Saturday, February 23

Looking for some free financial calculators?

I found a post over at the The Digerati Life this morning. You might be interested in some of the calculators mentioned there. I'll bet the Life Expectancy calculator is getting a lot of use!

Have a great weekend!

Here's the link to The Digerati Life and the Free Calculators!

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Friday, February 22

How to correct an error on your credit report- Free e-book

As mentioned in yesterdays post, sometimes there are errors on your credit report. How do you correct them and have them removed?

One way would be to work with a credit repair company. However, you can save money by doing it yourself.

Step One
You'll need to have a copy of your credit report (Click here to learn how to get a free credit report). With this, you'll be able to reference the exact information and how it is being reported should you need to provide it for documentation. Get any other proof of the error that you have (paid receipts, etc.) and make copies of them. DO NOT SEND ORIGINALS because if they become lost....

Step Two
You need to tell the consumer reporting agency (CRA), in writing, what you believe the error is and how it should be corrected. Your letter needs to include your complete name and address and clearly identify the items on your credit record that you are disputing. You need to state the reasons why you believe the information is incorrect and ask that the information be removed from your credit file. Mail COPIES (no originals) of any documentation that you might have. If you are mailing a copy of your credit file, mail only the page that has the trade-line that you're disputing, and highlight or circle the item that you're disputing. Here is a sample dispute letter from the FTC that you can use:

Your Name
Your Address, City, State, Zip Code
Complaint Department

Name of Company
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. I have circled the items I dispute on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be removed (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Your name

Enclosures: (List what you are enclosing.)

Step Three
Make copies of the letter and all of the documents that you're including. Mail the letter Certified and request a Return Receipt to the CRA. This will give you formal record of both mailing the letter and the CRA's receipt of the letter. Once the CRA has the letter, by law they must act on it unless they feel that it is lacking basis or otherwise does not have merit, completing an investigation usually withing 30 days.

Here is the address and contact information for the credit bureaus:

P.O. Box 740256
Atlanta, GA 30374
Web site:

PO Box 2002
Allen, TX 75013
(888) 397-3742
Web site:

TransUnion LLC
P.O. Box 2000
Chester, PA 19022
(800) 888-4213
Web site:

Mail copies of the information that you sent to the CRA to the creditor or other information provider that you dispute the item. Read this post for more information about disputing a billing error.

The CRA will contact the organization that provided the information that you are disputing, forwarding any relevant documents that you might have provided. If the information provider determines that there is an error, they must notify all three of the repositories (Equifax, Trans Union, Experian) of the error and have it corrected. They must report their actions back to the CRA who in turn will notify you in writing of the outcome. You will be provided another free copy of your credit report if any changes are made to it as a result of the investigation.

Step Four
Ask the CRA to send notices of the corrected information to anyone who has received a copy of your credit report in the last six months, just to set things straight with those that might have made a decision about you based upon the incorrect information contained in your credit report. For example, the loan that you received might be priced higher because of the error (read here for more information about how errors can effect your credit score). If the correction has a material effect on your credit score, then you should ask the creditor to reconsider your situation.

Step Five
If the investigation does not result in the item being removed or corrected, then you can ask that a statement about the account be included on your credit file and on future reports. This gives you an opportunity to have your statement appear on the credit report along with the trade-line information that you are disagreeing with.

If the information provider fails to respond to your dispute letter, the CRA will remove the information from your file. This may mean that if you bombard the CRA and information provide with dispute letters, the information provider may give up and not respond or change the information just to make you go away.

Otherwise, if the information is correct, and the information provider is unwilling to change it, the only other way for it to be removed is through the passing of time. Most negative information will be reported for 7 years, bankruptcy information is reported for 10 years. Other information like judgments can be reported for 7 years or until the statute of limitations runs out.

Get this free eBook from the FTC on Building A Better Credit Report

Related Posts
Disputing Credit Card Charges
Get Acquainted With Your Credit Score

You can read this and many other informative personal financial posts at the Broke Grad Student who is hosting the 141st Carnival of Personal Finance!

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Thursday, February 21

Get Acquainted with your Credit Score

Get acquainted with your credit score

I was looking at some of my previous posts tagged credit score, and this one caught my attention. If you're not sure what a credit score is, then you've come to the right place! In the next few paragraphs, I'll try to summarize for you what a credit score is, how it is used, and, how it is developed. Click here to see a video on the topic.

What a Credit Score is and how it is used

Your credit score is your financial lifeblood. Whether your applying for credit, a job, or insurance, chances are that somebody is looking at your credit score. A credit score is a number assigned to your credit history that helps lenders, employers, and, insurers determine the level of risk that your credit history represents. The lower your score, the higher the risk. The higher the score, the lower the risk. Although each user of the credit score has different cut off levels where they determine that anything below a score of XXX is too much risk, credit scores really even the playing field for all of us.

  • People can get loan decisions faster
  • Credit decisions are fairer
  • Older credit problems count for less

Your credit report and the information that it contains directly impacts your credit score. For this reason, it is very important that you monitor the information that appears in your credit report. Recent changes to the law entitle you to a free credit report every year. You can start the easy process of getting your free credit report by clicking here.

