Credit Secrets?
Credit and Credit scores are very mysterious. Mysterious to the point that many people do not pay much attention to their Credit status until it is time to make a purchase. The little (and I stress little) step you take today can pay huge dividends later when you go to purchase that next home, car or appliance, etc.
If you have not looked at your credit recently there are two ways you can do this. Well there are more than two, but the following two are the best. You need to see your reports in a raw form. The best way to do this is to order a hard copy of each report from each Credit Reporting Agency (aka - CRA). Each report will cost approximately $10.00. If you believe you might have a few challenges then this first option is the best.
Let me stress............NEVER USE A FREE REPORT SERVICE.
Free reports make it more difficult to dispute any errors on your reports (this topic will be covered later). The $30.00 you spend for the hard copies will be well worth it if you need to dispute. Additionally DO NOT ORDER YOUR REPORTS FROM ANYONE OTHER THAN TRANSUNION, EQUIFAX & EXPERIAN. Third party company reports will not have many of the details you may need to see in order to optimize your report.
Exception: The only other place place to get your report (s)is a little more expensive (between $45.00 and $50.00 for all three) and that is www.myfico.com. myFICO.com is the only website you can go to and get your REAL FICO SCORES. All the other websites that claim to have your score, have what is affectionately called a FAKO (Pronounced FAKE-O). The Fair Isaac Corporation owns the secret formula for the scores and does not share that with anyone. The formula is closely guarded just like the recipe for Coke and Kentucky Fried Chicken. The score you see on myFICO.com will be the same score that a car dealer will pull or any other lending source.
What is a Trimerge report? A Trimerge report is a report you can order from third party providers which will include all three reports combined into one report. While these reports are helpful, they are not as detailed as the reports recommended above. If you sign up for a credit monitoring service then you will have access to a trimerge report. This is good for monitoring purposes and costs less, but if you need to dispute or work on your credit, the hard copies are a must. The good news is if you dispute items on your report and they are removed, the CRA will send you a new updated copy of your report at no additional charge.
To order you report mail your payment and request to the following companies:
Equifax
PO Box 740241
Atlanta, GA 30374-0241
Currently $8.00
Experian
PO Box 2104
Allen, TX 75013
Currently $9.95
TransUnion
PO Box 2000
Chester, PA 19022-2000
Currently $8.00
You will need to include a copy of your Driver's License if you mail in your request. You may also order over the phone with a credit card.
Also when you request your report you will want to OPT-OUT at the same time. When you opt out you will have your name removed from the mailing lists the CRAs sell to credit card companies and others. You will recieve less junk mail when you opt-out. This option is good for 5 years and must be renewed.
In my next blog post I will cover how Free Credit Reports hurt your ability to dispute errors.
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Thank you for posting. I wonder if you can explain something.
Is the FICO score available to the consumer the same as the score available to a lender? I have heard there is a difference. My recent experience corroborates that.
About a month ago, in preparation to refi my mortgage, I ordered 3 credit reports with scores, for self and spouse, from myfico.com (total cost for 6 scores ~$45). Within a week I had contacted 3 lenders inquiring about mortgage refi. They all reported scores at least 50 points lower than the scores I purchased. When I mentioned to a woman at one lender that I had just received our credit scores, that my spouse's high score was 892, with a middle score of 877, she said the FICO score ranges only go up to 850. Here are the ranges listed on my reports.
Experian 501-990
TransUnion 501-990
Experian 300-850
Additionally, one recent payoff (single payment loan) had not yet posted on credit reports. By the time I got to the 4th report it finally occurred to me to dispute that. I disputed on the last 2 reports. Within a day, those two reports were updated and those scores went up 20 points. My point here is only that if the score differences were based on new credit information, the new information would have been favorable.
The change in the actual numbers that I had vs what lenders had did not make any difference in our loan worthiness. But, I wonder, if the scores I pay for are not what the lender has, why should I bother to purchase scores?
Thank you.