Many people use the terms ATM card and debit card interchangeably, but these aren’t actually the same thing. To understand whether an ATM card is also a debit card, you have to know a bit about the history of these cards and what they’re used for.
We’ve got the details on ATM cards vs. debit cards below. Find out the difference and get answers to some common debit and ATM questions.
What Is the Difference Between ATM and Debit Cards?
ATM and debit cards look quite similar. They resemble credit cards and typically have bars you can swipe. They may also have secure chips. However, they aren’t the same and don’t serve the same purpose.
If the question is which came first, the ATM or debit card, the answer is ATM card. According to a report from the World Economic Forum, the patent for an early cash dispenser was filed back in 1960. ATMs became operational later that decade, along with automated teller machine cards—ATM cards. The first official debit card didn’t debut until 1972. It was called the ATM account debit card from City National Bank of Cleveland.
ATM cards were originally designed to do one thing. Instead of going to the bank to get money, you could take cash out of your checking account via a machine. These machines were connected by regional networks. While the cards were issued by banks, they could be used to withdraw money anywhere there was a machine for a potential fee.
As such, ATM cards are cards that are only used to interact at ATMs. Debit cards, on the other hand, have a wider function.
In the past, ATM networks began looking for new revenue streams. They started creating relationships with retailers and eventually joined forces with the credit card networks to create what we now know as debit cards. Debit cards can be used like credit cards at checkouts in person and online.
Most banks also issue debit cards that can act as ATM cards. However, an ATM-only card can’t act as a debit card. Debit cards have Mastercard or Visa logos on them, indicating which network they run on. ATM cards don’t have these logos.
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Pros and Cons of an ATM Card
Some banks will still issue an ATM-only card if an account holder asks for one. These cards can only be used at automatic teller machines.
Pros of ATM cards include:
You can get cash at any machine, creating flexibility for money management.
You can’t swipe the card to pay for goods and services, which can help reduce impulse purchases.
They may be a good tool to go along with a cash envelope budget system.
The main disadvantage of an ATM card is its limitation. You can’t use it to pay for goods and services. If you don’t have another payment method in your wallet, this can lead to you having to find an ATM and get cash anytime you want to purchase something.
Pros and Cons of a Debit Card
Most checking accounts come with the option for a debit card, and some banks issue one automatically. You can also get prepaid debit cards.
Pros of debit cards include:
Flexibility, as you can use your card at ATMs and pay for goods and services with it anywhere Visa or Mastercard is accepted
You may be able to swipe your debit card as a credit card for added protection
Options for managing your budget, as you can set limits on your debit card or get a prepaid debit card that limits how much you can spend
They’re a common and recognized financial tool that won’t raise eyebrows when you use them
The biggest con of a debit card is that it’s tied to your bank account. This can lead to impulse spending that brings your account balance low, even if you didn’t budget for the spending. You may also find your debit card is limited by daily or individual purchase amounts.
FAQS
Can you use ATM cards at all ATMs?
Yes, you can generally use an ATM card at any automatic teller machine. This means you don’t have to look for an ATM that’s associated with your financial institution.
Are there fees for using different ATM cards at different brand ATMs?
Yes, there are fees for using ATM cards that aren’t associated with your financial institution or bank. Your bank might charge a fee for this activity, and you may also pay a fee to the ATM company.
What happens when an ATM transaction fails?
ATM transactions can fail for a few reasons. When they do, the machine notifies you of the failure and the reason. Some common reasons include:
You don’t have enough money in your account to cover the withdrawal.
The machine experienced a malfunction and couldn’t complete the process.
You entered an incorrect PIN.
Your card couldn’t be read by the ATM reader.
In cases where a technical malfunction or incorrect PIN entry caused the transaction to fail, you may be able to try again.
Are there any limits to how much can be withdrawn with debit and ATM cards?
Yes, banks set limitations on how much can be withdrawn with debit and ATM cards. There may be a limitation on how much you can withdraw in a single transaction. Daily limitations also usually exist. For example, your bank may only allow you to withdraw $300 at a time or $1,000 in a single day. No standards exist for these limitations—each financial institution decides for itself.
Which Is Right for You?
Ultimately, you have to decide whether an ATM or debit card is right for you. Take into account your own budget and the way you spend money. You should also consider what financial habits you need support for and which type of card would help.
You can get an apartment with bad credit, but it may take some strategizing. Apartment applicants with low credit scores can boost their odds by applying with a cosigner, paying more upfront, offering references, or changing the type of units they apply to.
In today’s housing market, you want every possible advantage on a rental application. While letters of recommendation and a solid rental history will get you far, more and more landlords want a high credit score. As a result, it isn’t uncommon to ask if you can get an apartment with bad credit.
While it takes some strategizing, you can get an apartment with low credit. To help you along, we’ll explain how credit impacts your application, explain steps you can take to compensate for low credit, and share tips on boosting your score.
How Credit Impacts Getting Approved for an Apartment
Many landlords and renters run a credit check as part of their rental application process. Like lenders, landlords check your credit to see if you can pay your bills on time. Because renting is an investment, property owners want to minimize risk. So, they assume tenants with high credit are more likely to pay their bills on time.
Remember that your credit score isn’t the only factor on a rental application. While a high score helps, the details on your credit report matter, too. How you got a high or low score can sway property managers one way or the other.
What Credit Score Do You Need to Rent an Apartment?
The score you need depends on the unit. Some rental companies provide an ideal range for their listings. A score of 620 or higher will generally keep landlords from denying your rental application. However, some landlords will expect more, while others don’t look at your score at all.
What Do Landlords Look for on a Credit Report?
Renters may treat your credit score like a headline, but there’s more to a credit report than a number. Credit reports tell a story about your spending habits and income. To help landlords pick reliable tenants, a rental credit check includes:
Rental history: Some landlords report rent payments to credit bureaus. As a result, evictions, broken leases, and late or missing payments may appear.
Employment history: Current or past employers may show up on a credit report. Typically, they only appear if you listed them on a credit card application or loan.
Payment history: Credit reports show your history of payments to lenders. Late or missing payments will lower your score and work against your rental application.
Debts: Current and past debts show up on your credit report. By providing payslips, landlords can calculate your debt-to-income ratio. If you make enough to repay your debts responsibly, that improves your application.
Delinquent or collections accounts: An account is delinquent if you miss a payment due date. If you miss enough payments for lenders to transfer your account to a collection agency or sell it to a debt buyer, it becomes a collections account. Both of these hurt your credit score.
