Archive for July 31, 2012

Credit scores and car insurance: if you don’t succeed, try again

Credit scores and car insurance: if you don’t succeed, try again
News from Fox Business:

Three congressmen recently proposed a bill that would eliminate credit scores from the list of factors used by car insurers to determine rates.

The bill, H.R. 6129, titled the Ban the Use of Credit Scores in Auto Insurance Act,  would amend the Fair Credit Reporting Act so that reports on consumer credit can’t be used in the underwriting process. It was sponsored by Reps. Hansen Clarke (D-Mich.), John Conyers Jr. (D-Mich.) and Bennie Thompson (D-Miss.) and was referred to the U.S. House of Representatives Financial Services Committee

“The cost of insurance for everyday people is simply too high,” Clarke said in a July 16 post on his Facebook page. “We have to end insurance rating factors that are unfair. Companies penalizing citizens for their credit score and other ‘redlining’ practices must end.”

Michigan’s car insurance premiums rank as the country’s third most expensive, with 2012 models averaging $ 2,013 a year. Mississippi came in at No. 19 at $ 1,502, according to a Quadrant Information Services analysis of insurance rates.

Conyers, in a July 12 Facebook post, said, “Auto insurance rates should be based on your skills and responsibility behind the wheel, not extraneous factors outside your control.”

Credit scoring as pa…………… continues on Fox Business

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10 Things Credit Scores Won’t Say – Smartmoney.com

10 Things Credit Scores Won’t Say – Smartmoney.com
News from 10 Things Credit Scores Won’t Say – Smartmoney.com:

1. “You may never know your real score.”

Roughly 200 million consumers have a FICO score, which ranges from 300 to 850 and is used by most lenders to determine whether to approve them for financing and at what terms. This score is based solely on the information in consumers’ credit reports. While consumers can check their generic FICO score, which weighs how well they have been managing their credit, it’s unlikely they’ll ever know the exact score a lender sees when they apply for credit.

More than 45 FICO scores are available to lenders, says John Ulzheimer, president of consumer education at SmartCredit.com, a credit monitoring site, and a former manager at FICO. There are FICO scores that assign more weight to certain characteristics, such as borrowers’ credit card activity, or history with car loans, mortgages or installment loans (that include furniture and jewelry payment plans). Car loan lenders, for instance, often pull a FICO auto score which weighs more heavily a borrower’s past car loan activity. Even if they have a stellar generic score, their auto score can be lower if they missed a car loan payment or never had a car loan, which could leave them with a higher interest rate than expected, says Barry Paperno,…………… continues on 10 Things Credit Scores Won’t Say – Smartmoney.com

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How to Improve Your Finances
News from Business 2 Community:

Popular Today in Business: All Popular Articles

Finance

Each and every individual wants to improve their finance and have a lavish life. So people look for opportunities and procedures through which they can increase their finances, reduce their expenses and enhance their bank balance. Among the other, financial investment is considered to be the best option to improve your bank balance and income.

Following are the ways to improve your finances:

  • To improve your finances, you need to pay all your credit bills and clear off your debts. If in your credit report, it is unveiled that you have outstanding dues, it will put a bad impression. It acts against your credit score and hence it is always advisable to pay all your debts. Reduce your credit card limits and cut down your expenses in order to lower the burden of debt.
  • Do not make any outstanding credit bill wait for long. D…………… continues on Business 2 Community

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FreeCreditScore.com isn’t for free

FreeCreditScore.com isn’t for free
News from Albany Times Union:

Q: What is your opinion of FreeCreditScore.com? I see their ads everywhere and wonder, What’s the catch?

A: The site has flooded television and other media outlets with their attention grabbing and musical advertising. I’ve noticed their ads (how could you not!) claiming that you can get your credit score for “free.”

The parent company that owns this business is Experian, which has a checkered history of deceptive advertising for their sister site, FreeCreditReport.com. (See http://www.ftc.gov/os/caselist/0223263/0223263.shtm.)

When I closely watched their recent ads, I had no idea what they were selling. Their name and little jingle are all about getting your “free credit score,” of course. But, what are you really getting?

