Bad Credit Score Research Paper
Negative credit has a significant impact on your ability to get a car or home loan. If you're approved for a loan with a low credit score, chances are you'll be paying a higher than normal interest rate. Poor credit causes you to pay more money to borrow, when compared to people having a higher credit score. The highest possible credit score is 850. The average credit score is 680 in the United States. Any score above 700 is considered a good score. Credit scores take time to increase, but it seems they can decrease almost overnight. Despite the intimidating aspects of credit, you don't have to be a financial genius to have a high credit score. Avoiding credit mistakes can mean the difference between receiving a 600, or a 750 credit score. Know the Scores
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The first mistake to avoid is lack of knowledge. Take time to learn, and understand how credit works. The worst thing you can do is not know all three of your credit scores. The three major credit bureaus are Experian, Equifax, and Transunion. You can obtain a free copy of your credit report at websites like www.myfico.com and www.freecreditreport.com. Look through the information contained in all three credit reports. Observe your credit score from each bureau. Identify discrepancies, and other errors. Dispute errors directly by contacting the credit bureau where the error appears, via mail, or online at the appropriate website. Credit Inquiries Lots of credit inquiries can lower your credit score. Anytime you apply for a loan, or fill out a credit application of any type, an inquiry is made on your credit report. Your application gives the lender or vendor permission to do so, particularly if your social security number is among the items on the application. Before providing your social security number to a lender or vendor, make sure you know the credit guidelines. This will let you know if you're likely to qualify. Avoid lenders who don't tell their credit guidelines. In cases where your credit score may be on the borderline, you shouldn't waste the inquiry into your credit. Credit inquiries take 12 months before they stop counting against your credit score. Reporting Assuming that all your current lenders report to the credit bureaus is a big mistake. The United States has a voluntary credit reporting system.
In other words, if a lender doesn't want to report your credit history to the credit bureaus, there is no one to make them. This is obviously to your detriment if you're an excellent borrower, with a good payment history. For example, if you have a loan with a credit union, it may not be reported with all three credit bureaus. Credit Unions as a whole, are notorious for not reporting to all three credit bureaus. Installment Loans Believe it or not, paying off installment loans early actually does more harm than good. Installment loans require a certain number of payments over a specific amount of time. An example of an installment loan is a home, or car loan. The longer you keep an installment note in good standing, the higher your credit score will go. For that reason, its better to keep installment notes for the full term of the loan, if its financially feasible to do so. Knowing your credit score, and properly managing your accounts is the key to maintaining a good credit score. http://www.money-zine.com/Financial-Planning/Debt-Consolidation/National-Average-Credit-Score/ http://www.credit.com/products/credit_reports/The-Top-10-Credit-Mistakes.jsp
http://money.aol.com/top5/credit/credit-score-mistakes
Obviously, the best way toward credit restoration is responsible spending and prompt payment of bills. However, what if your bad credit stems from inaccurate information on your credit report? What can you do? Legally you can request for a probe of data in your file which you contest as erroneous or not complete. No fee is necessary for this. Some folks engage a company to look into the data on behalf of them, but this attempt at credit restoration is not really necessary. Any credit restoration methods that can be done lawfully by a credit repair company can also be done by yourself at small or no expense. Many companies claim to be able to remove bad items from your credit report. However, this sort of credit restoration is really just a pipe dream. One cannot lawfully remove correct and damaging data from a credit report for credit restoration purposes. For credit restoration, inform the consumer reporting firm in writing, what data you think is erroneous. Send photocopies, not originals, of all documents to back up your contention. Besides supplying your full name and mailing address, your communication should list out the erroneous items you contest in your report; mention clearly the facts and the basis on which you contest the information, and demand that the erroneous data be withdrawn or rectified. It is a good idea to attach a photocopy of your report with circles around the items of dispute. This type of credit restoration method can be highly effective. Just make sure to dispatch your communication by certified mail or "return receipt requested" to obtain evidence that your communication has reached the consumer reporting company. Ensure that you retain copies of your contest letter and attachments. The consumer reporting companies are obliged to scrutinize the disputed items within a period of 30 days - not if they think that your contest is frivolous. They are required to send all the related data you furnish about the error to the agency that supplied the information. On receipt of the contest notice from the consumer reporting firm, the data supplier is obliged to examine and reappraise the relevant data, and report the outcomes to the consumer reporting company back. If this examination proves that the contested information is indeed erroneous, the data supplier must inform the consumer reporting companies across the country so they can rectify the errors in your file. On completion of the examination, the consumer reporting company is required to inform you in writing the outcomes along with a copy of your report free of cost if the contest culminates in a modification. If a data item is altered or removed, the consumer reporting company can not include the contested data in your file again provided the data supplier does not confirms that the item is correct and in full. The consumer reporting company is also required to provide you in writing full details (name, address, and telephone number) of the data supplier. You have the right to ask and the consumer reporting firm has the obligation to send details of any rectification to all those who got your report during the last six months. Additionally, you can demand that a rectified copy of your report be mailed to anyone who got a copy within the last two years for employment reasons. In your credit restoration efforts, if a probe doesn't settle your contest with the consumer reporting company, you are entitled to demand that details of the contest should be incorporated in your file and also in reports to be issued in future. You also have right to demand the consumer reporting company to give your statement to all those who got a copy of your report recently. However, be prepared to pay a fee for this requested service.
