MyCardBlog

It happens. You put aside some bills that are not high on your priority list in order to make ends meet and a few months down the road you find a letter in the mailbox from a collection agency. Once you pay off the account in full, it becomes a matter of dealing with your credit report. No one wants to have a record of a collection account on their credit history but fear not – there are things that can be done to rectify the situation.

Collection agencies are typically not difficult to erase from your credit report because in general they do not keep extensive records and are often not fully licensed to collect debts. Because of this factor, there are ways to clear your credit record with a bit of effort.

Here are 4 ways to get the collection agency off of your credit report:

Pay In Full for Deletion

For small collection amounts, you can speak to the agency about removing the listing completely from your report in exchange for your paying the debt in full. This method is effective because the collection agency, who expects to only receive a partial payment from which they take a cut, will instead get a larger cut of the full payment. You will need the cash to make the deal but for the most part, the process should be quick and relatively easy.

Make A Settlement Offer

When you are dealing with larger debts, you may want to talk to the agency about settling on an amount you can afford to pay in one lump sum to settle the case with the agreement that the agency will remove the listing from your credit report.

File A Dispute with the Credit Bureaus

You can opt to write a letter to the major credit bureaus, requesting that they investigate the collection account listed on your credit report. The agencies are required to follow up on the investigation and should the collection agencies not be able to prove or provide the accurate documentation about the claim, the listing can be removed by credit bureaus.

Debt Validation Method

Using the regulations of the Fair Debt Collection Practices Act, you can write a letter to the collection agency to request that they prove proof they are legally allowed to collect on the debt listed. Send the letter certified with a return receipt requested. If you do not get a reply in a reasonable amount of time, usually 30 days, send a copy of your certified mail receipt, along with the copy of your letter and a new letter stating they have violated the FDCPA and that you want the collection removed from your credit report or else you will file a lawsuit. This tactic is rather aggressive and you must stay on task to see it through to the end.

Tisha Tolar is a freelance writer providing content for CreditCardAssist.com, where she regularly writes about credit cards, rewards programs and general consumer finance issues.

Mint.com is offering free credit score promotion—free FICO credit score for Mint.com users! This is a limited time offer which is ended on November 26, 2008. This is a special promotion from Mint.com partnered with myFICO.com to offer mint.com users a free credit score.

All mint.com users have received the email titled “Get a Free FICO Credit Score: Limited Time offer to Mint.com users”. The email indicated that:

Through an exclusive partnership with myFICO, you can get this valuable information free when you visit Mint.com before November 26, 2008.

What is FICO credit score?

First, FICO is the acronym for Fair Isaac Corporation, a publicly-traded corporation that created the best-known and most widely used credit score model in the United States. So FICO score is the credit score most lenders use to determine your credit risk. Your score is based on information the credit bureau keeps on file about you. The FICO score is primarily used in credit decisions made by banks and other providers of secured and unsecured credit. Only myFICO actually is offering FICO score to general US consumers. We usually get the credit score from our credit reporting agencies. However, those are not real FICO score. It’s not normal to see there are up to 100 difference in credit scores provided by credit reporting agencies. For example, TransUnion might say your credit score is 756, but Equifax indicates that your credit score is only 687! The reason behind this is those credit reporting agencies are only using similar model to estimate your FICO score but absolutely not real FICO score. Usually, people call those scores are FAKO score to distinguish from the FICO score.

Consumers who received the invitation email can login to Mint.com and click the “Get my FICO score now” tab at the mint.com account. This will lead you to www.freeficoscore.com which indicates that only the first 40,000 responding can get the free FICO score. It’s free. NO credit card required. And no obligation.

You need to put your SSN and address to verify your personal information to get the FICO score.

I have a post named “6 Web Based Personal Finance Tools” which introduces many web based personal finance tools. I think most of the users of the 6 personal finanace websites have received the offer. Since your FICO credit score directly influence your loan rate, and your other financial matters in your life, it’s important to know your FICO score. Do not miss this chance!

Equifax, one of the famous 3 credit report agencies, was just named a technology leader in the 2008 FinTech 100 list by American Banker and Financial Insights. Consumers have been using the service from Equifax for more than 100 years. And Equifax is continuing to promote technical innovations all the time. The latest technique innovation is the introduction of I-Card which is supposed to be an online identity card.

