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Posts Tagged ‘va credit requirements’

Veteran and Military Credit Blog

Thursday, August 12th, 2010

Checking for errors:

Creditors aren’t perfect, either

Other people make mistakes too. Even banks and credit – card payment processors. Considering that about 4.5 billion pieces of data are added to credit reports every month, it shouldn’t be a big surprise that incorrect information may show up on your credit report. And won’t even get into the unrelated problem of errors caused as a result of identity theft. There have been a number of conflicting studies on what percentage of reports contain errors and of those, how many were serious enough to affect either the terms under which credit was granted or if it was granted at all. So, you may have errors on your report or not. And they may be serious or not. But unless you are feeling really lucky, I strongly suggest you find out what’s in your report.

Still, credit –reporting agencies have a vested interest in the accuracy of the information they report. Remember: They sell it, and their reputations are on the line if their information is consistently inaccurate, If credit – reporting agencies consistently provide error – riddled data, those who grant credit won’t be as eager to pay money to get or use a bureau’s credit reports.

Getting a copy of your credit report gives you a chance to check for these errors and – better yet – get them corrected! You can have inaccurate information removed by one of two methods: contacting the credit bureau or contacting the creditor.

Contacting the credit bureau

If you notice incorrect information on your credit report, contact the credit bureau that reported the inaccurate information. VA Credit Solutions can assist you with Free Credit Repair too.  Each of the three major bureaus allows you to dispute information in your credit report on its Website, or you can call the bureau’s toll free number. If you make your dispute online, you’ll need to have a copy of your credit report available; there is information on the report that will allow the bureau to confirm your identity without a signature. If you opt to call the toll free number, you’re unlikely to get a live person on the other end – this stuff is heavily automated – but you’ll be told what information and documentation you need in order to submit a written request. After you properly notify the credit bureau, you can count on action.

Credit – reporting agencies are required by the Fair Credit Reporting Act to investigate any disputed listings. The credit bureau must verify the item in question with the creditor at no cost to you, the consumer. The law requires that the creditor respond and verify the entry within 30 days, or the information must be removed from your credit report, and the credit reporting agency has to notify you of the outcome. If information in the report has been changed or deleted, you also get a free copy of the revised report.

Contacting the creditor

Another way to remove inaccurate information from your credit report is out – lined under the Fair and Accurate Credit Transactions Act, passed in 2003 and rolled out in pieces through 2005. Under these new FACTA provisions, you can deal directly with the creditor who reported the negative information in the first place. Contact information is contained on your last billing statement from the creditor.

I strongly suggest you do everything in writing, return –receipt requested. After you dispute the information, the reporting creditor must look into the matter and cannot continue to report the negative information while it’s investigating your dispute.

For new delinquencies, FACTA now requires that you be notified if the negative information is reported to a credit bureau. That said, you may have to look closely to even see this new notice. Anyone who extends credit to you must send you a one-time notice either before or no later than 30 days after negative information – including late payments, missed payments, partial payments, or any other form of default- is furnished to a credit bureau. The notice may look something like this:

· Before negative information is reported: “We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report.”

· After negative information is reported: “We have told a credit bureau about a late payment, missed payment, or other default on your account. This information may be reflected in your credit report.”

The notice is not a substitute for your own close monitoring of your credit reports, bank accounts, and credit-card statements.

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Posted in General Veteran Information, VA Credit Score Info | No Comments »

Military Veterans need to know how their credit scores affect them

Monday, March 8th, 2010

 

If you aren’t careful about your credit, you could end up paying dearly for a low credit score. Not only can a low score stand in the way of getting a loan for your dream home or dream car, but even if you do get the loan, a less-than-stellar score will make it expensive. As your credit score decreases, you become more of a credit risk in the eyes of lenders. This means they’ll attach a higher interest rate to your loan, and your monthly payments will jump. On the other hand, a high score will lower that interest rate.

Although the score has a big impact, keep in mind that there are other factors that influence the interest rate you get for a loan besides your credit score. These might include things like the type of property you are using the loan to buy, how much of your own money or equity is going into it, the costs the lender pays to make the loan and so on.

In addition to banks and lenders, there are landlords, merchants, employers and insurance companies jumping on the credit score bandwagon. Of all of these, the fact that insurance rates are being determined by credit scores is causing consumers the most alarm. To most, it seems that your credit history and your driving record have little in common. Insurers, on the other hand, have found that credit scores help them predict how likely someone is to file claims. The rule of thumb is the lower the score, the higher the likelihood of filing claims. ­They don’t use the same score that banks and lenders use, however. They use a slightly different formula for their calculations and actually call it an insurance score.

Insurers’ use of credit histories to determine rates is under scrutiny nationwide. Many states are passing laws restricting this practice. In a few states, insurance companies can’t make decisions based solely on credit. In some others, if an insurance company makes a decision that negatively affects your policy based on your credit, it must disclose to you the reasons behind the decision [source: CreditInfoCenter].

Another practice that particularly upsets consumers has to do with credit card companies’ policy of universal default. Although we’ve already learned how a credit score can determine your interest rate, in the case of credit cards, your interest rate can change at the drop of a hat — or rather, at a drop in your score. Even if you always pay your credit card bill on time, if you default on a completely separate loan, your interest on your credit card debt could rise dramatically.

Prospective lenders aren’t the only ones who judge you based on your credit report and credit score. Potential employers check out your credit report too. Why is that you ask? After all, they’re in position to pay you, not the other way around. But businesses reason that the way you handle your finances is a reflection of your behavior in other areas of your life. If you’re late paying bills, you may be late to work. If you default on your car loan, you may not follow through with an important assignment.

Even if your credit woes can be explained, bad credit is a distraction from the employer’s perspective, and it detracts from worker productivity. Recent research shows that employees with credit problems are significantly less productive on the job than those without. So, the easy way out for the employer is to not bother to find out what’s going on, but to hire someone with good credit instead.

Increasingly, credit checks are a standard part of hiring and even promotion process at companies large and small throughout the United States.

All this adds up to say that credit scores are enormously important. So putting a little thought into improving your score could prove a good investment.

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Posted in VA Credit Score Info | 3 Comments »