Mixed credit reports are caused when the credit bureau places information belonging to another consumer on your credit report.
The reason mixed files are so hard to correct is because the lender typically is not sending in incorrect information. The problem is being caused by the credit bureau inadvertently commingling data belonging to two consumers and placing it on one credit report.
Credit reporting agencies are under no obligation to proactively investigate the information on your credit reports to determine if it’s yours or if it belongs to another person with the same name.
It's you’re responsible for pulling your own credit reports, reviewing the information and then filing a formal dispute with the credit bureaus if you find data that you believe is incorrect or belongs to someone else.
Additional reasons for incorrect data in credit files include:
>You have a common name
>The person applied for credit under different versions of their name (Robert Jones, Bob Jones, etc.)
>Clerical error in reading or entering name or address information from a hand-written application
>The person gave an inaccurate Social Security number, or the number was misread by the lender
>Sr.'s and Jr.'s living within the same household get account information crossed
>Loan or credit card payments were inadvertently applied to the wrong account
Did you know that March is National Credit Education Month? As a business owner, your business and personal credit scores may affect various aspects of your business.
Aside from the fact that you should avoid racking up debt, if you ever want to apply for alternative financing, the lender will likely need to know your credit score. Understandably, many business owners get stressed out when it comes to maintaining or improving their credit scores.
1. Understand the difference between your business and personal credit score – Many people don’t realize that business and personal credit scores are not the same. To start, business credit scores are generated by companies like Dun and Bradstreet and Equifax. In most cases, you’ll need to pay to get a copy of your business credit report, while your personal credit report can be accessed for free through various websites. Another difference is that the scale for business and personal credit scores are different – while personal scores can range from 300 to 850, business credit scores usually range from 0 to 100.
2. Check your score frequently – Even if you think your credit scores are sufficient, things change. There could be an error on your personal or business credit report in the future, or your score could fluctuate depending on whether or not you make payments on-time, among other factors. Make it a consistent initiative to monitor your scores, so that you are never in the dark!
3. See how you measure up – While every business is different, it is important to know how your credit scores fare in terms of other businesses. If your score is below the national average, then it is imperative that you work to raise it. For instance, according to Value Penguin, the national average personal credit score in the U. S. is 695. By knowing the average scores, you can set goals for your business to meet.
4. Focus on meeting payment deadlines – If you’re serious about boosting your personal credit score, a good place to start is to ensure that you’re paying your bills early or on-time. If paying bills late is one of your bad habits, set up payment reminders through your banking portals, so that you’re notified before a payment is due. By making payments on-time moving forward, you’ll likely see your personal credit score increase. Same goes for your business credit score – pay outstanding balances on your business accounts on-time, too!
5. Reduce debt – It’s easier said than done, but paying off an outstanding balance can be a great way to improve your credit score. Even if it is reducing it by small amounts, it is important to make an effort to pay off debt. Once eliminated, make it a priority to stay debt-free. Your future self, and your credit scores, will thank you!
CREDIT EDUCATION MONTH: DEALING WITH A BAD CREDIT REPORT
Think of your credit report as a reflection of your financial character that impacts almost all the major & minor financial decisions you make. Therefore, reviewing your credit report may confirm your fears if you have made some credit mistakes in the past. As part of Credit Education Month, here are some steps that you can take to make the situation better and repair your credit report.
Steps to Repair Your Credit Report for Credit Education Month
Correct any Errors on Your Report
It’s common to find that there is incorrect information in your credit report. You have the legal right to dispute and correct this information, and you should. You can send a written dispute to each credit reporting agency that has reported inaccurate information. By law, they must investigate the entry, correct any mistakes, and respond to you within 30 days. Afterward, you should obtain another copy of your credit report to confirm the corrections. Then, you should also send the results of the investigation to the other credit reporting agencies.
Written by Elizabeth Aldrich
If you mess up financially, or even make a tiny mistake, you can usually bet it will lower your credit score. However, if you’re doing everything you should and being financially responsible, that doesn’t always mean your credit score will increase.