What is the I-Card?

I-Cards (information cards) are just like your driver’s license, passport or other IDs which can be used everywhere to identify who you are. But I-Cards are a little bit special because they can only be used online. You can’t use I-Card at a grocery store to buy alcohols or cigars. In other words, the I-Cards are online equivalent of your driver’s license or passport. I-Cards allow you to show your “online ID” at some ID required websites and e-commerce sites that accept the I-card and conduct online transactions with greater security. It’s expected that the easy-of-use and security of I-Cards will boost the relationships between consumers and businesses and make the online transactions more easy and secure.

What can I-Card do?

• Login to websites with a single click
• Create relationships with those you want to do business with
• Manage your personal data more easily
• Manage the claims that you make to other people and institutions about yourself (for example, you are over 18)
• Prove that you are who you say you are without revealing unnecessary details, by using trusted identity provider

According to the equifaxicards.com, you can use your information cards at any sites show the i-card logo on their screen.

The I-card is a product of Equifax and Parity, a leader in user-centric identity management. After creating an I-Card, the consumer will also be offered Parity’s Azigo I-card management software to enable one-click sign-in and identity verification. (somewhat like the American Express’ Online Assistant)

The first product is the Over 18 I-Card. The “Over 18 I-Card”, authenticated by Equifax, demonstrates the power of I-Cards to enable immediate, secured access to restricted content without site-specific account creation or log-in. Every time there is a requirement of age verification, you should only present your I-Card to prove that you are over 18. A very good demonstration is the watch-this.com which requires you to provide I-Card to watch the video contents on that site (this is only a demonstration site).

More I-Cards products are coming soon.

There are 3 easy steps to get your I-Card:

1. Register and securely authenticated by Equifax.

2. Download and install the Azigo Card selector.

3. Whenever this is a requirement of I-Card, you I-Card is automatically stored in your card selector and ready to use.

I-Card is a new technology product that can secure online activities like online shopping and online entertainments. The I-Card is expected to reduce the online credit fraud and identity theft. Create a new I-Card for yourself today!

This must be one of the hottest topics on the web yesterday. Ocean National Bank is offering free credit monitor service for its customers. Anyone with a promotion code can use it to get free credit monitor service at Equifax, one of the three credit bureaus. Since the promotion code is open to everyone, everyone can use it to get a free 2-year credit monitor service from Equifax and Ocean National Bank will pay for you.

This promotion is listed on the Ocean National Bank’s front page (https://www.eocean.com). About the free credit monitoring service can be found at https://www.eocean.com/freemonitoring.html. Apparently, the service is offered to Ocean National Bank deposit customers only. As they indicated:

In our continuing effort to provide our customers with enhanced privacy protection, we are pleased to offer all of our personal deposit customers free Equifax Credit Watch Silver.

Equifax Credit Watch Silver offers you:

• Email alerts within 7 days of key changes to your Equifax credit file to help protect against credit card fraud (alerts triggered by the lender’s report to Equifax)
• Wireless alerts option
• “No news is good news” monthly message if there are no alerts
• One free Equifax Credit Report with a discount on additional reports
• $2,500 in identity theft insurance with $250 deductible (some limits and exclusions apply)
• Premium customer care, 8AM–3AM, 7 days a week
• Identity Theft Protection news and tips

The truth is there is a leaked promotion code with which you can enroll in the Equifax Credit Monitor service without any payment for two years. Click the link and you will get a free promotion code.  With that code, you can click here to finish the enrollment process without any payment information. So you do NOT need to be an Ocean National bank customer to enroll in the free credit monitor service provided by Equifax.

About Ocean National Bank: A a locally managed commercial bank headquartered in Portsmouth, N.H., with $2 billion in assets and 42 branches in New Hampshire and southern Maine with more than 150 years of operation history.

People without any relationship with Ocean National Bank reported successfully enrolled in the credit monitor service. Personally, I think this is a good deal to catch.

I have talked a lot about hoe to get your personal credit report and business credit report. For many years, there were only 3 credit reporting agencies: TransUnion, Experian and Equifax. However, actually, there is another credit reporting agency: Innovis. Innovis is the 4th and not so well-known credit reporting agency in the United States. Currently, there are only a limited number of companies are using the date from Innovis.

