Your credit report is the information provided to the credit scoring system lenders use to determine their financial risk in granting you a home loan or home equity line of credit (HELOC). Credit bureaus, or consumer reporting agencies (CRAs), collect, package, and sell what is commonly known as your “credit report” or “credit profile” to companies seeking information about your financial matters. However, these reports can contain inaccurate, incomplete, outdated and sometimes even misleading information that can lower your credit score, also known as your FICO score, and can cause you to be denied a line of credit or debt consolidation loan, or to settle for a “bad credit” loan with high interest and poor terms.

There are hundreds of credit bureaus across the nation, but they are generally are affiliates of, or subscribers to, these three bureaus: Trans Union, Experian, and Equifax

What is a FICO score?

FICO is a credit scoring system developed by Fair Isaac & Co. According to myFICO.com, a division of Fair Isaac, you have three credit scores that range from 300 to 850, one for each of the three credit bureaus - Experian, TransUnion, and Equifax. Each score is based on information the credit bureau keeps on file about you (credit reports). As this information changes, your FICO credit scores tend to change, as well.

How Can I Increase My FICO Score?

Increasing your credit score takes time. The following are ways you can work towards increasing your FICO credit score.

Pay your bills on time to raise your score. Late payments and collections lower it.

Do not apply for credit frequently. Having too many inquiries worsens your score.

Reduce your credit card balances. Being “maxed” out affects your FICO score negatively.

If you have limited credit, obtain additional credit. Not enough credit can negatively impact your score.

Get a copy of your credit reports from each of the above-listed CRAs and check them for accuracy. If any information is incorrect, dispute it, so it can be corrected. This is known as “repairing your credit.”

Isn’t Credit Repair Illegal?

Credit repair is only a concern when anyone tries to have accurately reported derogatory information illegally deleted from their credit reports. The Federal Trade Commission (FTC) states that both the consumer reporting agency and the information provider (company or organization that provides information about you to a CRA) are responsible for correcting inaccurate, incomplete or outdated information in your report under the Fair Credit Reporting Act (FCRA).

Disputing Items on Your Report

You can dispute inaccurate, incomplete or outdated items online, but the FTC suggests that you dispute them by mail. Include copies (NOT originals) of documents that support your position. Clearly identify each item you dispute, explain why you dispute it, and request that it be removed or corrected. You may want to enclose a copy of your report with the items circled. Send your letter by certified mail, “return receipt requested,” so you can document what the CRA receives. Keep copies of your dispute letter and enclosures.

You could also contact the information provider directly (in writing) to dispute the items. Be sure to include copies (NOT originals) of documents that support your position. If the information is found to be inaccurate, the information provider must update the item with the CRA or have it deleted.

Maria Ny is an experienced free-lance writer from San Diego, California. She writes articles covering a broad range of subjects ranging from Bankruptcy Reform, Credit Repair to mortgage refinancing. Check out her featured articles at http://www.bdnationwidemortgage.com/

Equifax- P.O. Box 740256, Atlanta, Georgia 30374 (800) 685-1111 http://www.equifax.com

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If you’re a homeowner in need of money, you probably have some loans that are easily available to you. As long as you have some equity in your house–the amount of your home’s value minus any amount you still owe on it–you can tap it for cash. In general, these three loans are easily available to most homeowners:

HOME EQUITY LOAN:

Based on the amount of equity in your home, you can borrow on that amount and receive it in one lump sum. Your lender will assess the amount you can borrow, and you’ll simply need to fill out some paperwork before receiving your check. Although your credit history and credit score will probably be checked during the application process, even those with less-than-perfect credit can usually get approval as long as you have sufficient equity in your home. A Home Equity Loan is perfect for folks who need a chunk of money for remodeling or an emergency.

HOME EQUITY LINE OF CREDIT:

Similar to a Home Equity Loan, the amount you can borrow is based on the equity in your house. However, rather than receiving a lump sum of cash, you’ll be issued a line of credit. This is a revolving account–meaning you can draw off it over and over again. This type of loan is best for folks who plan to use it as an emergency fund, or who are going to make many small repairs to their home over time.

SECOND MORTGAGE:

In this case, you simply take out a second mortgage loan on your home. By placing a second loan against your home, you get a lump sum of cash to use for whatever reason you desire. However, second mortgages tend to be expensive. You’ll have to pay closing costs, fees and possibly points on your loan. The interest rate tends to be higher, since a second mortgage is a bigger risk for a lender (in the event of default, your first mortgage is the one that gets paid off).

Most homeowners will find that they qualify for at least one of these three types of loans. Choosing the best one for you depends on your personal circumstances, such as the amount of equity in your home and the reason you want the cash.

Go to http://www.homeequitywise.com to compare Home Equity Loans vs. Second Mortgages.

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As a homeowner, you may be able to borrow against the equity in your home.
The equity is the difference between the property’s market value and the
outstanding loan balance. These types of loans have become increasingly popular
because they can be used for almost anything. Common uses include debt
consolidation (paying off high-interest credit card debt), home improvements,
purchasing or refinancing a home, and paying for education expenses like college
tuition.

The primary advantages of a home equity loan are a lower interest rate and
potential tax deductions. The interest rate you will pay on a home equity loan
is generally lower than the interest rate you will pay on the average credit
card or any other type of non-secured debt. Also, you can generally deduct the
interest you pay. The interest you pay on credit cards and other types of
personal loans is typically not tax-deductible.

Home equity loans usually come in two forms: a second mortgage and a home equity
line of credit. Here are better definitions of the two:

A Second Mortgage, like a first mortgage, is a loan that uses your house as a
guarantee that you will make your payments. The loan is a form of credit for
which your home is pledged as collateral. Generally, home equity loans offer a
fixed interest rate and a fixed monthly payment. A standard home equity loan is
paid off over an extended period of time.

A Home Equity Line of Credit also known as a HELOC, is a type of revolving
credit for which your home is pledged as collateral. The interest rate and
payments are variable. A home equity line of credit works similarly to a credit
card. The payment each month is based upon the outstanding balance owed. As
payments are applied to principal, your available credit increases accordingly.

If you are considering taking out a home equity loan, shop around. The home
equity industry is highly competitive. Look for the best rates and repayment
plans that are available.

For a recommended source for your next

home equity loan, visit
HomeEquityWise.com.

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