Current homeowners and prospective ones stand to benefit from a few important tax credits offered by the government this year. Knowing that these credits are available can provide the incentive to purchase a home as well as the incentive to make improvements to a current or newly purchased home. First-Time Home buyer Credit For those individuals who are on the edge of the fence trying to decide if they should jump over onto the greener grass of home ownership or might just want to do so in order to take advantage of the first-time homebuyer credit offered by the government. They will have to act quickly though because only homes purchased by December 1, 2009 will qualify for the refundable credit. This tax credit is worth up to $8,000 or 10% of the purchase price of a home with a price tag under $80,000. This is quite a nice sum of money that can be deducted from the homeowner's federal income tax for 2009. This credit effectively lowers the tax liability. If the credit turns out to be more than the homeowners owes, the federal government issues a refund to the homeowner in the amount of the difference. Certain qualifications must be met in order to take full advantage of this tax break. It does not matter whether you buy a condo, single-family home, or town home, as long as the home is going to be your primary residence. Additionally, the individual must be a U.S. citizen. He must also purchase the home for someone other than a relative. Certain income requirements must also be met. Single home buyers must have an income of less than $75,000 in order to receive a full credit, while married home buyers must have an income of less than $150,000 in order to receive a full credit. For partial credit, single home buyers must have an income in between $75,000 and $95,000, while married home buyers must have an income in between $150,000 and $170,000. While home buyers who purchased their homes in 2008 were able to take advantage of a temporary credit by way of an interest-free loan, home buyers who purchase their residence in 2009 are able to take advantage of a credit that they do not have to repay. However, in order for this to take effect, the homeowners must live in their new home as a principal residence for at least three full years. Any less than that and the money will have to be repaid to the federal government. Forms to File to Receive the First-Time Home buyer Credit In order to receive the first-time home buyer's credit, a federal tax form must be filed. Additionally, form 5405 must also be filed with the tax form. This form can be downloaded from the IRS website or it can be obtained with a simple phone call to the IRS. The Real Property Tax Deduction The real property tax deduction is available to those homeowners who do not itemize on their federal income tax but who pay property tax. This is a temporary deduction that is available for 2009. It increases the standard deduction for homeowners who do not itemize when they file their taxes. Field Guide to Low Housing Tax Credits
The first mistake to avoid is lack of knowledge. Take time to learn, and understand how credit works. The worst thing you can do is not know all three of your credit scores. The three major credit bureaus are Experian, Equifax, and Transunion. You can obtain a free copy of your credit report at websites like www.myfico.com and www.freecreditreport.com. Look through the information contained in all three credit reports. Observe your credit score from each bureau. Identify discrepancies, and other errors. Dispute errors directly by contacting the credit bureau where the error appears, via mail, or online at the appropriate website. Credit Inquiries Lots of credit inquiries can lower your credit score. Anytime you apply for a loan, or fill out a credit application of any type, an inquiry is made on your credit report. Your application gives the lender or vendor permission to do so, particularly if your social security number is among the items on the application. Before providing your social security number to a lender or vendor, make sure you know the credit guidelines. This will let you know if you're likely to qualify. Avoid lenders who don't tell their credit guidelines. In cases where your credit score may be on the borderline, you shouldn't waste the inquiry into your credit. Credit inquiries take 12 months before they stop counting against your credit score. Reporting Assuming that all your current lenders report to the credit bureaus is a big mistake. The United States has a voluntary credit reporting system.