Bankruptcy status: Bankruptcy filings will affect your credit score. Landlords may take recent bankruptcies as a sign that you’re a high-risk tenant.
Derogatory remarks: These remarks refer to negative items on your credit report. They include auto repossessions or foreclosures. They hurt your score and hamper a rental application.
Landlords gauge the risk they pose by looking at how applicants spend their money. Someone with a high income but a history of late payments may not make the cut. On the other hand, someone who filed for bankruptcy years ago may be more responsible now.
How to Get an Apartment with Bad Credit
While a low score sets you back, you can learn how to get approved for an apartment with low credit. By following these methods, you can get a leg up in rental applications:
Make an Upfront Payment
Putting down more money upfront can give you an edge on rental applications. Landlords will usually request a security deposit or the first and last month’s rent upfront. To sway a landlord’s opinion, offer the first three months’ rent or put down a higher security deposit.
At the end of the day, renting is an investment. If you can show your landlord that you’ll give them a reliable ROI, it’s all the more likely they’ll accept you. As a bonus, paying more in advance saves you a financial burden for the next few months.
Find a Guarantor or Cosigner for Your Apartment
If a landlord can’t trust you to make payments, you can get someone to sign your lease with you. Someone with a great credit score who signs on with you can assuage a property manager’s worries. However, remember that the person who helps you takes on financial risk. You have two options for this approach:
Cosignerssign a rental agreement with you and share the financial responsibility for it. They must do so on your behalf if you can’t or won’t pay rent.
Guarantors share cosigners’ responsibilities, but they have fewer rights. More specifically, they vouch for you and can make payments on your behalf. However, they aren’t entitled to reside in your unit.
Offer References and Supporting Documents
While credit reports outline your financial history, you aren’t the sum of your spending decisions. You can offer other documents to show your responsibility in an apartment application. Additionally, these documents can prove you can pay rent each month. Some examples of supporting documents include:
Payslips: Offer pay stubs that show you make enough money to pay rent each month.
Letters of recommendation: Reference letters from a friend or employer can attest to your character and responsibility.
Proof of reliable rental history: Account statements and landlord testimonials can prove you always pay rent on time.
A snapshot of your savings account: If all else fails, you can show landlords you have the money to make rent. Be sure to censor sensitive information on your snapshot.
Utility payments: A history of on-time utility payments shows your trustworthiness.
Find Apartments to Rent with No Credit Check
While credit checks are common, not all landlords require one. While these properties aren’t the most competitive, that isn’t always a problem. Apartments with no credit check tend to cost less than ones with one.
If you’re looking for another option, some landlords advertise units with low credit requirements. Again, these properties set a low credit requirement for a reason. That said, if you inspect the unit and it looks good, this route can save you a headache. As you live in low-credit apartments, you can build your score for future applications.
Adjust Your Expectations
If you can’t get around a credit check, reassess the kinds of apartments you can apply for. This isn’t to say you should only apply to units in poor condition. Instead, consider what you’re willing to compromise on. You may have an easier time qualifying for an apartment:
Farther away from your work or downtown area
Without amenities like a gym or pool
That doesn’t include parking
With less square footage than you’d prefer
If you apply with a roommate
Bear in mind that compromising on these points means the apartment may cost less. While living in a less-than-ideal unit, you can save and rebuild your credit while renting. When it comes time to look for a new apartment, you’ll have better odds of getting the one you want.
Tips to Raise Your Credit Before Renting an Apartment
If you plan to send rental applications down the line, you should work to improve your credit. Bear in mind that increasing your credit score takes time. To see a major change, expect months or even a year of work. In that time, follow these tips to improve your credit:
Pay Your Bills on Time
A person’s payment history can make or break their credit score. Central to that payment history: whether you paid your bills on time. Making timely and consistent payments plays a big role in improving your credit score. On top of that, timely payments prove your reliability to a landlord, boosting your chance of getting approved.
Pay Down Any Debt
Paying down debts is one of the best ways to improve your credit score. For this reason, someone who takes on and pays off debt won’t get punished for the debt they take on. Paying off debts shows your fiscal responsibility and proves your finances are on an upward trajectory.
Paying off any kind of debt can improve your score. The main ones to look out for include:
Credit card debt
Student loans
Medical debt
Auto loans
Become an Authorized User for Credit Piggybacking
If you don’t have the resources to boost your credit alone, you can try credit piggybacking. Credit piggybacking lets you benefit from a friend or family member who pays down their debts. By becoming an authorized user on their account, your credit report reflects their payoffs.
You can break the process into a few steps:
Find a friend or family member you trust to spend responsibly.
Become an authorized user on one of their credit cards or lines of credit.
As they pay down their debts, this will show up on your credit report.
By piggybacking on their credit payoffs, your score will improve.
Dispute Credit Report Errors
Sometimes, a low credit score isn’t your fault. Credit reporting errors can come from major credit reporting agencies or the companies giving them information. Credit reporting errors aren’t uncommon, so you should review your report for issues.
Credit reports may contain errors related to:
Accounts held by another person with a similar name to you
Accounts opened by fraudsters who committed identity theft
Closed accounts that still read as open
Accounts incorrectly labeled as delinquent or in collections
Payments that don’t get reflected in your report
Multiple listings of the same debt
Accounts with inaccurate balances or credit limits
To dispute credit report errors, contact the credit bureaus and the company that reported inaccurate information to them. You want to provide supporting documentation that proves the report contains errors. While you can send a dispute by phone, this doesn’t leave a paper trail. Instead, mail a dispute letter or use an online form.
FAQs on Renting an Apartment with Bad Credit
You may still have questions about getting approved for an apartment. To help you out, we’ve answered FAQs on renting apartments with bad credit.
Is 500 a High Enough Credit Score for an Apartment?
You can rent an apartment with a credit score of 500. While it might take you out of the running for expensive units, you should still have a good chance of renting:
Apartments with low credit requirements
Apartments with no credit requirements
Apartments you apply to with a cosigner or roommate.
Can I Reapply for an Apartment After I Get Denied for Bad Credit?
You can apply for the same apartment after getting denied on your first attempt. That said, some renters may throw out your application or ignore it. If you reapply, try to improve your credit and finances between applications.
Do Landlords Need Permission to Run a Credit Check?
Landlords need your permission to run a credit check. The Fair Credit Reporting Act calls rental applications a “permissible purpose.” This gives them the right to view your credit. However, that doesn’t mean landlords can check your score without your consent.
