Today is April 4, leaving just 11 days until tax day 2011. And while your financial mind may be on other things at this point, tax day can serve as another reminder that if you haven’t checked your credit report lately, you need to do it. If you haven’t checked your credit report yet for the year 2011, you have another reminder, another chance to do it now. You can do it later but you will be better off if you do it now.

You need to do it. At least one time per year, more often if you have bad credit or if you are consciously trying to improve your credit you need to check out your credit report.

You are entitled to one free credit report each year from each of the three main credit reporting agencies. Do not go to the sites that are advertised on the TV unless of course they are for the right one!

The right place and only place to actually get a completely free, no strings attached, nothing further to purchase and nobody to sell you anything additional is annualcreditreport.com

You need to check your report. The fact is that it has been estimated that over 75% of all credit reports contain errors. You need to check your report and make sure that all of the information belongs to you personally rather than the deadbeat two states over who has a similar name. You also need to make sure all the information is up-to-date. Many banks have changed names and hands in the past little while, make sure that what is being reported is accurate.

And check your report to see what you can improve on. Credit repair is very possible and often necessary in today’s cruel world . If you need to do some credit repair, get your report, get a plan and take some action.

The credit you repair today may very well be the credit you need tomorrow.

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The beginning of a new year is a good time to evaluate your credit score, your credit report and your finances in general.

You can receive a free copy of your credit report to check for errors and mistakes and to see how you’re doing. Go to annualcreditreport.com

Now you can also receive a free copy of your credit score. A higher credit score will allow you to be able to get the best terms if you do need credit or financing.

Credit scores are a numerical representation of your past credit history and they range from 300 to 850. Those with the highest scores of 850 are few, in fact only 1% of the population has ever reached that pinnacle of perfection. However, all of us can improve upon our credit scores.

Your credit score is comprised of these factors as an overall percentage of your score.

1. Payment history – 35%
2. Credit Utilization-30%
3. Length of credit history-15%
4. New credit-10%
5. Types of credit used-10%

It is interesting to note that the ones with the highest scores use just 10% of their available credit.

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Negative credit must be removed from your credit report within a specified time period due to provisions within the Fair Credit Reporting Act or the FCRA that was enacted into law back in 1970. This law came about in order to protect consumers from unfair credit reporting.

The majority of credit reports contain some types of errors. If you happen to find some inaccuracies or mistakes showing on your report you can send in a dispute and attempt to get them removed. The credit bureaus must verify the accuracy of their information within a 30-day period following receipt of your dispute or they must delete the disputed information.

But if the information is completely truthful and accurate it should remain on your report for a specified period of time that has been established by the FCRA. When the statute of limitations runs out the negative item must be removed.

All of the time limits for reporting begin at the time of the first date of delinquency. Therefore any payments, partial payments or other types of activity on the account will not affect the reporting. There are however, two items that can stay on the report forever if they never get paid and that is an unpaid tax lien and unpaid Federal student loans. If these items are paid off though, they will be removed after the typical time limit passes.

The majority of negative credit items are scheduled to be deleted from your credit report in 7 years from the date of the first delinquency regardless of whether they are ever paid off or not. In the case of multiple late payments on one account, each late payment will be treated separately and will drop off 7 years from the day it was late. A chapter 13 bankruptcy should also be deleted after 7 years along with tax liens and student loans that have been paid in full.

In the case of a charge-off and most collection accounts the time period is 7 years plus 180 days from the date of first delinquency. That is because it typically takes at least 180 days for the original lender to charge-off the delinquent debt. Even though collection accounts are often passed along to different collectors, these exchanges cannot affect the reporting on your credit report. All of these types of items must drop off the credit report in 7 years plus 180 days from the date of the first delinquency.

There are a couple of variances from the 7-year rule. A bankruptcy that is a chapter 7 must remain on the report for 10 years. Of course, unpaid tax liens and unpaid Federal student loans can stay on there forever. As for inquiries, a soft inquiry, which is what happens when you look at your own report, does not affect the report but all hard inquiries from lenders stay on the report for 2 years.

It takes time but even if you do nothing eventually all of your bad credit will be removed from your credit report. However, while you are waiting you can take some steps to make improvements and raise your credit score. The most important thing however, is to keep your credit good so that when the bad credit drops off you can again have excellent credit.