By signing up on their website, you can indeed get your Experian calculated credit score for “free.” Obscured, however, is the fact that what FreeCreditScore.com actually is selling is a credit-monitoring service for $ 14.99 per month — that works out to $ 179.88 per year! The commercial states, “Offer applies with enrollment in FreeCreditScore.com” but fails to say what that means or that it even costs anything.

Seven days a…………… continues on Albany Times Union

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Qualifying for a loan isn’t easy

Qualifying for a loan isn’t easy
News from Fort Worth Star Telegram:

Home-buying tips

Mortgage rates have plunged to record lows, but it’s not easy to qualify for a loan. Some advice:Improve your credit score. It’s essential to getting the best interest rate. Check your score and dispute any errors before applying for a mortgage.Compare loan choices. Fixed mortgages offer the security of knowing your rate will never rise. But an adjustable-rate mortgage has even lower rates and might work if you expect to move within a few years.If you have a small down payment, look at a Federal Housing Administration mortgage or a conventional loan with private mortgage insurance.Shop around. Check with several lenders, not just one recommended by your real estate agent. Compare interest rates and closing costs, and ask for references.Get your paperwork ready. Home loans demand more documentation than ever. Pay stubs, tax returns, bank statements, credit card receipts and more may be required. Start savings receipts months before applying for a loan.— The Record (Hackensack, N.J.)

Looking for comme…………… continues on Fort Worth Star Telegram

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New Score Says You Have Better Credit, But Will It Get You a Mortgage?

New Score Says You Have Better Credit, But Will It Get You a Mortgage?
News from TIME:

The recession and its aftermath, including stubbornly high unemployment, did a number on Americans’ credit scores. The average person’s credit score is 655, according to Credit Karma. Unfortunately, the average credit score you’ll need to get a mortgage is 764, or 770 if you want to refinance. Into this gap, two companies have partnered to create a new credit score they say does a better job of measuring mortgage risk — and found that most of us have better credit than we thought. Over 70% of consumers scored higher with this new score, and 24% saw increases of more than 50 points. The big X factor is when — or if — lenders will flock to this new standard.

The score is derived from a new credit scoring model developed by FICO score creator Fair Issac Co. and data company CoreLogic, who say it offers a more accurate assessment of borrowers’ creditworthiness by using data not usually connected to credit scoring. The two companies announced the model several months ago, and the new score — which bears the somewhat unwieldy title of the FICO Mortgage Score Powered by CoreLogic — just made its debut.

(MORE: Why the Housing Market Isn’t Recovering Faster)

While prime and even subprime le…………… continues on TIME

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Creditinfocenter Releases iPhone Credit Repair App

Creditinfocenter Releases iPhone Credit Repair App
News from Sacramento Bee:

/PRNewswire/ — Credit Info Center, the leader in online personal finance self-help information, announces the release of a free credit repair iPhone app. The app allows users to browse through the process of credit repair, which are divided into four easy-to-understand steps. In addition to the iPhone, the new Credit Repair App can be used on the iPad, including the new iPad 3. “Credit Repair is actually a simple process, one you can handle on your own,” says Kristy Welsh, editor of Creditinfocenter and CEO of Creditinfocenter’s parent company Web Nation, Inc. Welsh says the app will help make the process of fixing your credit report less overwhelming. “The app, which has Internet links to additional free information on Creditinfocenter, helps to make the process of credit repair less intimidating by diving things into four easy steps.”

Experts tend to agree with Welsh – that credit repair is something anyone can do on their own. “It’s a matter of getting your credit report, writing letters, reviewing the results and repeating the process until you achieve the desired outcome,” explains Welsh. “Th…………… continues on Sacramento Bee

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Todd Ossenfort: Debt Capacity Score will improve credit counseling agency’s …

Todd Ossenfort: Debt Capacity Score will improve credit counseling agency’s …
News from Virtual-Strategy Magazine:

Todd Ossenfort of Todd Ossenfort Consulting and Chief Operating Officer of South Dakota based Pioneer Credit Counseling believes that a new debt repayment probability indicator will improve credit counseling agencies ability to negotiate debt consolidation plans for consumers.