Improve Your Credit for an Apartment with Credit.com
Managing apartment applications is hard enough, even without a low credit score. However, you can get an apartment with bad credit by following the right steps. You’ll see more housing opportunities by learning how credit works, reviewing strategies for getting an apartment with low credit, and following tips to boost your score.
If you’d like a way to streamline raising your credit for rental applications, Credit.com can help. Our rent and utility reporting services ensure that your on-time payment gets reflected on your report. Even if your landlord doesn’t report payments, our tool helps build your credit with every rent payment reported.
Residential Funding Co., a unit of GMAC’s real estate unit ResCap, is reportedly suing a number of mortgage brokers it worked with who originated so-called bad loans.
According to a report from the Minneapolis Star Tribune, the mortgage lender has already filed more than a dozen federal lawsuits against companies nationwide that allegedly misrepresented borrower information on now non-performing loans.
Additionally, the suits claim that the defendants failed to do their due diligence on borrowers they represented, seemingly allowing their customers to acquire loans that were more likely to fail than their credit risk implied.
The Bloomington-based company is calling on the alleged fraudsters nationwide to buy back the soured loans, which range in size from $21,000 to more than $1 million.
While this article may make it appear as if mortgage lenders are the unknowing victims of “mortgage fraud”, it should be noted that many of the loan officers and underwriters at these large companies often facilitate and perpetuate the problem.
In fact, driven under immense pressure to perform and hit monthly sales figures, many sales associates and accompanying sales managers at these nationwide lenders are often encouraged to “make the loan work,” despite any warning signs that may appear along the way.
It’ll be interesting to see if the lawsuits are successful, given the fact that borrower misrepresentation seemed rampant at nearly every step of the loan process, even on Wall Street.
Guaranteed Rate’s PowerVP mobile app aims to enhance loan originators’ ability to keep in constant contact with customers anywhere, at any given time — 24/7.
The PowerVP app will create new loans; invite customers to complete a digital mortgage; send a one-click conditional approval letter; lock in rates; obtain real-time pricing and run a credit report, the company said in a release.
“It’s now entirely possible for us to qualify buyers for their dream home by the time they leave the open house. Agents submitting an offer at 8:30pm? Our sales team can get the pre-approval out at 8:35, away from their desks, all within this robust tool that will help them hustle smarter for our partners and deliver contract winning speed to our amazing customers,” Guaranteed Rate’s president & CEO Victor Ciardelli, said in a prepared statement.
The Chicago, Illinois-headquartered lender has more than 850 branches across the country and is licensed in 50 states and Washington, D.C.
The lender originated $10.6 billion in the second quarter, up from the previous quarter’s $7 billion — totaling $17.6 billion in the first six months of 2023, according to data from Inside Mortgage Finance.
Production volume in the first half of this year was down about 47% from the same period in 2022. As of June 2023, Guaranteed Rate had a 2.5% market share, IMF data showed.
In a shrinking mortgage market, the lender had two layoffs in August that affected tech staff as well as non-tech workers including loan originators, former employees who were affected told HousingWire.
The company had 2,149 sponsored LOs as of Thursday, according to the National Multistate Licensing System (NMLS).
Recent products launched by Guaranteed Rate include a down payment assistance program in July. G-Rate will provide 2% of the required 3% minimum down payment for a conventional loan or up to $2,000 — whichever is lower.
Whether you’re a parent proudly financing higher education for your child or a student signing on the dotted line for your own student loans, it’s important to understand how those debts can impact your future. Do parent PLUS loans affect getting a mortgage, for example? The short answer? Yes, any student loan you’re responsible for can impact your chances of getting approved for a mortgage. Find out more below.
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Do Student Loans Impact Getting a Mortgage?
Student loans are a type of debt. So if they’re in your name, they can impact your chance of getting a mortgage in the future. Luckily they can have a positive impact in some situations, especially if you have good financial habits.
It’s important to note that student loans only impact your ability to get a house if you’re the one who’s responsible for paying the loan. Parent PLUS loans affect getting a mortgage if you’re the parent who’s signed as the responsible party, for example, but they wouldn’t impact your child’s chances at a mortgage.
But if a student took out a loan with the parent as a cosigner, the loan impacts both people’s credit. It might impact the chances of getting a mortgage for either party.
How Do Student Loans Impact Your Ability To Get a Mortgage?
Student loans are often pretty hefty. The average cost of attending a four-year college or university is $35,331, so you’re looking at total loans that are tens of thousands of dollars. That’s nothing to scoff at, nor is it a small mark on your credit report. Find out how it impacts your mortgage application below.
Student Loans Reduce How Much You Can Save for a Down Payment
You may not have to start paying back your student loans until you’re out of college or a forbearance period has passed. But the time will come when you’ll need to make those monthly payments. Depending on how much you borrowed and what your terms were, student loan payments can be a big hit to your monthly budget.
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That hit makes it harder to save money quickly for a down payment. While options do exist for mortgage loans with a lower down payment or even no down payment, not being able to save limits your choices.
Mitigate this impact by:
Asking your mortgage broker for information about options with low down payment requirements.
Applying for down payment assistance to help you cover the costs of down payments.
Working to increase your income so you can save more money.
Keeping other types of debts and expenses low to facilitate savings.
They Increase Your Debt-to-Income Ratio
Any amount of debt you have to pay back increases your debt-to-income ratio (DTI). Mortgage lenders look at DTI to understand whether you can afford the payments on any loan you take out.
There’s not a single hard-and-fast rule for where your DTI needs to be to get a mortgage, but the Consumer Financial Protection Bureau notes that 43% is a good number to consider. That means your total debt payments monthly, including any prospective mortgage, should be no more than 43% of your total monthly income. Some lending programs may have stricter DTI requirements.
Here’s an example to demonstrate how a student loan can change DTI. If you have student loan payments of $500 a month, a car loan of $500 a month and credit card payments totaling $300 per month, you have $1,300 in debt. If you want to get a loan to pay for a home and the loan would result in a $1,200 a month mortgage, that’s a total of $2,500 per month.
If you only make $5,000 a month, your debt-to-income ratio would be 50%. That may be too high for a favorable mortgage loan to be approved. If you take out the student loan and keep all the other factors the same and the DTI is now 40%. That’s a better DTI for most mortgage loans.
Offset the impact of student loans by reducing your other debts. For example, in the above example, you could work to pay off the credit card debt before you apply for a mortgage. You might also refinance the car loan, bringing your monthly payment down to $300. That would leave you with a 40% DTI.
