Credit Bureaus….who are they?

Now is a good time to list the 3 major credit reporting bureaus.

There are others, but, these 3 –  are used by over 93% of all credit decisions -maybe only one or a combo of all three.  These companies are who calculate your all important Credit Score  –  Here you go:

Remember, there are lots of places to get your “Free Credit Reports”. The information on those random sites is almost always pulled from these 3 for you.

    Experian                                                  Equifax                                 TransUnion

P.O. Box 2104                                     P.O. Box 740241                      P.O. Box 2000

Allen, Tx 75132                                   Atlanta GA  30374                    Chester, PA 29011

www.experian/          \FCRA

1.888.EXPERIAN.                                 1.800.685.1111                        1.800.680.7289


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Balance Transfer…ahhh, music to my ears!

Balance Transfer

Definition:   The BEST tool you can use to reduce your debt!!!!


Credit Card companies love them ( and you too!)

All that a balance transfer does is move your debt around, right?  Right, but the huge advantage to moving one credit card balance to another card may be that the new interest rate can be drastically lower than what you are paying to the current company.  Now, there are some caveats…as always, you have the responsibility of asking some questions.  Such as:

  1. What will the interest rate on the transferred balance be?
  2. How long will the new interest rate last?
  3. What are the fees to transfer the balance (s)?
  4. What will the interest rate be if I make a late payment?  (DON’T DO IT!!!)
  5. What will the interest rate be after the introductory period?  (usually 6 – 18 months)
  6. What credit score is required for the lower (like 0%) interest rate?
  7. If my score is not high enough for 0% interest, are there other low interest rate options?  ( 5% is probably way lower than you are currently paying)

     With those questions answered, you will be able to make a smart decision about transferring you higher interest rate balances.   Once the transfer is made, make it you MISSION to pay as much as possible every month.  The point of this is that more – and sometimes all – of your monthly payment is now going toward balance reduction.   When you start to see you balances going down more quickly, you’ll stay motivated to keep up the good work.

P.S.  Set yourself an appointment to review your account at least 30 days BEFORE your lower interest rate is scheduled to go up.  Then, just repeat this process again with another CC company.  Remember, they will love you!


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If it’s so important, exactly, what all is on that Credit Report?

What is included in your Credit Report?

More than you thing….and Less than you think!

All things Credit related can be on your Credit Report.  Companies to which you have owed money  – currently or in the past can be listed.    Credit Reports can have information dating back to your 18th birthday…a long time for some of us!  But, weird as that historical information inclusion sounds, it is a good thing.  Older accounts that you have paid off simply add strength to your credit profile.  Ideally, the historical informatoin shows that you know how to obtain, pay and complete credit transactions. 

A creditor can report the original, high and current balances.  Dates the accounts were  opened, date last paid as well as monthly payment amount are also listed.  Also – and this is the big one – creditors can list when / if you have ever paid the payment late.  In other words, “Not As Agreed”.  You do not want to have that information listed because you will appear to be a poor manager of your debts.  Ouch…

You may be surprised to learn that no income information is included in your credit report.  However, your employer may be listed as well as your birth date, maiden names and addresses. 

It is also good to know that not all creditors report to all three bureaus.  Some may not report at all or may send information to only one or two.  It is completely up to the creditor to send in data or not.  Remember the Credit Bureaus are just reporters….garbage in – garbage out….However, that “garbage” is what is used to determine your all importatn Credit Score.   Do you see a possibility of erroneous information resulting in inaccurate Credit Scores?   If you do….YOU ARE CORRECT!  We’ll cover that in the coming weeks.

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Credit Score…..The little number that rules your life!!!!

Credit Score….the number that rules your life… WHAT????

Credit Score Definition:  The numeric measurement of ones credit activity as compared to a perfect model.

  Credit Score…..Driver of most credit decisions!


     Ok, NOW we’re getting to the heart of matter!  In previous weeks we have talked about what Credit is and how it impacts our lives in almost every way.  So, just what does a potential lender look at on your credit report before making a decision on your interest rate and if credit will even be issued?  Well, your CREDIT SCORE is almost always the first thing a potential lender reviews.  It is their short cut to determining your financial fate. Lenders have parameters within which you must fit for their loan programs.  There are many parameters to be reviewed , however, if your Credit Score does not meet that part of the requirements, they may very well go no further and just decline your application.  Or, and sometimes more devastating, is that they will give you the loan or give you the credit card, but, charge you a very high interest rate – like 20% or more!  If that happens, you may have a short term victory by getting the card or loan, BUT, a huge part of your monthly payments will be going towards interest (Lender’s profit) rather than toward reducing your debt.  BAD, BAD,  BAD!   Here is a shocking tidbit…if you owe $5000 on a credit card with 17% interest and pay only minimum payments, it will take over 13 years to pay that balance off….if you never used it again!  Now, if you have the same balance with an 8% rate, it will still take you about 7 years to pay it off…still a long time, but…..WAY better than at the higher interest rate.  Which would you prefer????

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Ok, so just how does all that info get onto your Credit Report?

Sounds like your credit report is full of your personal financial activity, Right?

How is that info getting onto your Credit Report? 

Here’s a roadmap…

You use your credit card   >>>  

     The lender (credit card company) records the activity   >>>  

          At regular intervals the lender electronically sends all of that account

                data to the three major credit bureaus (Who knew?… stay tuned for more info

                on those companies)   >>>  

                      The credit bureaus REPORT the data provided to them ( they do NOT

                      interpret the info, just the facts, ma’m)   >>>  

                                  The data is then plugged into a “magic” Credit Score equation

                                   and  BOOM!  your Credit Score is created!

                           Your life is now dependent on that little number….yikes….

               Probably should know more about that “Little (all powerful) Number, Agree?

We will discuss Credit Scores in the coming weeks….and, YES, you CAN manage them…YES YOU CAN !!!!


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How is the Interest you pay determined?

Interest….How is THAT determined, you ask?


     The interest rate you will pay is determined primarily by market conditions over which you have no control.   However, within the market driven rates there are levels of interest that vary greatly. What you actually pay within those variances is determined by how your financial picture looks to the lender.

Some of the things the lender looks at may be income, savings and collateral. However, the most heavily weighted factor that determines the interest rate you will be charged is your credit profile. Have you shown a history of paying your previous debts on time? Do you have a well-established credit profile? What is your outstanding debt load? All of these items, and more, are summed up in your all-important credit score.

The credit score is a mathematical calculation of your likelihood of debt repayment based on your past performance as compared to a perfect model. A high score will get you the best rate available but a low score may cause you to be charged a higher interest rate or not be granted credit at all. 

Another way to say it is that the harder the lender thinks he will have to work to recover their money, the higher the interest rate you will be charged.  If the lender sees that you have not paid previous loans in a timely manner, she will probably think that your behavior will be the same for the new loan. 

So, you goal must be to make the lender’s job easy and they will charge you less. 


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