. RETURN TO HOME PAGE WE ARE THERE WHEN YOU ARE READY! CREDIT REPORTS AND SCORES If you are planning a home purchase in the near future, checking your credit report now is a GREAT first step. Why? If your report contains negative, erroneous or inaccurate information, it could take several months to repair and up-date. The law now allows you to get a free Annual Credit Report that does not effect your credit score and gives you the confidence and peace of mind knowing there are no issues. To assist in this simple task, THE BOONE CREW offers this EASY LINK!...  To get your free copy simply click on..... CLICK FOR FREE CREDIT REPORT This central site allows you to request a free credit file disclosure, commonly called a credit report, once every 12 months from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. It is completely free; however each company will attempt to sell you extra information or add-on services. THE BOONE CREW suggests you decline any offers that cost money with one possible exception; the purchase of the Equifax Credit Score. This will let you know where you stand and will be offered at a discount. Equifax is the primary service provider used in The Carolinas and The East Coast in general. The credit scores from TransUnion and Experian will be of little value unless you utilize an internet lender based on the West Coast or Chicago. While there is a difference from one company to the other, the typical range for credit scores is between 375 and 900, with 375 indicating a poor credit risk, and 900 indicating a high likelihood of repayment. The average credit score in the US is around 680, and scores of this number and above generally receive favorable mortgage interest rates. Have more Questions? WE ARE THERE WHEN YOU ARE READY! FOR MORE INFORMATION... CONTACT DEBBIE VIA OR CALL DEBBIE NOW AT 828-726-9180 RETURN TO HOME PAGE More Info About Credit Reports Credit reporting agencies maintain files on millions of borrowers. Lenders making credit decisions buy credit reports on their prospects, applicants and customers from the credit reporting agencies. Your report details your credit history as it has been reported to the credit reporting agency by lenders who have extended credit to you. Your credit report lists what types of credit you use, the length of time your accounts have been open, and whether you've paid your bills on time. It tells lenders how much credit you've used and whether you're seeking new sources of credit. It gives lenders a broader view of your credit history than do other data sources, such as a bank's own customer data. Creating Your Credit Report Your credit report does not really exist until you or a lender asks for it. It is then compiled by the credit reporting agency based on the information stored in that agency's file. This information is supplied by lenders, by you and by court records. Tens of thousands of credit grantors retailers, credit card issuers, banks, finance companies, credit unions, etc. send updates to each of the credit reporting agencies, usually once a month. These updates include information about how their customers use and pay their accounts. Your credit report reveals many aspects of your borrowing activities. All pieces of information should be considered in relationship to other pieces of information. The ability to quickly, fairly and consistently consider all this information is what makes credit scoring so useful. What's In Your Credit Report Although each credit reporting agency formats and reports this information differently, all credit reports contain basically the same categories of information. Your social security number, date of birth and employment information are used to identify you. These factors are not used in scoring. Updates to this information come from information you supply to lenders. Identifying Information. Your name, address, Social Security number, date of birth and employment information are used to identify you. These factors are not used in scoring. Updates to this information come from information you supply to lenders. Trade Lines. These are your credit accounts. Lenders report on each account you have established with them. They report the type of account (bankcard, auto loan, mortgage, etc), the date you opened the account, your credit limit or loan amount, the account balance and your payment history. Inquiries. When you apply for a loan, you authorize your lender to ask for a copy of your credit report. This is how inquiries appear on your credit report. The inquiries section contains a list of everyone who accessed your credit report within the last two years. The report you see lists both "voluntary" inquiries, spurred by your own requests for credit, and "involuntary" inquires, such as when lenders order your report so as to make you a pre-approved credit offer in the mail. Public Record and Collection Items. Credit reporting agencies also collect public record information from state and county courts, and information on overdue debt from collection agencies. Public record information includes bankruptcies, foreclosures, suits, wage attachments, liens and judgments. How Mistakes are Made When a credit report contains errors, it is often because the report is incomplete, or contains information about someone else. This typically happens because: The person applied for credit under different names (Robert Jones, Bob Jones, etc.). Someone made a clerical error in reading or entering name or address information from a hand-written application. The person gave an inaccurate Social Security number, or the number was misread by the lender. Loan or credit card payments were inadvertently applied to the wrong account. About Credit Scores Along with the credit report, lenders can also buy a credit score based on the information in the report. That score is calculated by a mathematical equation that evaluates many types of information that are on your credit report at that agency. By comparing this information to the patterns in hundreds of thousands of past credit reports, the score identifies your level of future credit risk. In order for a FICO® score to be calculated on your credit report, the report must contain at least one account which has been open for six months or greater. In addition, the report must contain at least one account that has been updated in the past six