Student Loans Impact Your Credit Score
Most lenders do report student loans to one or more of the credit bureaus. This is actually good news, because paying your student loans on time can help you build credit and have a positive impact on your credit score. On the flip side, if you miss payments or end up defaulting on your student loans, the negative impact on your credit can bring your score down and keep you from getting approved for a mortgage.
Keep this from being a problem by paying your student loans on time every month. Consider setting up auto bill pay so you don’t have to worry about accidentally missing a payment. You may also want to find out more about the required credit score to buy a house so you know what you’re shooting for.
Does Applying with FAFSA Effect Buying a House?
No, completing FAFSA doesn’t impact your credit at all. And it doesn’t mean you’re taking out a student loan. FAFSA simply lets you apply for any potential student financial aid that might be available for you. You’re then offered aid that you can choose from.
More Tips for Ensuring a Successful Mortgage Application
Doing a bit of homework before you apply for a mortgage can increase your chances of success. Here are some things to do related to your student loans:
Consolidate multiple student loans into one if possible, which will reduce the total amount you have to pay each month. This makes it easier to save and can reduce your DTI.
If student loans report as deferred on your credit report, get the specific payment amounts from the servicer or a payment letter from the servicer stating an approximation of what the payments will be when they come due and payable.
Avoid any student loan delinquencies, especially in the last 12 months. Ignoring this could result in your application being denied for a government loan such as an FHA- or VA-backed mortgage. Government programs are strict about delinquencies on federal debt, which is what a student loan is.
If any student loans are paid in full but your credit report shows a current payment obligation, provide supporting documentation showing it’s been fully paid off to the mortgage company.
Review your credit reports before you start the mortgage application process. If there are inaccuracies on your credit reports related to student loans—or anything else—file a dispute and request the credit bureau to investigate and correct the information.
Learn More About Mortgages Today
It’s also a good idea to learn more about how a mortgage works and read up on terms you need to know in a mortgage glossary. The more you know, the more confident you’ll be in the entire process. For the best information on your credit, consider signing up for ExtraCredit, where you can get 28 of your FICO scores and a report card that helps you understand what you need to do to improve your scores.
Falling behind on your debt can be frightening. You may wonder if the creditor will come for your property or sue you. Sometimes, you don’t even realize you owe a debt before a credit collection service comes calling. But you do have rights and options. Get some tips for negotiating with creditors below.
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1. Determine Whether Negotiation Is the Right Move
Settling your debt isn’t always the right move. If you can pay your debt off quickly without settling, it may be better for your credit. On the flip side, the debt will cost you more money.
Consider the big picture of your personal finances to figure out whether you should just pay off your debt fast or negotiate for more time or a lower payment requirement.
2. Make Sure the Debt Is Yours
While you’re thinking about whether debt negotiation is right for you, take some time to validate the debt. Mistakes happen—and so does fraud. It’s possible you didn’t originate the debt yourself, and if that’s the case, you can dispute it.
While validating the debt, you should also check that it falls in the statute of limitations. If debt falls outside the statute, collectors can’t continue to collect it and the creditor can’t sue you for the debt.
3. Don’t Negotiate Without Knowing What You Can Afford
If you decide to settle a debt, figure out what you can afford. Sit down and go through your finances with a fine-tooth comb. What do you really need to spend money on every month, and what can you kick to the curb? Go to the negotiating table with a firm figure in mind. Keep in mind that lump-sum settlements generally cost less in total than monthly repayment plans.
4. Understand Your Rights
Under the terms of the federal Fair Debt Collection Practices Act (FDCPA), creditors and debt collectors aren’t legally allowed to:
You also have a right to information about your debt, such as the name of the original creditor and how much you owe. Knowing your rights helps you protect yourself throughout the negotiation process.
5. Keep Your Story Straight
Falling behind on debt often happens because of serious life factors, but reps at credit collection services or lenders aren’t counselors. They’re just employees trying to do a job.
Give a condensed version of why you can’t pay your debt as agreed, and avoid drama. If you’re in a difficult situation, make that clear, and tell your lender what you’re trying to do to get back on track.
Before you talk with your creditor, it might help to write down and rehearse a few go-to sentences. This can make the discussion less emotional, making sure you’re better able to discuss the details and stand up for your rights.
Whatever you do, tell the truth. It’s much easier to keep the truth straight, and you’ll feel better if you don’t tell tales.
6. Ask Questions
Don’t be afraid to ask questions. You have a right to know where the debt came from, how the total amount owed was calculated and what fees might be included.
7. Take Notes
Talking about debt can be stressful and overwhelming. Keep a pen and paper handy so you can take written notes whenever you communicate with a debt collector. Make sure you write down the full name of the person you spoke to, the time of the call, how long the call went on and what you spoke about. You should also jot down any of the bad behaviors we mentioned above if they occur to create a written record of potentially illegal collection practices.
8. Read and Save Your Mail
It can be tempting to throw bills in the trash, but don’t do it. Instead, open them, read them and face your debt head-on. If a debt looks familiar, put the bill in a file and think about how you’d like to settle or discharge the amount. If you don’t remember accruing the debt, ask the lender for proof that you owe it.
9. Talk to Creditors, Not Collection Agencies
Try to negotiate with your original creditors before they sell your debts. Taking the bull by the horns at this stage could help you keep a few points on your credit score. Your original creditor may also have programs that can help you get back on track with payments.
10. Get Any Agreement in Writing
Get any settlement or repayment plan in writing as soon as possible once you conclude negotiations. Don’t pay any money before you see the agreement in black and white. If you pay before receiving confirmation, you might have trouble later on. Some unfortunate consumers end up getting chased twice for the same debt.
11. Stay Friendly
Debt is a nerve-wracking topic. It’s easy to get emotional when talking to creditors and debt collectors, but try to be friendly and stay on topic. Remember—debt collectors can’t come into your home and confront you, and they can’t take the resources you need to live away from you. If they start making such threats, end the conversation and report them instead of getting heated and angry.
12. Put the Past Behind You
Once you settle a debt, prepare to move into the future as positively as possible. Continue making your other payments on time to avoid this issue in the future. And keep an eye on your credit reports to ensure these old debts don’t crop up again via new collections accounts. Save all the records of your debt settlement so you can prove you don’t owe the money if that does happen.
The Fannie Mae Flex Modification Program (FMP) is a mortgage assistance solution designed to relieve borrowers facing financial hardship.
Are you looking to improve your mortgage management but don’t know where to start? Handling mortgage payments is challenging, especially if you’re facing economic difficulties and don’t know where or how to get financial assistance. The Fannie Mae and Freddie Mac Flex Modification Program may be the solution you’re looking for.