It’s necessary to know what Innovis is and what Innovis can do.

A small credit reporting agency can also have the power of damaging your personal credit. Innovis records you mortgage payment information from Fannie Mae and Freddie Mac. Innovis became a major player at the beginning of 2001, when mortgage financing titans Fannie Mae and Freddie Mac began requiring their mortgage servicers to report borrowers’ payment histories to the new credit reporting agency. The federal government also reports to Innovis about individuals who are late with debt payments to the feds.

Unlike the other big three credit bureaus, Innovis doesn’t sell your credit histories to lenders, insurers and potential employers. Innovis is specialized on build mailing lists that creditors use to determine pre-approve offers. So it’s very important to bear in mind that adverse information on your Innovis credit report, accurate or not, could prevent you from getting excellent credit offers via mail.

Innovis generally offers two products to creditors: FailSafe and New Movers. FailSafe is a database containing names of consumers who are late or who have been late on debt payments. New Movers is a monthly list of people who have reported a change of address to Innovis.

How to get a credit report from Innovis?

Innovis currently offers two convenient ways to request a copy of your Innovis Credit Report: by phone or by mail.

Phone: Call 1-800-540-2505 and after some verification processes, you can get a credit report within 3 business days.

Mail: You can complete the Credit Report Request Form and mail it to Innovis at the address provided below:

• Innovis
• Attention: Consumer Assistance
• P.O. Box 1358
• Columbus, Ohio 43216-1358

In the form, you have to provide the following information:

• Full name
• Social Security Number
• Date of birth (month/day/year)
• Proof of current address, such as a current utility bill, lease arrangement or rental receipt
• One copy of a legible government-issued identification card, such as a driver’s license, state ID card, or military ID card

It’s important to remember that the annualcreditreport.com currently doesn’t offer free credit report from Innovis. However, the annualcreditreport.com is the only place you can pull your credit report from TransUnion, Experian and Equifax for free!

We all know that, Fair Isaac, which created the popular FICO credit score, is making some small adjustments to the way it calculates American people’s credit scores. My previous report pointed out that the authorized user account will not be calculated in your personal FICO score. But according to the latest news, Fair Isaac will re-consider the new change and will take your authorizes user account as a factor of your FICO score. This might be good news for those who want to take advantage of policy.

Last month, Fair Isaac announced that its latest credit scoring system, “FICO 08,” will include authorized user accounts when calculating someone’s FICO credit score. Some credit repair companies used this policy and offered a way for folks with bad credit to raise their FICO scores. You would pay thousands of dollars to get added as an authorized user to the credit card of someone with a great credit history. When that account showed up on the authorized user’s credit report, the person’s credit score would rise. Normally, the authorized user will not receive the credit card.

However, it could be a long wait for us to get the new FICO 08 score. Fair Isaac is still revising the model with the three major credit reporting agencies, after which the company will focus on getting lenders to test and use new FICO. About the authorized user issue, it has been long known that if you have an account with a primary account owner with super credit performance, your credit score will be improved. Could people still do so by getting family members with great credit to add them as authorized users and improve their own credit performance? It seems that Fair Isaac will take this into consideration and make some necessary changes.

If you look at how FICO score are calculated, you would find that you can benefit from being an authorized user in the length of credit history and amount owed which take 45% of your FICO score. But there is still a risk— what if the primary account holders make a mistake? Authorized users could see their credit scores plummet if the primary cardholders default on the accounts.

It’s a really new policy and we should wait until the final result comes out.

We all know that a credit card issuer will look at your credit score, usually referred as the FICO score, before issuing you a credit card. Actually, business lenders use a similar approach or credit scoring system to determine your business credit performance and decide whether or not to give you credit.

Although there are many business credit reporting agencies entered in the market in the past decade, including Experian, the Paydex score from Dun & Bradstreet remains the primary source for business credit scores and reports. A Paydex score is a number from Dun & Bradstreet that is an indicator of your business operation. The Paydex score is the business equivalent to your personal credit score. This score plays an important role in determining whether you get a loan (and loan rate & loan amount etc) and how other businesses deal with yours.