months. This ensures that there is enough information - and enough recent information in your report on which to base a score. About FICO® scores Credit bureau scores are often called "FICO scores" because most credit bureau scores used in the US are produced from software developed by Fair Isaac and Company. FICO scores are provided to lenders by the three major credit reporting agencies: Equifax, Experian and TransUnion. FICO scores provide the best guide to future risk based solely on credit report data. The higher the score, the lower the risk. But no score says whether a specific individual will be a "good" or "bad" customer. And while many lenders use FICO scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable for a given credit product. There is no single "cutoff score" used by all lenders and there are many additional factors that lenders use to determine your actual interest rates. Other Names for FICO Scores FICO scores have different names at each of the three credit reporting agencies. All of these scores, however, are developed using the same methods by Fair Isaac, and have been rigorously tested to ensure they provide the most accurate picture of credit risk possible using credit report data. Credit Reporting Agency FICO® Score Equifax BEACON® Experian Experian/Fair Isaac Risk Model TransUnion EMPIRICA® More than one score In general, when people talk about "your score", they're talking about your current FICO score. However, there is no one score used to make decisions about you. This is true because: Credit bureau scores are not the only scores used. Many lenders use their own scores, which often will include the FICO score as well as other information about you. FICO scores are not the only credit bureau scores. There are other credit bureau scores, although FICO scores are by far the most commonly used. Other credit bureau scores may evaluate your credit report differently than FICO scores, and in some cases a higher score may mean more risk, not less risk as with FICO scores. Your score may be different at each of the three main credit reporting agencies. The FICO score from each credit reporting agency considers only the data in your credit report at that agency. If your current scores from the three credit reporting agencies are different, it's probably because the information those agencies have on you differs. Your FICO score changes over time. As your data changes at the credit reporting agency, so will any new score based on your credit report. So your FICO score from a month ago is probably not the same score a lender would get from the credit reporting agency today. What is Not in Your Score FICO® scores consider a wide range of information on your credit report. However, they do not consider: -Your race, color, religion, national origin, sex and marital status. US law prohibits credit scoring from considering these facts, as well as any receipt of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act. -Your age. Other types of scores may consider your age, but FICO scores don't. -Your salary, occupation, title, employer, date employed or employment history. Lenders may consider this information, however, as may other types of scores. -Where you live. -Any interest rate being charged on a particular credit card or other account. -Any items reported as child/family support obligations or rental agreements. Certain types of inquiries (requests for your credit report). The score does not count "consumer-initiated" inquiries - requests you have made for your credit report, in order to check it. It also does not count "promotional inquiries" - requests made by lenders in order to make you a "pre-approved" credit offer - or "administrative inquiries" requests made by lenders to review your account with them. Requests that are marked as coming from employers are not counted either. Any information not found in your credit report. Any information that is not proven to be predictive of future credit performance. Whether or not you are participating in a credit counseling of any kind. Improving Your FICO® Score It's important to note that raising your score is a bit like losing weight: It takes time and there is no quick fix. In fact, quick-fix efforts can backfire. The best advice is to manage credit responsibly over time. Payment History Tips Pay your bills on time. Delinquent payments and collections can have a major negative impact on your score. If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score. Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years. If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor. This won't improve your score immediately, but if you can begin to manage your credit and pay on time, your score will get better over time. Amounts Owed Tips Keep balances low on credit cards and other revolving credit. High outstanding debt can affect a score. Pay off debt rather than moving it around. The most effective way to improve your score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score. Don't close unused credit cards as a short-term strategy to raise your score. Don't open a number of new credit cards that you don't need, just to increase your available credit. This approach could backfire and actually lower score. Length of Credit History Tips If you have been managing credit for a short time, don't open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user. New Credit Tips Do your rate shopping for a given loan within a focused period of time. FICO® scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. Re-establish your credit history if you have had problems. Opening new accounts responsibly and paying them off on time will raise your score in the long term. Note that it's OK to request and check your own credit report. This won't affect your score, as long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers. Types of Credit Use Tips Apply for and open new credit accounts only as needed. Don't open accounts just to have a better credit mix - it probably won't raise your score. Have credit cards - but manage them responsibly. In general, having credit cards and installment loans (and paying timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly. Note that closing an account doesn't make it go away. A closed account will still show up on your credit report, and may be considered by the score. Credit