Learn what you need to know about the Flex Modification Program: how it works, who qualifies for it, and how you can apply. This comprehensive guide will help you understand the many benefits of FMP for a more stable financial future.
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What Is the Flex Modification Program?
The Fannie Mae Flex Modification program is a mortgage assistance solution designed to relieve borrowers facing financial hardship. This program offers a flexible framework for loans that helps eligible borrowers to modify their monthly mortgage payments and avoid foreclosure.
Modifying the loan terms can make mortgage payments more affordable and sustainable for struggling homeowners.
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How Do Fannie Mae and Freddie Mac Work?
The mortgage market has a few essential entities, including the government-sponsored enterprises called Fannie Mae and Freddie Mac. Their approach allows lenders to free up funds to provide more mortgage loans to borrowers.
But how does it work? Fannie Mae and Freddie Mac helped make mortgages more accessible by buying them from lenders. This allows lenders to have more money available to provide new mortgages to borrowers or invest in other financial opportunities. For example, if a lender originates a mortgage, they can sell it to Fannie Mae or Freddie Mac, who then include it in their portfolio or package it into mortgage-backed securities.
How Flex Modification Works
The Flex Modification Program offers loan modifications to eligible borrowers experiencing financial hardship. Here’s a breakdown of how the program operates:
Eligibility Requirements:
You must have a mortgage loan owned or guaranteed by Fannie Mae or Freddie Mac.
The mortgage loan must be at least 60 days delinquent or at risk of imminent default.
You must demonstrate a hardship that affects your ability to make timely mortgage payments.
Modification Terms:
The program aims to reduce your monthly mortgage payment to 20% or more below your pre-modification.
The modification may involve adjusting the interest rate, extending the loan term, or forbearing a principal portion.
The goal is to make the mortgage payment more affordable while ensuring it’s sustainable for you.
Application Process:
Apply to the Flex Modification Program through a loan servicer.
The loan servicer will assess your eligibility and collect the necessary documentation.
Once approved, the loan servicer will work with you to finalize the modification terms.
Why Should You Consider the Flex Modification Program?
Before considering the Flex Modification Program, it’s essential to understand its potential pros and cons.
Pros:
Lower monthly payments: The program aims to reduce your mortgage payment to a more affordable level, making it easier to manage your finances on time.
Protection from foreclosure: By modifying your loan, the program can help you avoid the devastating consequences of foreclosure.
Improved financial stability: By participating in the Flex Modification Program, you can regain control of your financial situation. Providing you with a sense of stability and peace of mind, allowing you to focus on rebuilding your financial health.
Simplified application process: Applying for the program is relatively straightforward, and you can work directly with your loan servicer to navigate the process.
Potential principal reduction: The FMP may offer this, which means that a portion of the outstanding loan balance could be forgiven or deferred, reducing the overall amount owed. This can be particularly beneficial if you owe more on the mortgage than your current property value.
Preservation of homeownership: One of the primary goals of the FMP is to help borrowers preserve their homeownership. The program offers a viable alternative to foreclosure by providing a framework for loan modifications.
Cons:
Extended loan term: Modifying your loan may result in a more extended repayment period, meaning you’ll make mortgage payments for longer.
Impact on credit score: While participating in the program doesn’t directly affect your credit score, the delinquency prior to modification might be reported on your credit report.
Limited availability: The program is specifically for Fannie Mae or Freddie Mac borrowers with owned or guaranteed loans. You won’t qualify for this program if either entity doesn’t back your loan. However, other programs may exist. Contact your lender if you’re struggling to make your mortgage payments.
Remember, these pros and cons will vary based on your circumstances. It’s essential to consult with your loan servicer and thoroughly review the modification terms to understand the potential benefits you may receive from participating in the program.
Who Qualifies for the Flex Modification Program?
The Flex Modification Program is designed for borrowers struggling with mortgage payments due to financial hardship.
To qualify for the program, you must meet the following criteria:
Loan ownership: The mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac.
Delinquency or imminent default: Borrowers must be at least 60 days delinquent on their mortgage payments or at risk of imminent default.
Demonstrated hardship: Borrowers need to demonstrate a hardship that affects their ability to make timely mortgage payments. Hardships may include job loss, income reduction, medical expenses, divorce, or other significant life events.
Additionally, you must comprehend what a “hardship” entails to be considered for a loan modification. Each situation is evaluated individually, but common examples of hardships include loss of income, disability, serious illness, divorce, or the death of a co-borrower.
How to Apply for the FMP
If you believe you meet the eligibility requirements for the Flex Modification Program, you can follow these steps and tips to apply:
Gather documentation: Prepare the necessary documents, such as proof of income, bank statements, tax returns, and any other documentation required by your loan servicer.
Contact your loan servicer: Inform your loan servicer about your interest in the Flex Modification Program.
Complete application forms: Your loan servicer will provide the necessary forms and guidance to complete the application process.
Submit documentation: Submit all the required documentation and the completed application forms to your loan servicer.
Follow up and provide additional information: Be proactive in promptly following up with your loan servicer and providing any additional information they request.
Review and accept the modification terms: Once your loan servicer evaluates your application, they will provide you with the proposed modification terms. Review them carefully and, if acceptable, sign and return the necessary paperwork to proceed with the modification.
Remember, each loan servicer may have a specific application process, so it’s crucial to communicate directly with them to ensure you have all the necessary information and are following the correct steps. Having to redo the application process due to easily-avoided mistakes is the last thing you need.
Other Mortgage Payment Help Options
What if I don’t qualify? What can I do? Other mortgage payment assistance options are available if the FMP is not the right fit.
Fannie Mae and Freddie Mac offer additional programs catering to different circumstances. Some of these options include:
Home Affordable Modification Program (HAMP): This aims to help homebuyers struggling with financial hardship and mortgage payments.
Repayment plan: Allows you to catch up on missed mortgage payments by adding a portion of the past-due amount to your regular expenditures over an agreed-upon period.
Forbearance: Temporarily suspends or reduces your mortgage payments with this program. It can be for a specific period, providing short-term relief during financial difficulties, so you can reassess the situation.
But before you move forward with one of these, it’s essential to analyze your alternatives and consult with your loan servicer to determine the best course of action based on your specific circumstances.
FAQs
Let’s address some frequently asked questions about the Flex Modification Program:
Does the Flex Modification Program Affect Your Credit Score?
