| |
| |
| Credit Information | |
|
|
|
Credit Reporting: How Does It Work?
In order to determine a consumer's credit worthiness, creditors and lending institutions have come to depend on credit reporting agencies. Credit reporting agencies supply individual reports that provide consumer specific information for lending purposes. With the advent of technology, most creditors now have automated systems that provide them direct access to credit reporting agencies. In most cases, credit agencies or credit bureaus provide personal, legal, and account history related information. In recent years it has become more common for lending institutions to use multiple credit reports to meet lending requirements. Besides meeting lending requirements, multiple reports also provide additional security measures. Using multiple sources for reporting purposes provides a more comprehensive and complete background check on a consumer's credit and spending history. Traditionally, when a consumer submits a credit application, creditors forward that information to the credit reporting agencies. This is how credit reporting agencies are able to accumulate personal information on people. This information often includes items such as the consumer's name, address, social security number, employment information, marital status, telephone number, and possibly income. By utilizing credit reports, lending institutions are able to cross-reference the information that a consumer provides on a credit application with the information that the credit reporting agencies have on file. Some credit reporting agencies even hire companies and or contractors to research and verify that the information entered on a consumer's credit application is accurate and verifiable. Most credit accounts, on a monthly basis, are reported to credit reporting agencies; these reports will reflect a payment and account history for all credit related accounts. The information that a credit reporting agency provides is known to as a tradeline. On a credit report, there is traditionally a tradeline for every creditor that reports account information to the bureaus. As I mentioned earlier, not all lending institutions report to the credit bureaus; however, most do. The major credit bureaus provide reports which include a consumer's payment history in 30-day intervals. This is due to the fact that most consumer billing cycles follow a similar payment pattern. Most lending institutions have a proprietary set of rules and guidelines that govern the thresholds at which they report consumers as being delinquent in their payments. It has been my experience that some lenders have gone as far as not report delinquency until the consumer's account reaches 60 days past due. Other lenders are much stricter in their guidelines and will report delinquency at 30 days past due. Traditionally, a credit report will provide a detailed summary of any delinquency you have had with your creditors. This is measured by the number of times that you fallen more than 30, 60, 90, and 120 days past due. Many of these credit reports use a rating system that assigns a specific status code to each 30-day period of missed payments. In the consumer lending industry, this method is often referred to as the simple method. For example, an R-1 rating represents a consumer account that is current or an account that was paid properly and that is in good standing; an R-2 rating indicates that payments were paid 30 days or more after the due date but less than 60 days after the original due date; an R-3 rating represents that the bill was paid 60 or more days after the original due date but is less than 90 days past due; an R-4 rating shows that a consumer has fallen 90 or more days past due but is less than 120 days delinquent; an R-5 rating indicates that a consumer has fallen 120 or more days past their original due date; an R-7 rating shows that a creditor was forced to repossess collateral on the account and an R-8 rating means that the account was referred to collections in an attempt to recoup payment. The rating of R-9 is traditionally used to show that a debt or debts have been discharged through bankruptcy, have been repossessed or foreclosed upon, or are currently in collections. Alan Barnes IAPDA Certified Debt Arbitrator and President and CEO of Debt Regret, Inc. http://www.debtregret.com
MORE RESOURCES:
Credit - Google News |
|
|
|
RELATED ARTICLES