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All of the three major credit bureaus issue their own credit report. If you want a summary of all of the reports combined you can get a 3 in 1 report. The 3 in 1 report comprises the financial history of an individual or a group in order to “report their credit-worthiness”. It is an estimate of whether or not they have the reliability to repay a new debt.

A 3 in 1 report provides information from all three of the major credit-reporting agencies. Many financial organizations use the 3 in 1 report to assess an individual’s credit reputation to see if they will meet the credit guidelines set by the financial institution to extend credit. The report is also used to set the terms of the loan.

The United States has three major credit reporting agencies and they are TransUnion, Experian and Equifax. In the United Kingdom the big three are Experian, Equifax and Call Credit. If you are a consumer from the United Kingdom you can have access to your Call Credit credit reports right on the Internet.

When reviewing a 3 in 1 credit report it is imperative that one comprehends what the credit score entails. A credit score is a mathematical index that represents an estimate of an individual’s credit worthiness. Many lenders will use the 3 in 1 report rather than the individual bureau reports in order to determine whether or not to loan to a person and what that person’s credit limit should be and even the interest rate that they will charge.

Credit scores in the United States are typically calculated by using a mathematical formula developed by the Fair Isaac Corporation. This is known as a FICO score. All three of the major credit-reporting bureaus in the United States use variations of this same scoring formula but occasionally you may hear it called by another name like the Beacon score or the Emperica score.

The credit scores or the FICO scores on any credit report including the 3 in 1 reports were designed to measure the apparent risk of default on a loan by considering a number of variables. The main variables that are considered are the current and ongoing debt, punctuality of payments in the past and the ratio of ongoing debt related to available credit, the length of the person’s credit history, the types of credit used and all of the details of any credit that has been applied for in the recent past.

Many people believe that an individual’s current income and their employment history can affect their FICO scores, however, those two variables are irrelevant when it comes to determining credit scores. FICO scores range between 300 to 850. Any credit score that is higher than 720 on a combined 3 in 1 report is considered to be a good risk while any score that is below 600 is considered a bad risk.

When you improve or repair the credit on all three of the major bureaus reports you will automatically improve your 3 in 1 report. You can receive a copy of the 3 in 1 report but most often you will be required to pay a small fee.

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Back in 1970 the Fair Credit Reporting Act or the FCRA was put into law in order to protect consumers from unfair and fraudulent credit reporting. Among the provisions of the law were some distinct limitations on how long negative credit can be reported.

If you have mistakes and inaccuracies showing on your report, you have the right to dispute the information and attempt to get it removed. The credit bureaus will have 30 days from the receipt of your dispute in order to verify the accuracy of their information or completely delete it from your report.

Unfortunately, the truth is that if you have accurate and truthful negative credit it should stay on your report. However, it cannot stay forever and must be deleted when the statute of limitations runs out. The FCRA has defined the time limit for reporting for all types of credit problems.

Many people may mistakenly believe that all reporting is from the last date of activity on the account. But this is not true. The time limit begins as soon as the date of the very first delinquency and ends after the time limit has passed. There are two exceptions to this rule though and that is unpaid tax liens and unpaid Federal student loans. These items can remain on the report forever unless they are paid off and then they will drop off within the time limit.

Most items will automatically drop off your report 7 years from the date of the first delinquency regardless of whether they are ever paid off or not. If there are many late payments on one account, each late payment mark will be treated individually and will drop off according to the date of the late payment. If you have tax liens or student loans that you have paid in full, these will drop off in the 7-year time period as well as a chapter 13 bankruptcy.

Charge off’s and collections are treated a little bit differently. Both of these items will drop off in the 7 years but with the addition of 180 days since it usually takes that much time after the first delinquency for the item to actually be charged off. Most collection accounts have actually been charged off from the original lender so of course, they are treated the same and even though collection accounts are often passed around to different collection agencies, the time limit for reporting never changes, they must drop off at 7 years and 180 days from the date of first delinquency.

A time limit for a few items varies from the 7-year rule. A chapter 7 bankruptcy must stay on the report for 10 years. Tax liens and Federal student loans that are still delinquent will stay on the report indefinitely. If you pay them off in full the typical 7-year rule applies. Also any hard inquiries into your report remain there for a period of 2 years.

While time will eventually repair all of your credit problems there are some steps you can take in the mean time to repair your report and improve your credit score. And always, once you make improvements and repairs you must be steadfast in keeping your report clean and as time passes all of your bad credit will be in the past.