Your credit score is calculated (developed) base upon five criteria:

  1. Your payment history- 35% of your score is weighted on how you have historically handled your credit obligations
  2. The amounts that you owe- 30% of your score is calculated based upon how much credit do you have available to you. Put another way, are you maxed out on your credit cards? The more credit that you have available to you, the better the effect on your credit score.
  3. Length of Credit History- 15% of your score is based upon much of your history is available. In other words, are you just starting out with credit, or have you had a long history of using credit?
  4. New Credit- 10% of your score is calculated based on how long it has been since you opened a new account. If you're opening a new credit account every month, this may have an adverse impact on your score. However, because only 10% of your score is based upon this factor, the overall impact here is small.
  5. Types of Credit in use account for the final 10% of your score calculation. Do you have a good mix of retail accounts (store cards), credit cards, and installment loans? Again, this is a small percent of the calculation, so the types and mix of accounts will not have a huge bearing on your score.

Keep in mind that items 3, 4, and, 5 by themselves won't have a big impact on your credit score. However, these items will have a big impact when all are considered together.

To get more facts about your credit score, get this free ebook from .

Wednesday, February 20

How does info get on a credit report?

If you're reading this, then you're probably curious about how information gets into your credit report. How does your payment history and public records end up in a credit report? How does it translate into a credit rating?

How is information reported to the consumer reporting agency?

Your repayment history is the single most important factor in determining a credit score. This information is transmitted electronically from your bank, credit union, or finance companies, through the data processing system that the institution tracks your account with.

There is a system of codes that is used to universally transmit and decipher the information about your repayment history. These codes are referred to as the Metro II codes. These codes ensure that all lenders report information in a consistent manner. In addition to providing the status of the account (current, past due, delinquent) it also provides for reporting of the ECOA Codes (joint account, single account), Compliance Condition Codes (bankruptcy, legal, etc.), and, Consumer Information Indicators (account disputed, etc.).

As payments are received and posted to the financial institutions data processor, the payment due date is advanced and the status is updated to current, or past due, delinquent, etc. Note that past due is not the same as delinquent. 'Past due' or late payments will not show up on a credit report unless or until they are at least 30 days past due. Some financial institutions will not report late payments until you are 60 days past due.

After the payments are posted and the financial institutions data is updated, the information is sent to the credit repositories, primarily to Equifax, Trans Union, andor Experian. This data is transmitted electronically in Metro II format on a regular, usually monthly, basis.

How do public records get reported to the consumer reporting agency?

Before we talk about how a public record gets reported, let's first define what a public record is. Simply put, a public record is any information about you that is available to the public. For example, property transfers are public record. The status of your real estate tax bill is public record. Whether or not you have filed for bankruptcy is public record. Wage garnishments are handled through the sheriffs department and are public record. If you are party to a lawsuit, etc. All of this information is available in the public records area in your county clerks office.

There are those that visit the county offices, known as abstactors (one who gather and summarizes information), who gather this information and provide it to the credit reporting agencies.

The credit repositories then take this information and sell it to others in the form of a credit report. This credit report is used to determine any number of things. Employers use this information when considering you as a candidate for employment, obviously lenders use the data to determine your credit worthiness, and, insurance companies use the information to determine your eligibility and to price your premiums.

Sometimes the information that a lender reports is wrong. For example, you made your loan payment through the mail but is was mistakenly posted to another persons account. Maybe your account numbers are very similar and the person that posted the payment made a data entry mistake.

Other times, the public records are incomplete or inaccurate. If you have a common sir-name (Baker is very common in our area) information about another person with the same or a name very similar to yours may be picked up by the abstractor and reported on your credit report.

How does my new address and employer get reported to the CRA's?

Each time you apply for a loan or request credit, you're usually required to provide some personal information like your social security number, your date of birth, your address, and, your employer. The finance company or lender enters this data into its loan origination system usually before they order a credit report. When they order the credit report, the information that you provided is transmitted to the CRA that they are ordering the report from.

Here are a couple of other resources that I hope you find helpful.

How Credit Reports Work

Your Credit Report Brochure from the FRB of San Fransisco

Whats in your credit report from

Tuesday, February 19

What is a FICO Score?

This week, I'll be writing about your credit score, how creditors report to the repositories, what they report, when, and what you can do if you disagree.

In this video clip from the Suze Orman Show, Suze explains what a FICO Score is and how it used.

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Monday, February 18

Carnival of Personal Finance 140

Carnival of Personal Finance #140

This weeks Carnival of Personal Finance is hosted by The Financial Blogger.

Here are a couple of my favorites-

Time or Money, What do you want more of? By Money Management and You
This posts ties right in with some of the teachings of Timothy Ferriss’ book, the Four Hour Work Week

Lessons I wish I learned earlier by Smart Easy Money
A good reminder that history is our best teacher and that we can learn from the experiences, the successes and mistakes, of others.

Save Time and Money with These Tips for Organizing Your Personal and Financial Records by The Personal Financier
If anyone needs help filing, it’s me! Good advise on getting yourself organized.

My Experiment: Asking for a Better Deal by Alpha Consumer, Kimberly Palmer
This post is proof that you need to ask to receive. I wonder how many deals we pass up just because we don’t ask?

The Car I didn’t buy at Blunt Money
A perfect example of being happy with what we already have.

Thanks for all the great posts, and thanks to The Financial Blogger for hosting this week!

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Sunday, February 17

Good afternoon everybody,...

Good afternoon everybody, just wanted to say thanks, so very excited about the hits that we are getting on the blog. Thank you all for reading and look forward to see you again next week. listen

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