In other words, if a lender doesn't want to report your credit history to the credit bureaus, there is no one to make them. This is obviously to your detriment if you're an excellent borrower, with a good payment history. For example, if you have a loan with a credit union, it may not be reported with all three credit bureaus. Credit Unions as a whole, are notorious for not reporting to all three credit bureaus. Installment Loans Believe it or not, paying off installment loans early actually does more harm than good. Installment loans require a certain number of payments over a specific amount of time. An example of an installment loan is a home, or car loan. The longer you keep an installment note in good standing, the higher your credit score will go. For that reason, its better to keep installment notes for the full term of the loan, if its financially feasible to do so. Knowing your credit score, and properly managing your accounts is the key to maintaining a good credit score. http://www.money-zine.com/Financial-Planning/Debt-Consolidation/National-Average-Credit-Score/ http://www.credit.com/products/credit_reports/The-Top-10-Credit-Mistakes.jsp
http://money.aol.com/top5/credit/credit-score-mistakes
Obviously, the best way toward credit restoration is responsible spending and prompt payment of bills. However, what if your bad credit stems from inaccurate information on your credit report? What can you do? Legally you can request for a probe of data in your file which you contest as erroneous or not complete. No fee is necessary for this. Some folks engage a company to look into the data on behalf of them, but this attempt at credit restoration is not really necessary. Any credit restoration methods that can be done lawfully by a credit repair company can also be done by yourself at small or no expense. Many companies claim to be able to remove bad items from your credit report. However, this sort of credit restoration is really just a pipe dream. One cannot lawfully remove correct and damaging data from a credit report for credit restoration purposes. For credit restoration, inform the consumer reporting firm in writing, what data you think is erroneous. Send photocopies, not originals, of all documents to back up your contention. Besides supplying your full name and mailing address, your communication should list out the erroneous items you contest in your report; mention clearly the facts and the basis on which you contest the information, and demand that the erroneous data be withdrawn or rectified. It is a good idea to attach a photocopy of your report with circles around the items of dispute. This type of credit restoration method can be highly effective. Just make sure to dispatch your communication by certified mail or "return receipt requested" to obtain evidence that your communication has reached the consumer reporting company. Ensure that you retain copies of your contest letter and attachments. The consumer reporting companies are obliged to scrutinize the disputed items within a period of 30 days - not if they think that your contest is frivolous. They are required to send all the related data you furnish about the error to the agency that supplied the information. On receipt of the contest notice from the consumer reporting firm, the data supplier is obliged to examine and reappraise the relevant data, and report the outcomes to the consumer reporting company back. If this examination proves that the contested information is indeed erroneous, the data supplier must inform the consumer reporting companies across the country so they can rectify the errors in your file. On completion of the examination, the consumer reporting company is required to inform you in writing the outcomes along with a copy of your report free of cost if the contest culminates in a modification. If a data item is altered or removed, the consumer reporting company can not include the contested data in your file again provided the data supplier does not confirms that the item is correct and in full. The consumer reporting company is also required to provide you in writing full details (name, address, and telephone number) of the data supplier. You have the right to ask and the consumer reporting firm has the obligation to send details of any rectification to all those who got your report during the last six months. Additionally, you can demand that a rectified copy of your report be mailed to anyone who got a copy within the last two years for employment reasons. In your credit restoration efforts, if a probe doesn't settle your contest with the consumer reporting company, you are entitled to demand that details of the contest should be incorporated in your file and also in reports to be issued in future. You also have right to demand the consumer reporting company to give your statement to all those who got a copy of your report recently. However, be prepared to pay a fee for this requested service.
Current homeowners and prospective ones stand to benefit from a few important tax credits offered by the government this year. Knowing that these credits are available can provide the incentive to purchase a home as well as the incentive to make improvements to a current or newly purchased home. First-Time Home buyer Credit For those individuals who are on the edge of the fence trying to decide if they should jump over onto the greener grass of home ownership or might just want to do so in order to take advantage of the first-time homebuyer credit offered by the government. They will have to act quickly though because only homes purchased by December 1, 2009 will qualify for the refundable credit. This tax credit is worth up to $8,000 or 10% of the purchase price of a home with a price tag under $80,000. This is quite a nice sum of money that can be deducted from the homeowner's federal income tax for 2009. This credit effectively lowers the tax liability. If the credit turns out to be more than the homeowners owes, the federal government issues a refund to the homeowner in the amount of the difference. Certain qualifications must be met in order to take full advantage of this tax break. It does not matter whether you buy a condo, single-family home, or town home, as long as the home is going to be your primary residence. Additionally, the individual must be a U.S. citizen. He must also purchase the home for someone other than a relative. Certain income requirements must also be met. Single home buyers must have an income of less than $75,000 in order to receive a full credit, while married home buyers must have an income of less than $150,000 in order to receive a full credit. For partial credit, single home buyers must have an income in between $75,000 and $95,000, while married home buyers must have an income in between $150,000 and $170,000. While home buyers who purchased their homes in 2008 were able to take advantage of a temporary credit by way of an interest-free loan, home buyers who purchase their residence in 2009 are able to take advantage of a credit that they do not have to repay. However, in order for this to take effect, the homeowners must live in their new home as a principal residence for at least three full years. Any less than that and the money will have to be repaid to the federal government. Forms to File to Receive the First-Time Home buyer Credit In order to receive the first-time home buyer's credit, a federal tax form must be filed. Additionally, form 5405 must also be filed with the tax form. This form can be downloaded from the IRS website or it can be obtained with a simple phone call to the IRS. The Real Property Tax Deduction The real property tax deduction is available to those homeowners who do not itemize on their federal income tax but who pay property tax. This is a temporary deduction that is available for 2009. It increases the standard deduction for homeowners who do not itemize when they file their taxes. Field Guide to Low Housing Tax Credits