Inquiries What is a credit inquiry? A credit inquiry is an item on a credit report that shows a business with a "permissible purpose" (as defined under the federal Fair Credit Reporting Act) has previously requested a copy of the report. Not all inquiries count toward your FICO score. When you check your credit report, you may notice that a number of credit inquiries have been made, sometimes from businesses that you don't know. But the only inquiries that count toward your FICO score are the ones that result from your applications for new credit. Inquiries that count toward your FICO score. There is only one type of credit inquiry that counts toward your FICO score. When you apply for a mortgage, auto loan or other credit, you authorize the lender to request a copy of your credit report. These types of inquiries, prompted by your own actions, appear on your credit report and are included in your FICO score. Inquiries that don't count toward your FICO score. Your own credit report requests, credit checks made by businesses to offer you goods or services, or inquiries made by businesses with whom you already have a credit account do not count toward your FICO score. Credit checks by prospective employers also do not count. These types of inquiries may appear on your credit report, but they are not included in your FICO score. Your FICO score is not affected when you check your credit. Checking your credit reports regularly to be sure they are accurate and error-free is a good idea. In fact, maintaining accurate credit reports is a part of good credit management, which can help to improve your FICO scores over time. You can order all three of your credit reports with FICO scores at www.myFICO.com. You can also order your credit reports from the credit bureaus. Either way, your FICO score is not affected by your own credit report checks which are voluntary. How inquiries are factored into FICO scores. There are five types of information used to calculate a FICO score at any given point in time. Each type of information counts as a percentage of a total FICO score: Payment history = 35% Amounts owed = 30% Length of credit history = 15% New credit = 10% Types of credit in use = 10% These percentages are based on the importance of the five categories for the general population. For particular groups, such as people with relatively short credit histories, the importance of the categories may differ. Inquiries are a subset of the "new credit" category shown above, which accounts for 10% of the total FICO score. Their importance depends on the overall information in your credit report. For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your score. What's important is the mix of information, which varies from person to person, and for any one person over time. Inquiries may or may not affect your FICO score. A FICO score takes into account only voluntary inquiries that result from your application for credit. The information about inquiries that can be factored into your FICO score includes: Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account. Number of recent credit inquiries. Time since recent account opening(s), by type of account. Time since credit inquiry(ies). A FICO score does not take into account any involuntary inquiries made by businesses with whom you did not apply for credit, inquiries from employers, or your own requests to see your credit report. For many people, one additional credit inquiry (voluntary and initiated by an application for credit) may not affect their FICO score at all. For others, one additional inquiry would take less than 5 points off their FICO score. Inquiries can have a greater impact, however, if you have few accounts or a short credit history. Large numbers of inquiries also mean greater risk: People with six inquiries or more on their credit reports are eight times more likely to declare bankruptcy than people with no inquiries on their reports. What happens when you apply for credit. When you apply for credit, you authorize the lender to ask for a copy of your credit report. This is how voluntary inquiries appear on your credit report. The inquiries section of your credit report contains a list of everyone who accessed your credit report within the last two years. The report you see lists both voluntary inquiries, spurred by your own requests for credit, and involuntary inquiries, such as when lenders order your credit report to offer you a pre-approved credit card. Will my FICO score drop if I apply for new credit? If it does, it probably won't drop much. If you apply for several credit cards within a short period of time, multiple inquiries will appear on your report. Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on the credit score. What to know about "rate shopping." Looking for a mortgage or an auto loan may cause multiple lenders to request your credit report, even though you're only looking for one loan. To compensate for this, the score counts multiple auto or mortgage inquiries in any 14-day period as just one inquiry. In addition, the score ignores all mortgage and auto inquiries made in the 30 days prior to scoring. So if you find a loan within 30 days, the inquiries won't affect your score while you're rate shopping. Improving your FICO score. If you need a loan, do your rate shopping within a focused period of time, such as 30 days. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. Generally, people with high FICO scores consistently: Pay bills on time. Keep balances low on credit cards and other revolving credit products. Apply for and open new credit accounts only as needed. Also, here are some good credit management practices that can help to raise your FICO score over time. Re-establish your credit history if you have had problems. Opening new accounts responsibly and paying them on time will raise your FICO score over the long term. Check your own credit reports regularly, and before applying for new credit, to be sure they are accurate and up-to-date. As long as you order your credit reports directly from the credit bureaus, or through an organization authorized to provide credit reports to consumers, such as myFICO®, your own inquiries will not affect your FICO score. WE ARE THERE WHEN YOU ARE READY! FOR MORE INFORMATION... CONTACT DEBBIE VIA OR CALL DEBBIE NOW AT 828-726-9180 RETURN TO HOME PAGE