It’s unfair, but building credit usually requires some knowledge of how credit scores are calculated and active and intentional financial decisions based on that knowledge. For example, being so responsible with your money that you don’t need a credit card won’t help your credit at all, but taking out a credit card you don’t need, using it for regular purchases, and paying it off each month will.
This is especially true for renters. Missing a rent payment, getting sent to collections, or getting evicted will almost certainly affect your credit. However, paying your rent on time likely won’t. That’s because your rent payments aren’t automatically reported to the major credit bureaus.
What is rent reporting?
Rent reporting is when your rental manager or a third party service reports your rent payments to credit bureaus for you. This third party service can be a rent reporting service that charges a monthly fee, or it can be a portal through which you pay your rent that offers rent reporting and may or may not charge a fee. Examples include Rent Reporters and Credit my Rent.
If you have rent reporting, it means that the credit bureaus being reported to are tracking your on-time payments and taking them into consideration when they calculate your credit score. So, as long as you never pay late, rent reporting will increase your credit score.
Why you should sign up for rent reporting
Rent reporting is a great, easy way to build your credit score by simply paying your rent on time. While there are loans and credit cards specifically designed to help you build credit, it doesn’t hurt to add on-time rental payments into the mix as well.
This is a great option for people who don’t plan on buying a home anytime soon. It allows their rent payments to still have a positive impact on their credit profile. It’s also a way to build a little credit for people who don’t have any, although taking out a credit building loan or secured credit card will still be necessary to build a substantial amount of credit.
Another benefit of rent reporting is having an official record of your on-time rent payments. If you ever plan to rent again, this can be very beneficial. Landlords almost always want to see a good rental history, and relying on references from old landlords isn’t always the most credible way to vouch for a new renter. This is especially true if you have no or low credit and are having trouble finding a place that will rent to you — showing them a record of on-time rental payments will help convince them.
The drawbacks of rent reporting
There are no real drawbacks to rent reporting in terms of your credit score. Of course, if you miss a payment, it will impact your credit negatively. But late payments can be reported to the credit bureaus even if you aren’t registered for rent reporting.
The only real drawback to rent reporting is that is often costs money. There is a chance that your landlord is already signed up for rent reporting, so be sure to ask if they are before looking into services on your own.
If your rental management doesn’t already report your rent payments, you’ll have to look into third party services on your own. These often have a setup fee and then a monthly fee associated with them. Setup can range from a few dollars to $100, and monthly fees can range from nothing to around $10.
If you decide that rent reporting is right for you and find a service that you like, it’s worth talking to your landlord and seeing if they’ll include rent reporting in your rent. They may decide to offer it as an added bonus to their future renters.
How to sign up for rent reporting
Again, the first step is to ask your landlord if they’re already signed up for rent reporting. Your on-time rent payments could already be boosting your credit score without you even knowing it.
If you’re not signed up for rent reporting, it’s time to shop around. The most important thing to know is that every rent reporting service reports to different credit bureaus. Some may only report to smaller credit bureaus, while others may report to one of the major credit bureaus, and others still may report to all three major credit bureaus.
The problem with a rent reporting service that only reports to certain credit bureaus is that they may not be reporting to credit bureaus that your future lenders use. You have many different credit scores, and when you apply for a credit card, mortgage, or loan, the bank will typically look at one of those scores from one of those bureaus – whichever bureau they typically pull from. If your rent reporting service is reporting to credit bureau A, but all your future lenders pull your credit report from credit bureaus B and C, then the rent reporting service you paid for was essentially useless.
The three major credit bureaus are Experian, Equifax, and TransUnion. Ideally, you’ll want to find a rent reporting service that reports to all three. You should calculate the total annual cost, include setup and monthly fees, and find the most inexpensive option that reports to major credit bureaus. Be sure to ask the service what happens in the case of a dispute with your landlord.
Other perks to look for are things like free access to credit scores and recommendations for specific lenders and credit cards that pull credit reports from the credit bureaus that your service reports to.
by Gerri Detweiler
From student loans to a house mortgage, debt accumulation is stressful and overwhelming. As you make moves to get out of debt, you might want to consider consolidating credit cards or other loans to save you time and money. But that begs the question—does debt consolidation help or hurt your credit?