Useful Tips On Avoiding Credit and Charge Card Fraud Credit and charge card fraud costs cardholders and issuers hundreds of millions of dollars each year. While theft is the most obvious form of fraud, it can occur in other ways. Read and Understand Your Credit Card Statement Have you ever looked at your credit card statement and ended up just scratching your head in frustration? Well join the club! But don't take any comfort in the fact that you have plenty of company, because lack of knowledge can cost you?.right on your credit report, and once there can stay with you a while. Credit Score - Reporting Your Financial Health Credit score is one of the most basic, determining factor while loan borrowing. Credit score is the criterion for the creditor to ascertain whether to give you credit or not. Credit Card Is Adding The Silver Lining To Your Pocket In the new millennium plastic money or credit cards has rendered a new zing factor to your pocket. This has not only made you economically more flexible but subsequently added glamour to your financial image as well. What Are The Most Common Credit Card Mistakes? Now in a world with so many easy to get credit cards it can be easy for someone who is a first time credit card holder, or even someone who has several credit cards in the past to make mistakes when using the card.One of the most common mistakes when using credit cards is to use the credit card to make purchases of things you are not really able to afford. What is the Check 21 Act? Check 21 is the common name for the Check Clearing for the 21st Century Act. It's new legislation that was recently passed by congress and made a law when signed by the President of the United States (remember "I'm just a bill" from Saturday morning cartoons). Which Citi Mastercard Is Right For You? You've decided to apply for a Citi MasterCard, but with so many different cards to choose from, how do you know which one is right for you? Here is a brief guide to the different types of MasterCard available from Citibank.A great MasterCard program is the Citi Platinum Select Card. Credit Repair Kit Sound To Good To Be True? It Is. A lot of people have bad credit. It is unfortunate that good people with good intentions are sometimes lured into credit card offers with outrageous interest rates or convinced to buy a new, overpriced car that they cannot afford. Useful Tips on Borrowing Money Here are some useful tips on borrowing money. Borrowing money is one of the most common sources of funding for a small business, but obtaining a loan isn't always easy. Errors on Your Credit Report: What You Should Do There are times when you may be turned down for credit and you do not understand why. According to the Fair Credit Reporting Act you are entitled to a free copy of your credit report if you have been denied credit because of negative items on your credit report within 60 days of the request for credit, if you are unemployed but looking for work, are on welfare, or believe that your credit report is incorrect because of fraud. Identity Theft - Monitor Your Credit Report The recent security breach at credit card processor CardSystems Solutions has many consumers worried. Thanks to a well-placed computer virus, nearly forty million credit card numbers were stolen, and cardholders nationwide are justifiably concerned about identity theft. Credit Repair: How To Deal With Your Creditors If you are in danger of credit problems because you have more debts than you can handle, there are things you can do at least keep your creditors reasonably happy.First, prioritize your debts or rank them in terms of the ones that can give you the most trouble the quickest. Online Credit Report and Online Credit Reports Online credit reports are easily accessible to those interested in viewing them. If you have wondered about what kind of credit score you have, you can go on the Internet and look at your online credit report. Cash Advance - How Does It Work? If you want a cash advance or a payday/paycheck loan, you usually get a personal check. Some companies use your bank account or credit card in addition to or instead of a check. Start Building Credit Fast! There are a couple of reasons for this. You can pay your bills on time for years and never gain more than a few points on your credit score. Useful Tips When Choosing Credit Cards Chances are you have received your share of "pre-approved" credit card offers in the mail, some with low introductory rates and other perks. Many of these solicitations urge you to accept "before the offer expires. How To Read Your Credit Report The Fair and Accurate Credit Transactions Act, signed into law on Dec. 4, 2003, gives every American the right to a free credit report every year from each of the three major credit bureaus -- Equifax, Experian and TransUnion. Credit Report - Watch Out for Parking Tickets The economic downturn of the last five years has affected millions of Americans, but it has also affected the budgets of states, cities and counties. With limited tax dollars with which to work, various government entities have had to try to stretch their budgets to allow them to continue to function. Why Consumers Need a Nationwide Credit Freeze NOW What do a shoe retailer, an online discount broker, and a popular clothing retailer all have in common? All three - DSW Shoe Warehouse, Ameritrade, and Polo Ralph Lauren - sustained breaches to their customers' accounts. Unfortunately, these three are not alone when it comes to security breaches. Addressing Bad Credit Card Debt Spending HabitsSo you've just got your credit card. The first thing you need to be wary about is that a credit card is very easy to use - afterall you can shop in stores, via catalogs and online with your credit card.
|
| home | site map |
| © myfinancialsolutiononline.com 2007 |