Participating in the Flex Modification Program doesn’t directly impact your credit score. However, the delinquency prior to modification might be reported on your credit report
What if Fannie Mae or Freddie Mac Doesn’t Own My Loan?
If your loan isn’t owned or guaranteed by Fannie Mae or Freddie Mac, you won’t be eligible for the Flex Modification Program. However, you should contact your loan servicer to inquire about other available mortgage assistance options or loan modification programs specific to your loan type.
How Long Does the Flex Modification Program Last?
The duration of the Flex Modification Program varies depending on the specific terms of the modification. Typically, the program aims to provide long-term mortgage relief by modifying the loan terms to make payments more affordable and sustainable for the borrower.
The revised terms may involve extending the loan term or adjusting the interest rate. It’s important to discuss the duration of the modification with your loan servicer, as it will depend on your circumstances and the terms agreed upon.
Can I Qualify for the Flex Modification Program if I’ve Previously Received a Loan Modification?
If you have previously received a loan modification, you may still be eligible for the Flex Modification Program. However, the specific requirements and eligibility criteria may change depending on your previous modification and the current guidelines set by Fannie Mae and Freddie Mac.
It’s crucial to communicate with your loan servicer and provide them with all the necessary information regarding your previous modification. They will assess your eligibility based on your unique circumstances and guide you through the application process.
Remember, these answers are general guidelines, and you must consult with your loan servicer to get accurate and personalized information based on your situation.
What Are the Next Steps?
The Fannie Mae Flex Modification Program provides borrowers with a potential lifeline during financial hardship. It aims to make mortgage payments more manageable and sustainable by offering loan modifications. If you’re facing challenges with your mortgage payments, exploring the Flex Modification Program and other mortgage payment help options can help you find the assistance you need.
To take control of your mortgage management and improve your financial well-being. Consult with your loan servicer for accurate and personalized information based on your situation, and research different mortgage rates to make informed financial decisions.
Car insurance can be confusing. First, there are all the policy considerations: Do you want a policy with comp and collision? How much liability should you carry? Do you need uninsured motorist coverage? Even once you make decisions on all these things, the bill that arrives can be difficult to understand—exactly what goes into the pricing for your car insurance premium? Here’s what car insurance companies don’t want you to know about premium pricing.
Your car insurance may not be tied to the driver.
The type of car you drive matters.
Prior claims and questions raise rates.
You can check your report for errors.
Your credit score impacts your car insurance costs.
Where you live impacts your premium account.
Your age affects your car insurance premium.
Gender, marital status, job and education level can affect premiums.
If you bought your car with a loan, your premium may be higher.
You can lower your insurance rates.
You have options if insurance denies your claim.
Is Car Insurance Tied to Car or Driver?
Technically, car insurance is tied to the car. That means if you let someone else drive your car, your insurance may kick in if there is an accident. Not all insurance policies cover all uses of your vehicle, though, so read the fine print on yours before you allow someone else to drive it. You may also be able to exclude drivers who live with you from your policy if you don’t ever want them driving your car and don’t want them impacting the cost of your policy.
>> Find Car Insurance Quotes.
Does It Matter What Kind of Car You Drive?
The total value of your car, what type of vehicle it is and what type of safety rating it has all factor into the cost of your policy. Other factors can include how many miles you drive each year, where you park your car, and how many expensive extra features your car has.
Does Your Driving Record Affect Your Insurance?
Every claim you make—and even if you ask an insurance agent about making a claim—gets entered into a database that your current and future insurance carriers can access. If you have had any recent accidents or traffic violations, you may be more expensive to insure than someone with a clean driving record. If you’ve made any recent claims, your insurance premiums will likely go up. And if you shop around for a new company, they’ll have access to your records and will take your driving record into consideration.
Can You Check Your Insurance Reports?
Your insurance companies share information with two databases: the Comprehensive Loss Underwriting Exchange (CLUE) and the Automated Property Loss Underwriting System (A-PLUS). These databases are run by outside agencies—LexisNexis runs CLUE and Verisk Analytics runs A-PLUS—and any claims you make stay in your report for five to seven years, depending on the database.
The Fair Credit Reporting Act entitles you to one free copy of your report every 12 months. You can dispute inaccurate or incomplete information on your report. You are also entitled to notice about any negative decisions based on information in your report. Requesting your reports does not affect your credit score.
Request your CLUE report from LexisNexis online or call 866-312-8076.
Request your A-PLUS report from Verisk by calling 800-627-3487.
Does Credit Score Impact Your Car Insurance Cost?
In most states, your credit score can impact the cost of your car insurance. The only states that don’t allow car insurance companies to use credit score as a factor in pricing are California, Massachusetts and Hawaii. Statistical studies from the Federal Trade Commission and other research organizations show a correlation between credit score and how much a person is likely to cost a car insurance company. In short, someone with a poor credit score is seen as a greater risk, so the insurance company may charge more for the insurance to help cover expenses related to future claims.
Does Where You Live Impact Your Premium Amount?
Where you live can impact your car insurance cost. In 2018, for example, the average car insurance premium in Michigan was 64% higher than the national average. Other states with car insurance premium averages on the high end included Louisiana, Florida, Rhode Island and Connecticut. States with the least expensive average car insurance premiums included Vermont, Ohio, Virginia, Idaho and Iowa.
Does Age Impact Your Premium?
When it comes to what car insurance companies don’t want you to know, this one isn’t super secret. Age does impact your premiums, with the youngest and oldest drivers typically paying the most on average.
The youngest drivers pay the most for insurance. Premiums are highest at the age of 18 and decline steadily until the driver turns 25. In the eyes of carriers, drivers then enter adulthood, during which time premiums stay pretty flat for the next 30 years or so, until the age 55. Premiums inch up slowly between ages 55 and 65 before jumping way up around the age of 75.
In addition to your age, your gender, marital status, education level and even your job can affect your insurance rates.
If You Bought Your Car Via a Loan, Is Your Insurance Cost Higher?
If you don’t own your vehicle outright, then you may pay more to insure it. If you own a vehicle outright, you’re only required to carry liability on it. Liability is the part of your insurance policy that kicks in to cover damage caused to other people’s cars or property in an accident you’re at fault in.
When you have a loan, the bank is concerned about protecting its investment. That means it may require you to carry comp and collision as well. This is the part of an auto policy that covers damage to your car in an accident you’re at fault in. A policy with this added coverage is more expensive than one without it.
How Can You Lower Your Car Insurance Costs?
No matter your age, gender, or location, you can potentially lower your car insurance via a variety of methods. Here are some tips your car insurance company doesn’t want you to know to put into action to save on premiums.