The answer depends on how you consolidate and what you do with your debt afterward.
1. Debt Consolidation Loans
Getting a new loan to pay off other debts is the most popular way to consolidate. It’s certainly what most people think of when they consider consolidation. But finding a loan that has decent terms and is designed specifically for the purpose of consolidation can be challenging—especially if your credit scores are a bit lower due to the balances you’re carrying.
It’s certainly not impossible, though. Look for reputable debt consolidation companiesthat will work for your specific situation.
Tip: Triple check lenders’ certifications to make sure you’re dealing with a legitimate site if you’re shopping for a loan online. Scams abound.
Effect on Your Credit:
Consolidating credit cards with high balances using an installment loan (i.e. a loan with fixed monthly payments) may actually benefit your credit rating, especially if you use the loan to pay off credit cards that are near their limits. At the same time, any new loan can cause a short-term dip in your credit scores—so don’t be too surprised if you see your credit score change slightly when taking out a new loan.
2. Debt Management Plans
Debt management plans are often confused with debt consolidation—however, they’re very different programs. Debt management plans (DMPs) are offered through credit counseling agencies and, much to many people’s surprise, they don’t actually consolidate your debt.
Instead, you make a “consolidated” payment to the counseling agency, which then pays each of your creditors—usually at a reduced interest rate. Even though you’re making only one or two monthly payments, the counseling agency doesn’t actually pay off your creditors for you—it simply acts as a middle man to help you repay your debts and ensure that the creditors get the money they’re owed. These programs are available regardless of credit scores, so if you are having trouble consolidating, a DMP might be worth considering.
Tip: If you choose to move forward with a DMP, you should close or suspend your credit card accounts. Unfortunately, you’re not permitted to use credit cards while enrolled in a DMP.
Effect on Your Credit: If you have a good credit score and adhered to a creditor’s repayment terms in the past, a DMP could have a negative impact on your credit as it indicates that you are experiencing or have experienced difficulty with payments. Also, since a DMP directly impacts payment terms, credit reporting agencies might ping your DMP commitment because it designates a change in payment policies.
3. The Credit Card Shuffle
Transferring a high-rate credit card balance to a card with a lower rate is another way to consolidate. Carrie Rocha, author of Pocket Your Dollars: 5 Attitude Changes That Will Help You Pay Down Debt, and her husband paid off some $60,000 in debt, and taking advantage of low-rate balance transfers was one of the strategies they used to dig out. However, if you decide to go this route, you must be very disciplined in your approach. Otherwise, you may fall into traps such as getting stuck with a balance at a high interest rate after the introductory period ends.
Tip: Read the fine print. Keep your eyes peeled for any “but” or “until.”
Effect on Your Credit: It depends on how you use a transfer. You’ll often see a temporary dip in your credit score when opening any new card. If you use a substantial portion of the available credit (on the card) to consolidate balances from other cards with lower balance-to-available-credit ratios, your credit scores may drop from that as well. Finally, you may also lose points if you open a new card and use a majority of the credit line to consolidate.
However, if a 0% card allows you to save money and pay off your debt faster, you can come out ahead in the long run, both financially and credit score–wise.
The End Goal: Less Debt Equals Stronger CreditPaying down debt can have a tremendous impact on your credit scores. According to FICO, the company behind most of the credit scores used by lenders, consumers with high credit scores (e.g. 785 and above), tend to keep their balances low. Specifically, two-thirds of consumers with good credit carry less than $8,500 in non-mortgage debt, and they use an average of 7% of their available credit on their credit cards.
That means that paying off debt—whether you use a consolidation loan or just put every penny you can toward your debt—will often improve your credit ratings in the long run. The biggest risk, though, is that it’s easy to run up new balances on the cards you paid off in the consolidation—and that’s definitely not a good move for your credit or your bottom line. As you make progress on paying off your loans, periodically check your free credit report to see where you stand.
Remember, moving debt is a means to your end. The goal is to pay off those balances and free up cash flow as well as to help build strong credit. So whether it’s a consolidation loan, credit card shuffle, or DMP, know your options so you get there just a little faster.