Category Archives: Credit Reports


What Would Cosigning Mean for You?

What would you do if a friend or family member asked you to cosign a loan? Before you answer, make sure you understand what your obligations are.

When you agree to cosign for someone else’s debt, you are essentially guaranteeing payment if that person defaults. You are being asked to take a risk that a professional lender will not take. Think about it: the lender would not need a cosigner if the borrower were a good risk.

Cosigning Means You’re Financially Responsible – Consider the Risks

The obligations associated with cosigning a loan can be more than people expect. So before you put your autograph on the dotted line agreeing to cosign a loan, the Federal Trade Commission requires the creditor to give you information explaining your commitment. It states:

“You are being asked to guarantee this debt. Think carefully before you do. If the borrower doesn’t pay the debt, you will have to. Be sure you can afford to pay if you have to, and that you want to accept this responsibility. You may have to pay up to the full amount of the debt if the borrower does not pay. You may also have to pay late fees or collection costs, which increase this amount. The creditor can collect this debt from you without first trying to collect from the borrower. The creditor can use the same collection methods against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt is ever in default, that fact may become part of your credit record. This notice is not the contract that makes you liable for the debt.”

If you are thinking about cosigning you should consider the following:

  • Be sure you can afford to pay the loan. If you’re asked to pay and you can’t, you could be sued or your credit rating could be damaged.
  • Even if you’re not asked to repay the debt, your liability for the loan may keep you from getting other credit because creditors will consider the cosigned loan as one of your obligations.
  • Before you pledge property to secure the loan, such as your home or car, be sure to understand all the consequences. If the borrower fails to pay, you could lose these items.
  • You may have to pay the full amount of the debt if the borrower does not pay. You may also have to pay late fees or collection costs in addition to the outstanding debt.
  • Ask the lender to calculate the money you might owe. You may also negotiate specific terms of your obligation.
  • Ask the lender to agree, in writing, to notify you if the borrower misses a payment. Doing this will give you time to deal with the problem or make back payments without having to repay the entire amount immediately.
  • Make sure you get copies of all the important contracts.
  • Check your state law for additional cosigner rights.

When Is It Worthwhile to Cosign?

When it’s important to you that the borrower get credit, and you have good reason to believe the borrower will repay the debt, it can be worthwhile to cosign for a loan or credit card.

Parents often cosign for their adult children who have ample income to qualify individually, but lack a solid credit or employment history. By cosigning, parents help their children receive a loan and establish credit in their own name.

Similarly, sometimes a spouse or family member will cosign for a small loan or credit line to help an individual establish or rebuild credit in their own name.

Although the statistics on cosigning support that it’s a relatively high risk, that’s not always the case. There have been many successful situations where cosigning served the interests of all parties. Statistically, though, the risk often outweighs the benefit. Some studies show that three out of four cosigners end up having to repay the loan for the original borrower, so it’s important to take steps to protect yourself if you do cosign.

If you are worried about some of the risks that cosigning carries, you may be able to negotiate specific terms of your obligation. For example, you might want to have your liability limited to paying the principal balance on the loan, but not late charges, court costs, or attorney’s fees. In this case, ask the lender to include a statement in the contract like: “The cosigner will be responsible only for the principal balance on this loan at the time of default.”

If You Need a Cosigner

If you’re in need of someone to cosign a loan for you, talk with family or friends and explain to them that they’ll be helping you to reestablish your credit. Understand that cosigning is a big step for the person agreeing to sign for you, so make sure you make them feel as comfortable as possible about cosigning for you. Show them you’ll be able to repay the loan. Remember that if you fail to repay the debt and the cosigner has to step in to repay it but can’t afford it, then you both will have damaged credit histories. Therefore, the credit you obtain will carry a double weight of responsibility – your obligation to the lender to repay what you borrow and your obligation to your cosigner to live up to the investment they’re making in you.

Whatever your involvement in a cosigned credit transaction, remember that cosigning means extra obligations for everyone involved and consider your decision carefully.


What Consumers With Great Credit Do Right

Many consumers may know what makes up a credit score, but they may not have the know-how to improve their score in actual practice.

