This is all possible due to credit scores.

Lending and banking institutions, landlords, and even potential or current employers apply credit scores to make credit, tenancy, and even employment or advancement decisions every day.

The lending industry started using credit scores in the ‘80s as computer usage grew in the work place.  Previous to that, credit decisions were arbitrarily made using individual judgment. Relying on individual judgment led to unpredictable and unreliable results, and was both slow and tedious.

There was growing concern in Congress in the ‘70s regarding discrimination in housing.  This concern led to legislation to reduce the human factor when evaluating credit applications.  Starting with FCRA in ‘71 and then FDCPA in ‘77, legislation forced the credit bureaus (also known as CRAs for Credit Reporting Agencies) to modify and standardize rating procedures.

The point system was the first attempt at a better rating system.  It employed a weighted list of credit report items.  This was a good first step towards removing much of the bias and the ambiguity associated with credit analysis.  This system was soon replaced by a statistical model which included thousands of report items and over hundreds of variables all associated with consumer payment histories.

Out of this came FICO (developed by the Fair Isaac Company); one of the first models developed, and which soon became the recognized predictor of consumer credit behavior.  Many of the lending institutions quickly adopted FICO as the de facto standard.  It was the answer to Congressional pressure to remove discrimination in the rating system.

Statistical modeling also presented major advantages as well: much faster processing, standardization, highly predictive; and totally objective.

How does it work?

The foundation for credit scoring is a technique called Risk Factors.  Risk Factors work by grouping individuals into risk categories, and then calculating a rating based on relative standing within the Risk Factor group.  For example, if a person is placed in the high risk group, then that person is rated relative to all the other members in that high risk group.

A similar approach is applied to the credit report, where entries to the report are also grouped into Score Factors.  Score Factors provide the basis for a final credit score.  Some of the items found in Score Factors are: the number of loans outstanding, the number of credit cards; your payment history (i.e., bankruptcies, late payments, foreclosures, etc.), overall debt to income ratio, your employment status, etc..  Note, if you are denied credit, you can and should request a copy of the Risk Factors that were used in the decision.

Credit scores range from a low of 300 to a max of 850, where the higher the credit score, the better.  There are three major CRAs (Experian, Equifax, and TransUnion), and each provide a credit score: Their scored differ for two reasons: first, each uses a modified version of FICO; and second, their record of your credit history will differ.  It is common for lending institutions to request all three credit scores when evaluating a loan application.

If you have a score higher than 720-750, this is considered an excellent score (anything above consider a cushion for possilbe negative entries).  Below is a guideline that should help in understanding credit report scoring:

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Under the Fair and Accurate Credit Transaction Act, the three national credit bureaus must provide a free, annual credit report to every consumer upon request. A national roll-out of the free credit reports began December 1, 2004. Depending on where you live, you may not be eligible for the free credit report until September 1, 2005.

If you’re looking to make a major purchase, or if you suspect that someone may be using your personal information to apply for credit in your name, chances are, you are going to need a credit report. Each credit bureau agency may carry different information on your credit report, so it is often recommended that you check all three credit reports. AnnualCreditReport.com allows you to do just that, instantly and online (so long as you correctly answer questions about your credit history for authentication purposes).

Credit bureaus are not required to provide you with a free credit score, which is a major determining factor when you’re buying or refinancing a home. Each of the major credit bureaus have provided the option of purchasing your credit score online during the free credit report process so that you can quickly review your entire credit information. Each credit bureau may reflect a different score for you, so it is a good idea to check all three credit scores. They also offer an easy vehicle to initiate credit disputes so that you can correct incorrect credit information while you’re viewing the report. Accurate credit information is particularly important when you’re trying to obtain a competitive interest rate and inaccurate credit information is lowering your credit score.

So do you still need to purchase a credit report? The answer is yes, if you want to continue to monitor your credit information throughout the year. Checking your credit report several times a year ensures its accuracy and helps deter against identity fraud.

Balanced Credit (http://www.balancedcredit.com) is a great resource to access all of your online credit information in case a free, annual credit report is not yet available in your area. It provides you with links to get your online credit report and/or online credit score from the credit bureau you choose as well as contact information for each of the major credit bureaus.

Contact Information:

Balanced Credit

http://www.balancedcredit.com

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Credit files can be obtained on the internet as well as through a mortgage company or any other business which specializes in financing.

Paula de la Torre of the “Best Credit Reporting Services” website — http://www.BestCreditReportServices.com/ — pointed out;

“… Companies which offer their services through financing are an easy way to get a credit report for free. Free reports can be obtained online as well and some sites offer 1 free annual report a year. Handling credit can be difficult but by obtaining a report of your finances your chances of succeeding in maintaining accurate credit is possible…”

To handle credit is a lifelong process. Your credit is quite possibly the most important thing to maintain, monitor, and try and remain blemish free. Credit is easily given away these days, however some people have a hard time maintaining and balancing it. Credit problems force people into bankruptcy, debt consolidation and other financial issues.

By getting 3 reports from a credit bureau you can easily maintain your credit file. Credit reports are essential in scoring individuals credit by using a numerical score system which allows companies to access credit worthiness.

“… A credit score will help a person maintain their credit or at least monitor it. People have to find their own way of balancing financial matters and a credit report only reflects behaviors. Having a good credit score means more opportunities are available…” P. de la Torre added.

