credit scores posts

We here at WalletPop keep telling you how important your credit score is, but what's a hardworking American to do if there's a mistake on that all-important score -- one that could be costing them valuable points that could translate into a better rate on a mortgage, car loan or credit card? WalletPop interviewed several, very average Americans who found and confronted a credit report mistake. They shared their stories -- and their solutions -- so you won't find yourself in the same situation.

Shocking situation
When artist Joe Bagley checked his credit score in January, he said he was "shocked" by the results. Why? "One of the reports said we had currently used up more than 45% of our available credit," he explains, adding that he knew he only had about $2,000 in credit card debt, a balance he was actively paying down.

Panicked, Bagley's first thought was that someone had stolen one of his cards and run up a huge balance. A little digging into the credit report soon solved the mystery: Bagley's highest-limit card, one with a $15,000 credit limit, was listed on the report as having a limit of zero, seriously skewing his overall utilization ratio. He says he contacted all three credit bureaus online and asked that they fix the problem, which he estimates took about three weeks to resolve.

This isn't your father's banker. Your father's banker was probably human. Today, you can get online loans without ever stepping into a bank -- actually, without even leaving your home. But that facelessness can be either convenient or dangerous. You need to be cautious when shopping for online loans, so you find a legitimate online loan provider and not a scam artist trying to take rather than give you money.

Here are the top 10 tips for getting online loans.

Online Loans Tip #1: Make the most of online advantages. One of the biggest benefits of shopping for online loans is you can easily compare rates and offerings and get qualified and approved quicker than from traditional banks.

This isn't quite the falling of the Berlin Wall, but in the credit scoring world, it's close. Apparently, for the first time ever, FICO, the company that has its famed credit scoring model, has released details on how a financial goof-up actually affects your credit score.

First, before I go on, credit for making credit scores a little less mysterious goes to Liz Pulliam Weston, a prolific and well respected columnist with MSN Money. She asked FICO for details on how they determine how late fees, bankruptcies, foreclosures and so on affect one's credit score, and they decided to actually be upfront about it. Or at least more upfront than they used to be.

Every time you make a financial mistake, these are known as "damage points." And the higher credit score, the more points these mistakes will cost you, which is interesting. In other words, the slide descending into bad credit can be faster and more pronounced than someone already on their way down.

The New York Times reports on a topic that's long been a pet peeve of many financial-minded people: those pesky FreeCreditReport.com ads that are a classic bait and switch marketing technique designed to coax consumers into signing up for expensive monthly credit monitoring services.

The FTC is now running its own spoof ads warning consumers about the misleading marketing. According to the Times, "But while the government has taken issue with the ads, it has had little to say about credit monitoring services themselves, a rapidly expanding niche approaching $1 billion in sales for which millions of people have signed up, often unwittingly. The problem, say critics, is that most people really don't need it."

Ken and Daria Dolan, America's first family of personal finance, answer your questions every Friday.

Thanks to rising unemployment and an economy stuck in neutral at very best, more consumers than ever are struggling to pay their debts. Credit card delinquencies and charge-offs are both at record highs. Today, Ken and Daria help a WalletPop reader understand how debt charge-offs impact his credit and share solutions for managing his debt.

I heard that once your debt has been charged off, that your credit score never gets any better.So, is it a good to accept the offers I get to settle my debt by paying off 60-to 70% of it in exchange for charging off the rest?

--Hector

Looking for debt help? Visit Dolans.com to learn more about debt settlement and other debt management options.

E-mail addresses can tell people a lot about you.

Your username, or what's in front of the @ symbol can tell potential employers, dates and associates about your political affiliations, year of birth, what school you went to and even your affinity for elf culture.

Did you know that what comes after the @ sign can be more revealing than your cleverly chosen username?


A new trend report published by Credit Karma ranks e-mail domains by the average credit score of Credit Karma users. The data shows that BellSouth and Comcast users have the highest ratings, perhaps because they come with a paid Internet service.

Gmail comes in third, leading the pack of free e-mail services with an average credit score of 681, which is close to the average credit score for 45-54-year-olds and the average credit score for California, Oregon and Washington state.

In the morass of glum housing news, there is one bright spot: Tantalizing low mortgage rates are continuing to entice more homeowners to refinance. The number of applications to refinance has tripled in the past year, says the Mortgage Bankers Assn.

Refinance applications soared 18% in the week ending Oct. 2 compared with the previous week, according to the Mortgage Bankers Assn. Rates on 30-year fixed rate conforming home loans dropped to 4.89% -- their lowest level in four months. (They hit a record low of 4.78% in the spring.) Some refinance rates are even better for borrowers with stronger credit, say experts.

Ken and Daria Dolan, America's first family of personal finance, answer your questions every Friday.

Your credit score is more important than ever. But how can you make sure you have good credit when you don't use credit cards? Personal finance experts Ken and Daria Dolan help a WalletPop reader facing this dilemma.

Visit Dolans.com for more simple, proven ways to improve your credit score.

So you've heard of credit scores, but do you really understand how they're calculated? In this week's episode of Show & Tell with The 2 Mortgage Guys we'll break down the credit report guidelines and give you a few tips on how to keep your score from limiting your financial options!