Drive carefully. Not only does driving carefully help you avoid rate-raising accidents, but many companies also provide good driver bonuses when you haven’t had an accident or filed any claims for a certain amount of time.
Pay your bills on time. Paying your bills on time goes a long way toward improving your credit score, which can improve your rate depending on where you live. Paying your bills on time also demonstrates trustworthiness to your insurance company, which means you may be able to negotiate for a lower rate.
Ask for discounts. When it comes to your insurance rates, it doesn’t pay to be shy. Ask your insurance company about discounts, including multi-driver or multi-car discounts, good student discounts or safe driver discounts. You may be able to score a large portion off your premium because you’re a good student or you follow all the traffic laws.
Review your credit report. Know what’s on your credit report and what you can do to drive up your score. Once you’ve improved your score, ask for a new quote for car insurance.
>> Need to review your credit report? Sign up for the free Credit Report Card.
Consider a higher deductible. Look carefully at your coverage and consider whether you can tweak anything in your policy. If you can afford to cover $2,000 in damages if you get in an accident, consider changing your deductible from $500 to $2,000 to save on your monthly premium.
Shop around for a better rate with other insurance companies. The insurance market is highly competitive, and you may find a better rate with an online company or through a broker that works with multiple companies. If you find a better rate, go back to your current company to see if they’ll match or beat the offer.
Choose your next vehicle carefully. Because the type of car you drive affects your insurance rates, do your research before your next purchase. Look for a car with plenty of safety features (but without too many other bells and whistles) that will get you a lower rate.
What Happens When Car Insurance Denies a Claim?
Of course, you don’t just pay for car insurance for the fun of it. If you get into an accident, you expect the insurance to step in and help cover the expenses. If your insurance company denies your claim, you have some options for appealing the claim.
Contact the insurer. After you’ve reviewed your claim denial, reach out to the insurance company directly. You may be able to explain your claim better or gather additional information to help you understand the reason for the denial.
File an official appeal. Most insurance companies will have an appeals process clearly set out online. You’ll want to write a clear, direct letter that explains why the evidence you originally gathered and submitted with your claim contradicts the insurance company’s decision to deny the claim.
Talk to a legal professional. If you feel that your insurance company is denying your claim in bad faith, talk to a legal professional about your options.
Bringing Down the Total Cost of Car Ownership
Car ownership is expensive. Make sure you pay attention to all the potential expenses to get the best possible deal overall—and don’t forget to shop around for the best rates before locking yourself in.
Identity thieves are almost always opportunistic—but the crimes they commit feel very personal. Unauthorized credit card charges, bogus loan applications, missing money, and other financial violations make fraud a major nightmare. To keep fraud in check, you need to know how to check your credit report for identity theft, and how to deal with problems when they arise.
In this post, we’ll talk about the warning signs of identity theft—and then we’ll show you how to stamp out fraud before it starts.
Warning Signs of Identity Theft
How Do I Check My Credit for Identity Theft?
To avoid falling victim to identity theft, examine your credit report regularly. You can access a free copy of your credit report from all three bureaus—Equifax, Experian, and TransUnion—once a year. (Through April 2022, you can get free weekly copies of your reports.) You can also use a tool like Credit.com’s Credit Report Card or ExtraCredit to monitor your credit.
When you download your credit report with ExtraCredit, you’ll see a list of positive accounts, late accounts, collections, public records, inquiries and account balances. Your credit report contains a lot of information about you and about your financial habits, and if that information changes unexpectedly, it can indicate identity theft. Here are five of the biggest fraud warning signs to watch out for.
Warning Sign 1: Incorrect Personal Information
Sometimes, incorrect personal information is the result of an innocent mistake. Other times, it means something sinister is going on. If you see your name misspelled, a wrong phone number or address, or an incorrect Social Security number on your credit report, investigate immediately.
I just watched a documentary on the dark web, and I will never feel safe using my credit card again!
Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.
I need that peace of mind in my life. What else do you get with ExtraCredit?
It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.
It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.
…we live in Oklahoma.
Warning Sign 2: Lender Inquiries You Don’t Recognize
Credit bureaus keep the details of companies who ask for information about you on record for at least two years. Promotional inquiries and account review inquiries are nothing to worry about, because they’re preapproved credit offer inquiries or inquiries by companies you already do business with.
Hard enquiries from companies you don’t recognize are a different matter. Sometimes, fraudsters make a lot of credit card and personal loan applications in a short period of time, so if you see a recent list of unknown inquiries, someone might be trying to steal your identity.
Tip:Sometimes, the name of a financial institution doesn’t precisely match the name of the company checking your credit. Car dealerships, for example, sometimes run a series of credit checks via different finance companies—so it’s worth double checking before filing a fraud complaint.
Warning Sign 3: Accounts You Never Opened
Only your own accounts—including accounts that you’ve cosigned and for which you’re an authorized user—should appear on your credit report. If you find an unknown account on your credit report, one of two things has happened:
Your credit information has been commingled with someone else’s information by mistake
Your credit has been compromised by a fraudster
If you find an unknown account on your credit report, contact the relevant lender right away and tell them what’s going on.
Warning Sign 4: You Credit Utilization Goes Up
If you suddenly owe more than before and you haven’t changed your spending habits, someone else might be splurging on your behalf. Check your credit card statement very carefully and flag any suspicious transactions straight away. Most credit card companies have a maximum 120-day limit for chargebacks, so it’s important to review purchases regularly.
Warning Sign 5: Your Score Goes Up or Down Unexpectedly
Credit scores change over time. When negative information falls off your credit report after a certain period of time, your score increases. On the other hand, if you apply for too many loans or credit cards in a short space of time, your credit score could take a hit. If your credit score changes dramatically—especially if it’s for the worse—dig deeper.
Warning Sign 6: Public Records You Don’t Recognize
Negative public records can substantially impact your creditworthiness. Bankruptcies, for instance, often remain on record for up to a decade. If you see public records you don’t recognize, alert the issuing agency without delay.
Tip:Liens and civil court judgments used to appear on credit reports, but credit bureaus no longer collect information about those types of public records. Bankruptcies are now the only public records included on credit reports.
Can Someone Steal Your Identity with Your Credit Report?
Your credit report contains a lot of personal information, so it’s a goldmine for identity thieves. With a copy of your report in hand, a potential fraudster might be able to see:
Full name
Birth date
Social Security number
Current and past home addresses
Phone number
Accounts held in your name
Payment records
Public records, including bankruptcies
Many other valuable personal and financial details
Credit report content sometimes varies according to the credit bureau.