The good news for consumers is that, if they know what makes up a credit score, then they’re already more knowledgeable than most about what steps to take to set themselves on the path to a score in the 800s. According to a report from CBS Moneywatch, taking a score from “good” to “great” is all about knowing how the system works.

About 13 percent of all consumers have credit scores of 800 or higher, the report said, and that’s because those people know the credit score system inside and out. They know, for example, that the combination of payment history and the amount of credit they owe versus what they have available accounts for about two-thirds of their credit score.

Payment history makes up 35 percent of a score, and something as simple as making on-time payments can provide a gigantic boost to any credit score. The report said the amount of money a consumer owes versus what they have available in credit makes up 30 percent of a score. The other 35 percent is made up of a combination of the amount of time a consumer has had credit, how much new credit they have (the less the better), and the different types of credit a consumer uses.

That 13 percent of consumers whose credit is superb all have roughly the same characteristics, the report said. When it comes to on-time payments, those people haven’t been late on one in the last seven years, and their debt levels are no higher than 35 percent of their overall limit per credit account.

As for the other third, the report said consumers with scores above 800 own four to six credit cards, and have one installment loan – like a car payment or mortgage – with an impeccable payment history. They’ve had no bankruptcies, foreclosures, charge-offs or collections at any point, and a very low number of credit inquiries in the last six months, usually fewer than three. Finally, they’ve had their credit accounts for an average of 10 years, with a small number of accounts showing 20 years of good history.

A recent Bankrate report said that “good debt” stays on a credit report longer than bad, typically an extra three years.


Understanding Your Credit Utilization Ratio

Have you ever heard the phrase, too much of a good thing , when something went wrong? Well, this adage definitely applies to your use of credit cards. Specifically, spending too much on your credit cards can be too much of a good thing when it comes to your credit score. Whether you have one credit card or five, whether your credit limit is $500 or $5,000; lenders expect you to spend responsibly. Part of that means not using too much of your available credit.

In fact, this notion of limited spending is one of the primary factors contributing to your credit score. Commonly referred to as a credit utilization ratio , its the amount of outstanding debt you carry on your credit cards, when compared to your overall credit limit. A utilization rate of more than 30 percent may you to lose several points. On the other hand, using less than 30 percent will earn you points.

Calculating Your Credit Utilization Ratio

Its a good idea for you to calculate your rate, so you know where you stand and can make any needed adjustments. To do so, divide the total amount of your credit card balances by your total credit limits.

For example:

  1. Lets assume you have two credit cards, each with a credit limit of $10,000. Your total credit limit would be $20,000.
  2. Now, lets say you are carrying a balance of $4,000 on one card and $6,000 on the other. Your total balances add up to $10,000.
  3. To calculate your rate you divide your total credit balance of $10,000 by your total credit limit of $20,000, to get a credit utilization rate of 50 percent.

How High Should My Credit Utilization Be?

A credit utilization rate less than 30 percent is most beneficial to your credit score. If thats easy for you, try to get it less than 20 percent! For those who are already using more than whats recommended, it wont necessarily be easy, but focus on paying down your debt. While its challenging to pay off debt, it will definitely be worth it! A low utilization rate is so significant to your score, you will be glad you got rid of some of that debt.

Manage your credit utilization rate by following a few suggestions below:

  • Know what you spend on your credit cards each month. If you are already exceeding the recommendation utilization rate: stop spending and start paying it off!
  • Know what your total credit limit is, so you can spend accordingly.
  • Never max out your credit cards, even if you pay your bills off completely, it could still be reported to the credit bureaus.
  • Utilize cash and debit cards to round out your spending.

For as significant a factor to your credit score as this is, it is a fairly easy one to control. Check your limits and then be sure to keep your spending in check. If youve got any balances, work to reduce them to a recommended level.


Types of Credit Reports

There are two main types of credit reports offered by single bureau credit reports and 3 credit bureau reports. The main difference between these two credit reports is that a single bureau credit report provides the information on your financial history as reported by one of the three major credit bureaus (in this case Experian), and a 3-in-1 credit report provides a compilation of your financial history as reported by ALL THREE major credit bureaus (Equifax, Experian and TransUnion), complete with a line-by-line comparison of the information so you can easily see discrepancies.

