January 30, 2009
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News: Credit Card Worthiness (or, the lack of…).
Priorities change with conditions. With the credit card industry on the ropes, Americans are becoming more and more concerned with their credit reports. It all mostly begins with your credit report. Note: A credit report and credit score are two different things. The credit score used by the credit card industry is called the FICO Score. It's a three-digit number and is derived from a credit report (which is usually very lengthy). So, ultimately but not directly, your credit card worthiness (or the lack of) comes from your credit report.
What does your credit report say? Good question. Good because the question is only in part and part of the answer is knowing there isn't just one report. Actually, there are three. The three major credit reporting bureaus; TransUnion, Equifax and Experian each have their own version. They each collect their own data in their own way and then process that data in their own way. There will nearly always be differences in what they say about you and, also, differences in their priorities. For credit card holders, this matters because they will each deliver their own version of your FICO Score. They all use the same guidelines as defined by Fair Isaac Corporation and then each interpret significance and priorities according to their own guidelines (‘weighting') when they deliver our FICO Score to those who would inquire. Different credit card lenders will choose between these three agencies. Some, only one of them but, some will access all three and select the one in between the extremes. If you are impacted by your score, the lender will inform you which of the three was used in their evaluation.
Since you can't know which one is going to be chosen by any given credit card lender, it's important for you to review all three. They're all free once a year from each of the bureaus. The best way to find out is usually on-line at AnnualCreditReport.com but they can also be requested by phone or mail. The number to call is: (877) 322-8228. When you place the request, make sure to specify you're after the freebee (they usually cost).
Once you get your credit report, the first thing to do is find the inaccuracies (you're almost sure to find some. The consequential ones are the first thing to fix, especially if they're not contested. Next come the disputes. Provide the most succinct and plausible documentation here. If you are ‘fixing' anything in a report, it's best to space your requests from each of the three bureaus apart by a few month to see if your changes have taken effect (you only get one freebee per year from each). The FICO Scores used for credit cards cost about $10 each.