If thieves need more information after accessing your credit report, they often choose to misrepresent themselves to get it. Phishing and smishing scams are when criminals pretend to be legitimate financial institutions—or government agencies like the IRS—to get personal information from victims via email or text.
What Is the Safest Way to Check My Credit Report?
You can check your credit report quickly and easily with Credit.com’s ExtraCredit monitoring service. ExtraCredit includes five helpful tools, which help you monitor, build, earn, protect, and restore your credit profile. Two tools in particular can help you avoid or combat identity fraud: Track It and Guard It.
Track It
With ExtraCredit’s Track It tool, you get access to all three credit bureau reports. You can also monitor 28 FICO® scores—the real scores lenders see when they consider auto loan, credit card, and mortgage applications. Track It also includes a helpful credit monitoring tool, which gets updated every month. If something suspicious happens, you’ll notice right away.
Guard It
Many hackers sell consumer information on the dark web. Nefarious individuals use software, specific net configurations, or special authorizations to access the dark web. Thankfully, ExtraCredit’s Guard It tool actively monitors the dark web for consumer information and sends out security alerts when data breaches happen. You also get a $1 million ID insurance policy when you sign up with ExtraCredit.
Get Identity Theft Protection
Identity theft is a big problem in the United States. There were 650,572 cases of identity theft in America in 2019—and over 270,000 of those cases involved credit card fraud. If you see an unknown address or notice an unknown credit card on your credit report, flag it up right away. Tools like ExtraCredit from Credit.com make it easier to monitor your report on a monthly basis, so you can rest more easily.
In July 2016, the Consumer Federation of America (CFA) and VantageScore Solutions reported that most consumers—more than 80%—knew basic facts about their credit scores, including that credit scores are used by lenders to approve or deny mortgages and by credit card issuers to approve or deny credit cards.
While it’s good that most people know the importance of credit scores, the same survey found that many consumers don’t understand credit score details. In other words, about how personal credit works and how credit scores work still confuses people.
How Are Credit Scores Created?
When you borrow money, whether through a revolving account, like credit cards, or an installment account, like an auto loan or student loan, the information is gathered by the credit bureaus. The data the bureaus keep in your credit files is the date used to calculate your credit scores.
When you apply for a loan or card, the bank or issuer may look at just your credit score or at your entire credit file. There are five major areas of information in your credit file that are used to calculate your score:
Payment history
Debt usage, also known as your credit utilization ratio
Age of credit accounts
Types of accounts or account mix
The number of hard inquiries on your credit, not soft inquiries
A good credit score includes a healthy mix of all these factors. Each factor though weighs differently toward a score. Payment history makes up 35% of your score. Debt usage 30%, credit age 15%, and account mix and credit inquiries each make up about 10% of your score.
How Are Credit Scores Used?
You have multiple scores and types of scores and there are different scoring models. The resulting scores and your credit file are used to determine your risk factor for future loans. The three-digit score is a numerical representation that indicates how risky a borrower you are from a lender’s perspective.
Score ranges break down as follows:
Excellent credit: 750+
Good credit: 700-749
Fair credit: 650-699
Poor credit: 600-649
Bad credit: below 600
A higher credit score—roughly 700 or above—can result in your getting approved for better terms and conditions. For example, your credit reports and/or scores impact the deals and interest rate you get when you buy a home, finance a car, rent an apartment, apply for a job, buy insurance, purchase a cell phone or open a new credit card.
The best way to improve your credit score or maintain it is to be responsible with the credit cards and loans you have. Remember those five factors mentioned a minute ago? This is where they come into play—things like making loan and credit card payments on time each month and maintaining a good debt usage or a credit utilization rate—the amount of debt, including credit card debt, you have in relation to your overall credit limit—can help you reach the credit score you’re after.
Using credit irresponsibly by making late payments and maxing out credit limits can have an affect your credit negatively and lower your credit score.
How Does Credit Reporting Work?
The credit reporting system includes three main players:
Consumers
Credit bureaus
Financial companies, such as banks, lenders and credit card issuers
Information about your credit cards, loan accounts and credit inquiries is reported electronically to the three main national credit bureaus—TransUnion, Equifax and Experian—by lenders and creditors roughly every 30 days. The bureaus collect and store your credit information in your credit file for future reference. Meaning, your behaviors can be reviewed in the future by others to determine your risk level.
Businesses, such as auto loan lenders, banks, credit unions, credit card companies and insurance agencies—even employers—use your credit data from the credit bureaus to determine your risk level. Once they have an idea of how risky it is to lend you money, they determine the rates you have to pay or other terms and conditions. Or, they may determine not to loan you money or give you a credit card at all. They may also use this information to send you pre-approved offers in the mail.
The three national credit reporting agencies don’t share information with each other and not all lenders or creditors report to each. As such, your credit reports from TransUnion, Equifax and Experian can contain different information about you. So, it’s important to monitor all three reports because you can never be sure which one will be used when you apply for a new account. You also want to make sure you review them for any errors that are damaging your scores. Learn more about how to dispute an error on your credit reports.
Are Creditors Required to Report to Credit Bureaus?
Not all creditors report your account information to the credit bureaus. And they’re not required to. While businesses are legally required to report accurate information, there’s no law that says they have to report at all. While nearly every major creditor reports to all three bureaus, smaller lenders and banks may not send your monthly account information to all three or any of the credit bureaus.
What’s On Credit Reports?
Along with your credit card and loan account records, basic information about you, like your name, address and recent applications, is recorded in your credit files. Public records such as bankruptcies, tax liens and judgments can also appear on your reports.
Information about your income, race, gender, age, religion or health details isn’t included on credit reports.
Most information expires from your credit reports after 7 to 10 years, but when information expires can vary depending on the circumstance. It’s important to keep the information on your credit reports positive and accurate. And if there’s something inaccurate on your credit reports, you can file a dispute with one or more of the credit reporting bureaus to try and have it removed from your file.
Find Out Where You Stand
Finding out how credit works is important. And now that you’ve done that, you likely want to know where you stand. You can get your free Experian credit score and a free credit report card on Credit.com.
Your report card includes including a grade for each area that makes up your scores. You see how your payment history, debt and other factors affect your scores, and get recommendations for ways to improve each area if needed.
Your report card is updated every two weeks, so you can check your credit regularly and ensure nothing unexpected pops up. An unexpected change in your score can indicate an issue, such as potential identity theft.