Both single bureau credit reports and three bureau credit reports contain the following information:

  1. Personal identification information: your name, date of birth, phone number, previous addresses, social security number, and current and previous employers.
  2. Credit history: your history of paying bills at retail stores, banks, mortgage companies, and finance companies.
  3. Public records: items that may affect your creditworthiness such as bankruptcies, court judgments, and tax liens.
  4. Inquiries: a list of any credit grantors and other authorized parties who have viewed your credit report, as well as lists of companies that have requested to view your credit report and credit score for the purpose of offering you credit.

Single Bureau Credit Report

A single bureau credit report provides your credit information from only one of the three major credit bureaus (an Experian credit report, Equifax credit report, or TransUnion credit report). Technically, the three major credit bureaus are supposed to house the same credit report information, but they don’t always. Therefore, it’s possible that the credit report you choose to order only provides 1/3 of your whole credit picture. For a complete picture of your credit history, your best bet is to order a three bureau credit report.

Three Bureau Credit Report

A 3 bureau online credit report provides your credit from all three major credit bureaus, Experian, Equifax and TransUnion. The 3 bureau credit report lists all of your credit accounts, line-by-line, bureau by bureau, which allows you to see everything that’s being reported about your credit and your financial history. Larger banks usually report credit information to all three major credit bureaus, but smaller banks and other lenders may report your credit information to only one. Therefore, as mentioned above, your credit report at one bureau won’t necessarily match your credit report at another. For the most complete picture of your credit history, a 3 bureau credit report is your smartest option. A 3 bureau credit report will paint a clear picture of all your files so you no longer have any doubts regarding your credit history.


For more information on how to check your credit report, or how to instantly get your 3 in 1 credit report, FICO Credit Score, and identity theft insurance, go to  now!


FACT Act: The Basics

If you’re looking for information about your credit score, you’ve probably heard of something called “the FACT Act.” The FACT Act, which stands for Fair and Accurate Credit Transactions Act, was signed into law in 2003. It is a revision of the Fair Credit Reporting Act.

Basically, the FACT Act allows consumers to get one free credit report from each of the three national credit bureaus every 12 months. The three national credit bureaus are Experian, Equifax, and TransUnion. Some consumers prefer to review reports from all three bureaus at the same time, while others prefer to order a credit report every four months from a different bureau.

Since the FACT Act was signed into law, many people have taken advantage of their rights to review information on their credit reports every year. The law required the three credit reporting companies to establish a central source for obtaining credit reports. You can find more information about the FACT Act by calling 877-FACTACT.

The only way to know if your credit report contains errors is to check your report periodically. If you’re planning on applying for a loan in the future, it’s also a good idea to obtain your current credit score. There are things you can do to improve your credit score before you apply for a home loan or request financing for a large purchase. In addition to requesting a credit report, many consumers take part in credit monitoring services to track changes to their credit report and to help protect them from identity theft.


Data Breach Laws in Senate

The U.S. Senate is now holding hearings and calling witnesses as it weighs whether or not to pass the Data Security and Breach Notification Act of 2010, a report from AXcess News said. The bill would require companies to give consumers, whose records were compromised in data breaches, either two years of credit reports or two years of credit monitoring free of charge. It would also require businesses responsible for these incidents to meet certain notification requirements depending on the size of the breach.

Credit monitoring is an invaluable tool in protecting yourself from identity theft. Not only will such a service alert you any time someone tries to open a line of credit using your personal information – which may have been exposed in a data breach – but it will also allow you to gain access to your credit report 24/7.

Checking your credit report is an important step in securing your finances and keeping yourself from becoming an identity theft victim. Scan these documents as often as possible, so that you can identify any potential errors that may be on them. It’s important to note that identity theft isn’t the only cause of these mistakes, as the majority of credit reports contain at least one discrepancy.

If erroneous entries on your credit report go undetected, your credit score can end up adversely affected.

In addition to your credit report, make sure to thoroughly examine your monthly financial documents, such as credit card and bank statements. Doing so will allow you to keep any eye on every expenditure you made in the previous month, and notice any charges and withdrawals – large or small – that may have been made without your knowledge.


