Wednesday, February 11, 2009 | Improve Your FICO Credit Score and VantageScore

You have two options when it comes to repairing your credit ...

hire someone, preferably an attorney who knows the credit laws;
do-it-yourself using a good quality guide and your 3-in-1 credit report;

Whichever way you decide to go, here are just a few tips to keep you on track:

Don't fall for scams that tell you to create a new credit file ... that's credit fraud if you do it, and can make you subject to legal repercussions;
Do read the Fair Credit Reporting Act so you have an idea of your rights while you go through the credit repair process;
Get yourself organized and committed to the process, there is no overnight fix;
If you use an online service, you want to know what the fees will be, monthly or "as you go" is best, and you want to be able to cancel at anytime;
Always act in a cooperative and professional manner when dealing with creditors or collection agencies;
Don't make threats, however subtle, if you can't back them up.

Deciding whether to hire a credit repair firm, or doing it yourself, depends a lot on your willingness to work, as well as your ability to be organized and follow through on the process. If you really don't want to deal with it yourself, and would rather a professional, we recommend one who is well-versed in the use of the Fair Credit Reporting Act to protect your credit, and who will handle all the detail work for you.

What is a "FICO SCORE"?

FICO is the acronym for Fair Isaac Corporation, a publicly-traded corporation (under the symbol "FIC") that created the best-known and most widely used credit score model in the United States.

A FICO score is between 300 and 850, the median score is 723. The FICO score is calculated statistically, with information from a consumer's credit files. The FICO score is primarily used in credit decisions made by banks and other providers of secured and unsecured credit. Banks and other institutions using such scores as a factor in their lending decisions may deny credit, charge higher interest rates, demand more collateral, or require extensive income and asset verification if the applicant's FICO credit score is low.

FICO scores are intended to show the likelihood that a borrower will default on a loan; a separate score, the BNI, is used to determine the likelihood of a borrower's declaring bankruptcy.

Free Ways To Get Your Credit Report

Don't forget your once a year free report:

annualcreditreport.com

Some states have laws requiring the bureaus to provide more than one free credit report per year. To find out if your state requires this and more details about the cost of ordering your report, see the article on state credit report costs.

If you are turned down for credit, employment, or insurance within the last 60 days. Take the written proof of your turn down and mail it to the credit bureaus, requesting your free report.

If you were charged higher rates and fees or deposits based on a credit report issued by a credit bureau, you have the right to get a free copy from that bureau.

If you certify in writing that either you are unemployed and plan to seek employment in the next 60 days.

If you are on welfare.

If you write to say you were a victim of fraud.

If you are too impatient to wait for this, you can always order your credit report online.

Credit Repair Fraud

The truth is, no one can legally remove accurate and timely negative information from a credit report. But the law does allow you to request a reinvestigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this.

Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act, you are entitled to a free copy of your credit report if you've been denied credit within the last 30 days. You can also dispute mistakes or outdated items for free. Ask the credit reporting agency for a dispute form or submit your dispute in writing, along with any supporting documentation.

If you decide to respond to a credit repair offer, the Better Business Bureau suggests you beware of companies that:

* Do not tell you your legal rights and what you can do legally for free;

* Recommend that you not contact a credit bureau directly;

* Want you to pay for credit repair services before any services are provided; or

* Advise you to dispute all information in your credit report or take any action that seems illegal, such as creating a new credit identity by obtaining a federal employer identification number to use instead of a social security number. If you follow illegal advice and commit fraud, you may be subject to prosecution.

Mortgage Tips For When You Raise Your FICO Score

Sometimes so much is talked about how to solve the problem of having bad credit, but what about when you have an excellent credit rating? Good credit is considered to be a credit score of 650 or higher. How can you get the best interest rate and loan terms to make your good credit history work for you? Even with excellent credit, you have to be careful not to get talked into a loan that may not be the best one you could qualify for.

Here are some tips to help you find the best loan for your great credit history:

1. Apply with as many mortgage companies online that will provide you with more than one quote per application, as long as they will not pull your credit with your application. If you are about to start applying for a mortgage, you don't want to have your credit pulled until you have narrowed down which mortgage company you want to work with. Every time your credit is pulled, your FICO credit score drops.

2. Talk to your lender about closing costs. If you have excellent credit, the lenders should be falling over themselves to get you a loan. Ask for special treatment. Find out what fees your broker or lender may be able to reduce or remove from your closing costs. Find out if they will match lower fees offered by another lender.

3. Make sure your lender is offering you excellent customer service. Are they returning your calls quickly? Are they answering all of your questions to your satisfaction? Have they thoroughly researched all of your loan options and offered you more than one possibility? If they haven't, you should probably look somewhere else. With good credit, you have no reason to be a quick, easy sale for a lender.

4. Research interest rates, mortgage information and articles online so that when your lender offers you a loan package, you will know about the fine print ahead of time. Whether you are purchasing for the first time or refinancing, it will help you to understand more about the mortgage process.

Improve Your FICO Credit Score and VantageScore

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What is a "FICO SCORE"?

Free Ways To Get Your Credit Report

Credit Repair Fraud

Mortgage Tips For When You Raise Your FICO Score

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