loan altogether. In 2001, California enacted a law that made it obligatory for mortgage lenders and credit bureaus to provide the information to consumers. Moreover, mortgage lenders have to provide credit scores for free to borrowers for real estate in California. Credit bureaus, on the other hand, are allowed to charge a reasonable fee under California law but they must provide the information to any Californian who asks for it. However, credit bureaus have extended this facility to consumers nationwide. The charge for providing the full credit file has been limited to $9 by the federal Fair Credit Reporting Act but credit bureaus, by combining your credit report score with the file, have been able to hike the price up by $5 or so. Companies charge up to $80 for yearlong access to credit report and scores. In 1950s, Fair Isaac, a California research firm invented the credit scoring and it's called the FICO score. Although it is the credit industry standard, many reputable scoring models have replicated the FICO. These scores range from about 350 to about 850 and the midpoint is about 720. There are procedures set out by Federal law for correcting inaccurate information in a credit report. When you view your credit report and if you find that there are inaccuracies in it, you can challenge the same immediately. After that the credit bureau has 30 days to check with the creditor who had supplied the information. The bureau will do the correction if the creditor agrees. You can also contact the creditor to pursue the matter. If nothing happens, you have the right to add a statement explaining the dispute, to your file. A new process called rapid re-scoring is gaining popularity in the mortgage business, whereby the lender's agent can deal directly with the credit bureau to correct or update bad credit information that is holding down a credit report score. Rapid re-scoring can add up to 80 points to your credit report score. Depending upon the amount of information that has to be changed, the charges to the applicant are determined. Your credit report score will decline if you let your bills slide until you start paying them. Moreover timely bill payment is one of the main factors in the mathematical calculation for determining the credit score. The other factors include the number and types of open credit lines, your loan balances and the age of your credit lines. It is very important that you should not let your credit report score to slide and make your monthly payments on time and ensure that your credit report score stays good so that you can live a stress-free life. |
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