Jobs are difficult to get with a negative credit score and most employers will check a credit file before hiring any individual. By maintaining credit and using a credit report anyone can monitor their credit and financial matters. 3 online credit reports can help if you are in doubt of anything on your credit file.

Further information about how to get a detailed credit report including scores and as often as you want by visiting; http://www.BestCreditReportServices.com

Answer by Laci B
1-NO, if you get a loan from them for school it will have to be for school. they won’t give you the money they will contact you school and notify them. 2-YES, credit cards build up credit if your good about them your fine. It will depend on your credit within how much money they will give you. 3-YES, anytime you have a co-signer it helps, just so THEY now they will get there money back 4-NO, never tried them. AGAIN, it goes along with your credit, those people that said that may have very good credit. Don’t go through the internet…SCAMS, you may want to consider going through your local bank 5-YES, personal loan is the correct definition Hope this helps. Good luck PLEASE PLEASE don’t go through the internet, if it sounds too good to be true it usually is. I’ve got scammed over almost 500 dollars before. This is real money your talking about so go in person!!!!! Internet will feed you bull..people fraud people all the time over the internet.

This is my question about the need for a credit report to get a job. When did it become a law you must have this before you can get a job. My thought is that this is just one way to lower your pay.

Answer by Morpheus
use ur credit card pay on time, take a bank loan and pay it back in 6 moths

What is really a collection agency?
 Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed. 

As debt is transferred in between unique agencies, there may well be quite a few records on the credit report for the exact same debt; however, only one record at a time will need to be marked as open on the credit report. Collection items use a special format on the credit report.
 
Collection agency dispute section provides templates to request:

If you don’t know your rights, and the best way to cope with collection agencies, you might locate your self paying far beyond what you should-and in some cases, paying for the very same debt to several collection agencies!

There are several issues you require to keep in mind when dealing with a collections agency. You will need to know your rights, as you’ve got some protection below the Fair Debt Collection Practices Act.

Many agencies willfully violate this act, although performing so is against the law. You also have to have to know the best technique to handle debt collector’s calls and claims, and the way to guard your self and your credit rating from unscrupulous collectors.

First, familiarize your self with the FDCPA.

1.  Debt Validation Request
Once you’ve got received a collection notice, you’ve got 30 days to request debt validation from the collector. The Fair Debt Collection Practices Act mandates that the collection Agency deliver documentation that the debt is valid. 

· Identify themselves as a debt collector

· Provide verification of the debt, which includes the name and address of the original creditor

What does Debt Validation Mean? 
Debt Validation, or “debt verification”, refers to a consumer’s appropriate to challenge a debt and/or receive written verification of a debt from a debt collector.

· Stop contacting the client upon request, or only get in touch with in a specified manner

· Abusing or harassing communication

· Pretend to be a lawyer or officer of the law

· Reveal facts to third parties

· Threaten the consumer with activities which can be illegal-things like telling a debtor they are going to go to jail for not paying the bill.

What if the debt collector does not respond?
There is no deadline for the debt collector to deliver a response to the request for validation. However, a debt collector should cease all attempts to collect the debt till they’ve sent a sufficient response.

So, now that you simply know your rights, what can you do to defend yourself while dealing with collections agencies?

First, any time a collection agency contacts you, you ought to write to them requesting full verification of the debt. By law, they must furnish you with proof which you owe the debt, or cease collection activities. This is particularly significant when dealing with “junk debt” buyers.

These collectors are the “bottom feeders” of the collections world. The get old, uncollectible debt, and attempt to harass shoppers into paying, simply to create them go away. Often, a request for verification is all you need to create these types of collectors disappear.

You can discover additional essays on my site on Palisades Collection as well as Gc Services Collection Agency.

Credit Knowledge Is vital

Humans are given to forgetfulness. How often we have overlooked some billings that we have bought a monthly membership for? Having many things in mind, any person may neglect some of his financial accountabilities such as billings. In this instance, some companies are really stringent in dealing with this matter and may report items particularly those that have accumulated large amounts and are gravely past due. This is how reported recordings take its place. And sadly, the consumer may not even knowledgeable with it. Should you keep an eye on your credit reports consistently, you could identify and fix this at once.

Keep your Dream Job

Yet another thing is that some businesses will consider your credit rating with their application. They can disqualify you for the position you’re applying for if and when they realize that you get a negative credit score. No doubt this could produce a significant issue to the job seeker’s part. If you know your credit rating is bad enough for that business that seeks for staff with good score, why take the time to apply for the job and become ashamed? The point here is that we need to determine first our score before applying for a work.

Save Money and time

What is more, consistent following of credit reports can save you time and cash. Everyone believes that there’s a mounting instances of identity fraud. Even if it’s possible to catch, stop and prosecute identity thieves doing this, the entire process of solving this is certainly lengthy and pricey. The victim may need to acquire large sums of money to pursue the process. Having your credit report around on regular basis can certainly help capture mystical isolated reports before they materialize right into a long list. Plus, on occasion leading credit reporting providers make mistakes within their report. These errors could very well be remedied straight away if you are in consistent tracking of your report.

As a result, having good credit is definitely significant per consumer specially in these days of financial crisis. When you’ve got a good credit, you could be commended for that by means of approved credit card or loan requests. So don’t take this for granted and always remember that good credit is something you can also enjoy for your life. Keep track of your credit report consistently and you will be conscious of the benefits out of it. Feel free to use one of the best credit reporting services offering a free trial and also the most economical charge on-line.

CLICK here to Get Your Free Score Today!