According to Dun & Bradstreet (D&B), the Paydex score is:

D&B’s unique dollar-weighted numerical indicator of how a firm paid its bills over the past year, based on trade experiences reported to D&B by various vendors. The D&B Paydex score  ranges from 1 to 100, with higher scores indicating better payment performance.

More detailed explanation about the Paydex score:

• 100 – Payments are received prior to date of invoice (Anticipated)
• 90 – Payments are received within trade discount period (Discount)
• 80 – Payments are received within terms granted (Prompt)
• 70 - 15 Days Beyond Terms
• 60 - 22 Days Beyond Terms
• 50 – 30 Days Beyond Terms
• 40 – 60 Days Beyond Terms
• 20 – 120 Days Beyond Terms
• UN – Unavailable

You can view a sample Paydex report from here.

How to establish your business credit report?

You can star to build your Paydex score by enrolling in the CreditBuilder or ScoreBuilder programs offered by D&B, but this will cost you some money. Or you can apply for a DUNS (Data Universal Numbering System) number which is an unique nine-digit numbering system that is used to identify a business. and use it to apply for a small line of credit at a company that reports to D&B regularly.

How to boost your Paydex score?

The most important thing is to keep a Paydex account active. And the best way to boost your Paydex score is to pay all of your bills early. Because this score is directly related to how you pay your bills. Or you can pay small bills later but pay large bills early. This might also be helpful but not so good as both pay them early.

How ever, you should put in mind that applying for a busines line of credit is different from the procedure for applying for a business credit card. The application process for a business card usually requires owners to provide their own ITIN or SSN, that is, credit issuers will still pull your personal credit report instead of business credit report. To get a business credit card, you have to maintain a good FICO score. That’s also why individauls can apply for business credit cards.

You already know that when you submit an application for a credit card, the credit card issuer will check your credit score and then decide whether or not to approve your application. If you have a really low credit score, you will be declined. If you have a solid credit, then you probably will get approved. You might also know that if you have good credit score, your mortgage rate will be lower than those without good credit. It seems bad credit can also get something for you but with higher costs. But, actually, there’re many ways that a bad credit can hurt you.

Job

It’s not surprised that your employers will keep an eye on your credit performance. Today more than 60% of companies will check the candidates’ credit score before they issue the offer to them. The reason behind this is employers think the credit problem might cause tension and pressure at work. They may also think if you’re not good at managing your personal credit, you can’t do your job well.

Auto Insurance

Some of you might still don’t know that some insurance companies will pull your credit report when you request a quote from them. They use your credit performance as a factor to decide the rate you can get from them. I have a personal experience with GEICO. When I wanted to quote online at www.geico.com, I have to enter my SSN on the form. Then I asked them why they required my SSN. They replied with:

GEICO, like many property and casualty insurers, uses credit information as part of our underwriting process.  We use this data because of its very strong, statistical correlation with future losses.  Using this information, along with our other underwriting criteria, allows us to keep our rates competitive. The Fair Credit Reporting Act specifically gives insurers permissible purpose to obtain credit data when used for underwriting.

The good point is insurance inquiries do not affect your credit rating and do not count against you.

Many other insurance companies like AAA will also pull your credit report even they don’t have your SSN.

So, the fact is, bad credit might cause higher auto insurance rates.

Cell Phones

Cell phone providers are very strict with your credit performance. If your credit score is not good, you have to pay a certain amount of deposit before they can open a line for you. I know T-Mobile will require $500 or $250 deposit for those without good credit. If your credit is not good, you can only have one line at T-Mobile. If you pay your bills on time in the next 6 months, they may allow you to have one more line (family plan). Or some may only try the pay-as-you-go plans.

Apartment Hunting

Nowadays most rental property companies may require you to give them your SSN and they will run a credit check to see whether you have bankruptcy history, collections or other serious credit behaviors. They might reject your applications if your credit performance doesn’t meet their requirement.

Utilities

Whenever you move into a new apartment, you have to open electricity, water or gas services. When you handle out your SSN, the utility companies will check your credit report. If your credit is not up to their expect, you have to pay a certain amount of deposit. Of course, some of them might add the deposit on your monthly bills.

Above mentioned are little known places that a bad credit might hurt you. Bad credit is no longer a situation that can be isolated from other areas of your life. If you can maintain a good credit performance, you are a step ahead of others.