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Most folks realize how crucial it is to have a clean credit report and a high credit score when they try to get a loan for a house or an automobile. Lenders take the credit information very seriously and they can charge a higher interest rate or even deny credit altogether based on the information from the credit report and credit score.

But there are also a few things that most people are not even aware of concerning credit scores and credit reports. Negative credit can have an effect on many things that you may not even be aware of.

If you are a credit cardholder you need to make sure that you keep a good credit score and a clean credit report. Credit card companies are notorious for finding any reason that they can to raise your interest rates. If you are a cardholder they can monitor your report and if you show any negative credit they can raise your rates, even if you have never been late on a payment to them! The teaser introductory rate could double or even triple if your credit report is bad.

Any blemish that shows on your report is an adequate reason for a credit card company to raise your rates. If the information is incorrect or erroneous it is irrelevant to them and they will still unfairly raise your rates. For this reason it is wise to take advantage of credit repair strategies to delete erroneous and inaccurate credit.

Your credit score and your credit report can also affect a job search. A potential employer can do a credit inquiry as part of a background check with your permission. It is legal for them not to hire you based on your credit. They must have special permission to access your credit history however.

If you are one of a few equally qualified prospects it is possible that your credit rating could become a deciding factor. In these times of economic upheaval it is crucial to make sure that you maintain every advantage you may have in the job market.

The third unexpected benefit for repairing your credit and making it look as good as possible is that insurance companies can turn you down for coverage if you have bad credit. According to insurance industry research, they have determined that people with bad credit submit 40% of all claims. For that reason if you have bad credit they may deem you to be high risk and they may deny you coverage. Statistics show that as many as 90% of all automobile insurance companies use credit reports for an underwriting tool.

While none of these things seem reasonable or fair the fact is that good credit is more important than most of us realize. If you have good credit do whatever is necessary to maintain it and if you don’t you can take steps to improve or repair your credit.

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With or without permission?

Did you know that a collection company who is trying to collect a debt from you can access your credit report without your permission?
They do it to try to get accurate information about you, like your current address.

Potential employers can also access your credit report, in most states anyway. However, you need to grant them permission.

And insurance companies. Because of course, it stands to reason that if you lost your job and got bad credit that you are a high insurance risk, more likely to file a claim, right? Wrong!! Wrong on so many levels. However, there are some states that are trying to eliminate this practice.

Utility providers. Yes, they need to know just how much of a deposit they can force you to pay. Bad credit, higher deposit.

Landlords. Of course, you have to give them permission also.

And others. The credit bureaus are in the profit business so who knows who can and will access your credit report in the future.

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The Credit Repair Organizations Act prohibits a credit repair organization to charge a consumer upfront before any work has been done.

This does not imply that success has to be reached but rather that some effort must be put forth prior to the consumer being charged.

If a credit repair organization asks for money upfront you know that it is not a credible, reliable or professional service and you should keep looking.

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TransUnion, Equifax and Experian are the big three credit rating agencies in the United States.

Each have their own credit report, their own credit scores and their own records.

They all collect the information on you and your history.

Their profits come from sharing that information with banks, mortgage lenders, potential landlords and even sometimes employers and insurance companies.

You can get a free credit report one time each year from each company and it is a good idea to make sure that you get all three. Check out annualcreditreport.com for more info.

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Probably not if you look at it from a personal perspective. Good credit offers you peace of mind, security and more but….

Your credit can be too good to get a credit card these days.

Card issuers have counted on profits for years from penalty fees and high interest rates paid by the consumers who carry a balance. But the recent recession and the CARD legislation has forced a decline in profits from this source. The industry has had to write off billions of dollars of bad debt and the new Federal laws have seriously curtailed how much credit card companies can charge risky customers and how they can randomly increase interest rates.

If you are a customer who owns a credit card but pays off the balance every single month to the credit card companies you are essentially a “deadbeat”, not because you ever fail to make your payments but rather because the credit card companies are not making any money on you. You are worthless to them. No need to give you a card.

And people with stellar credit have been denied credit cards for that very reason.
A recent lawsuit brought by outdoor retailer Gander Mountain, from Minnesota, claims that the credit card partner they affiliated with, World Financial Network, was turning down shoppers who had nearly perfect credit scores of 800 and above. The issuer claimed that it could not make money from those clients and those clients comprised as many as a quarter of the new applicants.

Sounds like with credit these days, you may be damned if you do and damned if you don’t too.

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