Ryan Minick and Steve DeLon are The 2 Mortgage Guys. Subscribe to their newsletter or visit them at www.The2MortgageGuys.com.

What do teens know about money? It's green, they never have enough of it and for some it seems to magically appear from the bank of Mom and Dad. Perhaps a better question is what don't teens know about money, or for that matter finances in general?

Thanks to the fact that most teens rely on their uninformed peers to answer their pressing financial questions, there is plenty of misinformation passed around which makes it even harder for teens to get the straight facts about money and other personal finance topics like credit scores and banking.

To address this problem the Consumer Federation of America and FoolProofMe.com have gathered the Top 10 money myths held by teens.



Top 10 Money Myths Held by Teens:

1. I don't have to worry about credit at my age.
2. Bad credit can't keep me from getting a job.
3. All loan companies have the same rates.
4. All credit cards are alike.
5. The job of financial advertising is to tell the truth.
6. It's OK to bounce a few checks.
7. It's OK to make minimum payments on a credit card.
8. Paying late occasionally can't hurt my credit.
9. Fine print isn't important.
10. Young people don't have credit scores.

President Obama's Making Home Affordable mortgage modification plan is getting quite a bit of press lately, most of it focusing on how it can help borrowers who are having trouble with their payments.

But here's one downside to having your mortgage modified: Even if you haven't missed a payment or defaulted, lenders will report the modification to the credit bureaus and the result can be a sharply reduced FICO score. That can lead to higher interest rates on credit cards and reduced credit limits.

For most borrowers though, the benefits of the loan modification will save them enough money that the temporary FICO score beat down is a worthwhile trade-off. But the concern here is that no one -- not the government and not the banks -- is stepping up to make sure that consumers are aware of the credit score ramifications of a mortgage modification.

So you pop over to Google to find a flight to Albuquerque or an aquarium for your kid, and suddenly you're being hit with come-ons from luxury companies inducing you to forget the recession that's raging and drop some of your hard-earned bucks on their baubles.

What's going on here? The search giant has found yet another new and potentially lucrative way of segmenting customers for its advertisers. It's targeting users by their FICO scores.

A spokesperson from Google said in a statement , "[T]here are no plans for Google to use FICO related targeting for any of its products or offerings... Google is not targeting individuals based on their credit scores." However, here's what a Google exec had to say about the matter.

"Let's say we have an advertiser who wants to reach consumers with a high FICO score who applied for mortgages in the first quarter," Google senior industry marketing manager Masha Korsunsky told MediaPost in this article. "We can provide the advertiser with a list of Web sites on our Google content network that index against this segment."

Google and data analytics firm Compete just launched a pilot program using Compete's database of 2 million web-browsing Americans. (According to Google, only a "small portion" of these 2 million were involved in the FICO initiative.) A Google spokesperson asserted via email that the search giant doesn't have access to individuals' FICO scores. The spokesperson added that even Compete itself does not have this information, saying that the anonymous matching was done by what it termed a "sister company" of Compete's called Intellidyne. Walletpop attempted to find out from Compete the relationship between their firm and Intellidyne as well as how consumer FICO data was handled. A representative from Compete sent this reply via email: "Google has asked us not to discuss the details of this matching process on the Credit Score research."

Ken and Daria Dolan, America's first family of personal finance, answer your questions every Friday.

Click here to ask Ken and Daria your question.

Your credit score has never been more important than it is today. That's why it is critical you understand some big changes in the way your credit score is calculated. Learn what you'll get hit hard for and what gets ignored under the new rules.

Dear Dolans:

I've heard they are changing how my FICO score is calculated. What do I need to know?

--John

To learn more about the new FICO rules, as well as tips to boost your credit score, visit Dolans.com.

Americans' credit scores fall as they struggle to pay bills.

That's the headline in a USA Today article that ran today, and while it's an interesting enough story, it hardly feels like news. Of course, credit scores are going to fall when a sizable portion of the population is struggling to pay bills.

The relevant data in the USA Today article is that from the third quarter of 2008 to the first quarter of 2009, the average TransUnion TransRisk credit score (not to be confused with the more prevalent FICO credit score) dropped 6 points to 651. Some states were hammered more so, though. California's average dropped 10 points, and Arizona's, 11.

Ken and Daria Dolan, America's First Family of Personal Finance, answer your money questions every Friday.

Click here to ask Ken and Daria your question.

We feel strongly about helping people with their personal finance matters the right way. Some of the "tips" we read elsewhere make our hair curl because they are just plain wrong! This is especially the case with credit cards.

One of the most common questions we are asked is about paying off credit card balances. We're sure you've heard the rumors that it's best for your credit score to carry a balance on your card and only pay the minimums. But you've probably also heard that it's best for your credit score to pay it all off every month. So what's true and what's false here? Watch our video below for the answer.

Dear Ken and Daria,

Which is better for my credit score: paying off my balance in full or paying the minimum a few times?

-Thomas



How is your credit these days? Ken and Daria share seven simple steps to improving your credit score, only at Dolans.com.