Rapid City, South Dakota (PRWEB) July 25, 2012

Todd Ossenfort, Chief Operating Officer of South Dakota based Pioneer Credit Counseling believes that a new unsecured debt repayment probability indicator, known as the Debt Capacity Score, may be a better indicator of an individual’s ability to restructure their debt through services provided by credit counseling agencies.

In early studies, the Debt Capacity Score differs dramatically from the FICO score developed by the Fair Isaac Corporation and used by most financial institutions in measuring a borrower’s ability to repay debt.

“The Debt Capacity Score differs from the FICO score in that the FICO score measures the probability of an individual’s ability to repay debt using historical indicators, whereas the Debt Capacity Score is a snapshot of the individual’s current capacity to repay their debt obligations,” notes Ossenfort.

According to To…………… continues on Virtual-Strategy Magazine

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The credit-hire price sting

The credit-hire price sting
News from Telegraph.co.uk:

– Repair work at well above market rates, and often for work that is unnecessary.

– Vehicle storage which is charged above market rates. According to Swiftcover it has received bills for cars that were actually stored free of charge at residential addresses.

– Replacement vehicles charged at up to double the market rate, creating additional costs for insurers and drivers.

In some cases, says the insurer, credit hire firms have even given customers vehicles which were not insured, leaving motorists at “huge legal and financial risk”.

Robin Reames, Swiftcover’s chief claims officer, said: “It’s easy to see why vulnerable motorists who have just suffered an accident use credit hire companies and it’s important to stress that we have a good working relationship with about 70 per cent of the credit hire companies we come into contact with. However, a minority is responsible for passing on enormous costs to the insurance industry and placing honest motorists at huge personal risk.”

Swiftcover’s findings come weeks after the Office of Fair Trading (OFT) said that the car insurance market was “dysfunctional”, and provisionally referred it to the Competition Commission.

The OFT estimated that artificially high car hire and repair charges added significantly to drivers’ premiums, and said that some insurers were conniving with garages an…………… continues on Telegraph.co.uk

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How to repair your credit score

How to repair your credit score
News from Fox Business:

Repairing your credit score may seem daunting, but it is not impossible. You just need to commit to doing whatever is necessary to clean up your credit. Use the following steps to boost your credit score.

  1. Get a copy of your credit report before you do anything else. The information in your credit report is what determines your three-digit credit score. Free copies of credit reports from the three major credit reporting agencies are available at www.annualcreditreport.com. This is the only agency approved by the federal government to provide free credit reports every 12 months.
  2. Scrutinize your credit report closely. You won’t see your credit score in the report — you can purchase that separately from FICO. What you are going to find in a credit report is a summary of your financial history. The credit report can be relatively short if you don’t have much of a credit history, or many pages if you have had c…………… continues on Fox Business

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Tips for improving your credit score
News from Pacific Daily News:

Last week, we talked about preparing to buy a home by ordering and reviewing your credit reports and scores. Today, we’ll discuss improving specific areas of your creditworthiness, to put you in the best position possible as you apply for a mortgage.

Establish a pattern of paying on time. On your credit reports, each account includes a record of your payment history. Each month will be marked as “Paid as agreed,” or late, along with the length of time in which the payment was late, in 30-day increments.

When lenders look at your credit history, they want to see that you consistently pay on time. When considering a mortgage application, with a term that can last as long as 30 years, lenders look to your past history to predict the future pattern of your payments.

If you frequently pay late, and your late payments are recent, this can indicate credit risk to a financial institution. To lessen the potential costs that come with that risk, a financial institution may charge higher interest rates than they would offer to a lower-risk applicant.

If you have this pattern, first recognize that this negative information stays on your credit report for a finite period of time: in most cases, seven years. With time, you can replace negative marks with positive ones. Next, your most recent behavior will be considered more…………… continues on Pacific Daily News

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Ombudsman warns of power companies’ credit black-ban

Ombudsman warns of power companies’ credit black-ban
News from The Australian:

‘Six months after the release of the Gonski review into school funding, the government is back where it started’

SIX months after the release of the Gonski review into school funding, the federal government is back where it started: how much money will it provide, and how much does it expect the states to contribute?

…………… continues on The Australian
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