Damaging Effects of Missed Mortgage Payments

For most homeowners, your mortgage is the largest line of credit listed on your credit report. Given the significance of such a large loan, lenders place a heavy weight on how you manage that account. Part of that is your ability to make payments on-time and in full. So when you a miss a payment, the impact to your credit score can be substantial.

Because there are hundreds of scoring models out there, there is no way to say exactly how many points will be knocked off your credit score when you miss a mortgage payment. However, it does help to consider the original standing, which can be a factor.

The Higher They Climb, The Harder They Fall

It seems unfair, but a higher credit score may lose more points for a late payment than a lower score. Not only that, but it can take longer to recover once the score has significantly dropped.

For example, let’s say you and your neighbor have significantly different credit scores, a 750 and a 650 respectively. What happens when you both miss your next mortgage payment? Your score may drop nearly 100 points to 660, while your neighbor’s may only reduce by 50 points to 600, depending on the scoring model used.

That being said, what’s really important is where that three-digit-number lands on the scale of riskiness versus creditworthiness. Did you go from an excellent score to a moderate score? Did you neighbor’s score drop into the riskiest category? This is what will truly impact your borrowing terms.

Paying your mortgage on time is a pivotal factor in maintaining a favorable credit score. Take measures, such as setting up a budget and automating mortgage payments, to ensure your loan obligations are met and your score is protected.


Credit Ratings: The Basics

There’s a lot of talk about credit ratings when dealing with personal finance, and while it’s a very important subject, there is also a lot of confusion surrounding the idea of the credit rating. Here are some facts about credit ratings that everybody should understand.

A credit rating is a guideline for potential lenders about how good a credit risk a particular person is. Since past performance is the best predictor of future performance, this rating is based on the borrower’s history of borrowing and repaying, in addition to the likeliness that the person will repay as a function of his or her financial ability to repay.

When someone talks about credit ratings, what they are usually referring to is a credit score. Your credit rating and your credit rating report are generated by one of three credit rating agencies: Experian, Equifax or TransUnion. Since each credit rating agency may have slightly different information and ways of calculating credit ratings, provides services enabling you to get all three reports and scores from each agency.

More Information

There are a few additional things you need to know about credit ratings. First – a credit report does not automatically come with a credit score. In fact, you are entitled to one credit report per year from each credit reporting agency, but to get your score you will have to pay for it separately. Second – each agency has its own scores that it has developed. Check your credit score, so you can see yourself as lenders do, and work to get the best possible terms on your account. Try to understand what your score means to lenders and how you can improve it.

Obtaining Credit Ratings can provide you with a 1 or 3 bureau credit report. This will enable you to get a clear picture of your credit rating. It’s important because when you know where you stand with respect to your credit, you will then be able to determine the steps you need to take to fix it. Your best approach if you are trying to repair your credit rating is to assess your score and report, use tools to figure out what steps you need to take to improve your score, and then check your credit rating from month-to-month to make sure that you are seeing steady gains. When your credit score has risen to a healthy number, ideally something in the 700s, you’ll be ready to look for a loan for that big purchase, such as for a car or home.


Credit Monitoring Services

You may have heard of something called “credit monitoring” and wondered if it was right for you. People monitor their credit reports to track improvements in their credit scores, prevent identity theft, and correct errors in their reports.

Credit reports often contain errors. While errors in the spelling of your name may not harm your score, repeated errors in reporting of your payment history may lower your score significantly. Many people have experienced report errors due to identity mix-ups. If another person’s credit history shows up on your report, it may damage your overall score.

People often invest in credit monitoring services to detect identity theft. These credit services provide you with alerts when there are significant changes to your report. This allows you to stop identity fraud in its tracks, limiting the damage done to your credit and your reputation.

A credit monitoring service may provide you with information on who is making inquiries on your credit history. If a company is inquiring and you haven’t made a request for credit, you should investigate the claim. A credit monitoring service may provide you with alerts when too many inquiries are made on your credit. A large amount of inquiries can not only damage your credit, but may also be an indication that someone is trying to manipulate your credit information for immediate gains.

However, before you can totally protect your finances, you have to first know how to accurately read your credit report. Without having the proper directions on how to understand your credit report, you will have a difficult time determining if you have been the victim of identity fraud. offers a clear breakdown of what exactly is on your credit report, and what information you need to pay special attention to. In addition to this, provides helpful information that explains what makes a good or bad credit score, and what you can do to improve your credit score over time. For further reading, features articles on why a 3-in-1 credit report is better than a single bureau credit report, how and why important life events can affect your credit report, and also the relationship between your credit score and the ability to receive proper insurance services. For all of your credit monitoring questions or concerns, features up-to-date facts and credit articles to help keep you informed and in control of your financial future. Get reliable tips on how to improve your credit score, and let help ensure that you are protected against the damaging pitfalls of identity fraud. For maximum security, receive your Credit monitoring report with, and make certain that your finances are safe.


Understanding Credit Management

When it comes to credit management, there’s a lot more to it than just making sure you don’t overspend – or allowing your spouse or child to overspend. There are more factors to consider when you sign up for a new credit card, such as:

  • What’s the annual percentage rate on the card?
  • How is the minimum payment calculated?
  • What’s the grace period on payment?
  • Does this company provide credit protection services?
  • What about ID fraud protection?

The most important factors listed above are credit protection and ID fraud protection services. Why? Because you have control over the credit card you choose. You have control over how much you choose to pay off – and in how much time. It simply requires being smart about which card you choose. You can do the research to make sure you find the right card for you.

But when it comes to identity protection and credit monitoring, you are at the mercy of theft. The only way to protect yourself is by taking advantage of choosing the right online credit protection service. offers comprehensive online credit monitoring, so you’re instantly notified via email if you’ve been robbed of your identity.

Consumer Credit Protection

Do you really need a credit monitoring service? Yes. It’s no longer just an “extra“. It’s no longer a feature. It’s a necessity. In fact, you will find that the major credit bureaus all offer their own protection services. Experian monitoring, Equifax monitoring, and TransUnion monitoring were all created because ID thieves have become more creative and more sophisticated, and identity theft in general has become much more rampant.

Identity theft is the No. 1 source of complaints to the Federal Trade Commission. Over 255,500 people reported being victims of identity theft in 2005, up from 247,000 in 2004. The Federal Trade Commission reports that identity theft cost consumers $5 billion and 300 million hours and affects approximately 10 million people in the United States each year. (Visit for more statistics and important credit protection information.)

Credit Monitoring

Think of credit monitoring the same way you think of the gas gauge in your car or truck. You must check that gauge every so often, just to make sure you don’t run out of gas. It’s similar with monitoring credit. You might not be as likely to monitor credit reports if you’ve checked yours recently, but after a couple of months you will need to make sure your record is intact. And not unlike that gas gauge, you also need a warning if something is happening – which is why ID fraud protection and online monitoring are key. Monitoring services provide more than just a read-out, telling you everything is secure – they give you peace of mind. In fact, a monitoring report arriving monthly allows you to not even look at that gas gauge. You’ll know if something is wrong instantly.

You can protect credit quickly and easily by visiting This is a one-stop resource for monitoring and identity protection.

The problem of identity theft is growing everyday, which is why identity protection is critical – and why more and more Americans are employing the services of credit monitoring and online credit protection services.

Why do you need ID fraud protection? An identity thief gets your personal information several ways. They are as follows:

  • Stealing records from a place of business either by hacking the information, conning employees, or paying off a current employee
  • Stealing your mail, including bank or credit card statements, card offers, checks and tax information, and even the mail you leave for the postman
  • Rooting through your trash or the trash of businesses
  • Posing as a landlord, employer or card company on the phone or through the mail
  • Stealing your wallet or purse
  • Completing a “change of address” form to have your mail sent elsewhere

Identity thieves are becoming more and more creative all the time, so ID fraud protection is vital. Not just to protect your credit and your assets, but to keep a peace of mind. Using the latest monitoring reports through online protection services, you can become instantly alerted if there is a significant change in your credit report. Some sites like even offer monthly monitoring reports – so you’re always in the know.