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It's easy to think that bad credit is no problem from the advertisements in the media. However, have you ever examined the fine print on those "easy credit" ads? You'll discover that people with bad credit and bankruptcies are paying twice, three times, even four times the amount of interest that a person with good credit pays.

By getting the lowest possible interest rates, you save a substantial amount of money.
It is estimated that consumers with compromised credit pay billions in additional costs per annum. Credit grantors, fueled by credit reporting, advance strong competitive advertising campaigns for the most desirable borrowers.

Lower interest rates, reduced annual fees, toll-free customer service centers, customer recognition programs and purchase protection plans are some of the benefits of this rivalry.

Buying a home is the biggest single investment most people will ever make. Your credit history is one of the several important factors used in determining whether you can get a mortgage or not.

One of the details that lenders evaluate when you submit an application for a mortgage is your payment record on things such as credit cards, car loans, rent and related commitments.

If you intend to start a business, credit review and scoring is important as a means for your financers to evaluate your capability to handle the related risk and the possible losses resulting from charge backs and fraud. You will make the decisions for your business and have control of the credit card processing, and your good credit is an indication of your financial responsibility.

Blemishes on your credit record can have an effect on not only your ability to get a job, but also to lease an apartment or purchase a car.

Making numerous requests for credit, paying credit card bills late, and having a great deal of debt could lower your credit score.

Learn to keep track of how much you spend and on what. Try to find any area that's way out of line - it may be something as noticeable as eating out or as surprising as dry cleaning bills - where you can curtail spending and save some cash.

Make a budget - it is the first step to your financial freedom. Before you can devote yourself to increasing your money, you need to know where it goes.

In addition, you can be eligible for all kinds of 0% interest, low interest, cash back and rewards credit cards if you have a good credit record. You can in fact make money off the credit card companies with a first-rate credit rating.

As a consumer you've learned the importance of establishing a good credit rating with your lenders. Whether you are shopping for a new home or auto, or searching for the best deals on insurance, your credit worthiness will be judged by your credit rating or credit score.

A bad credit history or bad credit habits will place "black marks" on your credit profile. These include things such as late payments, having an account assigned to a collection agency, and of course bankruptcy.

Establishing good credit habits and therefore a good credit rating will improve your credit worthiness. This will be reflected in potential lenders offering you substantially lower interest rates and better deals on credit offers.

Here are 4 tips to help you create a shining credit profile:

1) Pay Your Bills On Time
Lenders only have your past payment history on which to decide the type of credit risk you present to them. How you pay off your debts now indicates to them how you will pay off future debts.

2) Don't Carry Too Many or Too Few Credit Cards
How much is too much? How little is too little? Many credit experts and financial planners suggest two to four credit cards is just the right mix.

3) Pay At Least the Minimum Due
Always pay at least the minimum due payment, but never less. And remember, just paying the minimum payment means it will take you years and years to pay off that credit card.
Example: Paying off a $2,000 credit payment at 18% APR with a minimum monthly payment of 2% ($40 dollars or less) will take you 30 years to pay off the amount plus interest.

4) Review Your Credit Report Regularly
Monitor your credit report from all three major credit bureaus - Experian, TransUnion, and Equifax - on a regular basis. Check your credit profile at least annually. Review it carefully and make sure that any past mistakes or disputes have been corrected.

Also, if you notice an account listed that you know that you have not personally opened, contact that creditor and the credit bureaus immediately. This could be a sign that you've had your identity stolen. Request to have a fraud alert placed on your profile and account to protect yourself and your credit. Identity theft is the fastest growing consumer crime in America, with an estimated 1 million people victimized each year.

Establish good credit habits early in life and reap the benefits that your good credit rating will provide you for the rest of your financial future.

A credit inquiry is an item on a credit report that shows a business with a "permissible purpose" (as defined under the federal Fair Credit Reporting Act) has previously requested a copy of the report.

When you check your credit report, you may notice that a number of credit inquiries have been made, sometimes from businesses that you don’t know. But the only inquiries that count toward your FICO score are the ones that result from your applications for new credit.

There is only one type of credit inquiry that counts toward your FICO score. When you apply for a mortgage, auto loan or other credit, you authorize the lender to request a copy of your credit report. These types of inquiries, prompted by your own actions, appear on your credit report and are included in your FICO score.

Your own credit report requests, credit checks made by businesses to offer you goods or services, or inquiries made by businesses with whom you already have a credit account do not count toward your FICO score. Credit checks by prospective employers also do not count. These types of inquiries may appear on your credit report, but they are not included in your FICO score.

Checking your credit reports regularly to be sure they are accurate and error-free is a good idea. In fact, maintaining accurate credit reports is a part of good credit management, which can help to improve your FICO scores over time.

How inquiries are factored into FICO scores.
There are five types of information used to calculate a FICO score at any given point in time. Each type of information counts as a percentage of a total FICO score:

Payment history = 35%
Amounts owed = 30%
Length of credit history = 15%
New credit = 10%
Types of credit in use = 10%

These percentages are based on the importance of the five categories for the general population. For particular groups, such as people with relatively short credit histories, the importance of the categories may differ.
Inquiries are a subset of the "new credit" category shown above, which accounts for 10% of the total FICO score. Their importance depends on the overall information in your credit report. For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your score. What's important is the mix of information, which varies from person to person, and for any one person over time.

Inquiries may or may not affect your FICO score.
A FICO score takes into account only voluntary inquiries that result from your application for credit. The information about inquiries that can be factored into your FICO score includes:

• Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account.
• Number of recent credit inquiries.
• Time since recent account opening(s), by type of account.
• Time since credit inquiry(ies).

A FICO score does not take into account any involuntary inquiries made by businesses with whom you did not apply for credit, inquiries from employers, or your own requests to see your credit report.

For many people, one additional credit inquiry (voluntary and initiated by an application for credit) may not affect their FICO score at all. For others, one additional inquiry would take less than 5 points off their FICO score.

Inquiries can have a greater impact, however, if you have few accounts or a short credit history. Large numbers of inquiries also mean greater risk: People with six inquiries or more on their credit reports are eight times more likely to declare bankruptcy than people with no inquiries on their reports.

FICO is registered trademark for Fair Isaac and Company, or Fair Isaac for short. Fair Isaac is a company who constructs 'credit score' tools for lenders who use them to evaluate the credit of their customers and prospects. FICO credit scores are among the most well known credit scores, but there are certainly other competitors of Fair Isaac who also construct credit scores. Additionally all three of the national credit bureaus may construct proprietary credit scores of their own - independent of Fair Isaac.

FICO credit scores have become well known to consumers over the last several years because they are often used in mortgage loan transactions. For example, a lender wishing to extend a home mortgage loan to a consumer, may order a FICO score on the consumer to try to predict whether the consumer is going to default on the mortgage loan at some date in the future. A FICO score ordered through a credit bureau is only based on elements in your credit report. With FICO scores, a higher score means you are less risky for the lender. As a result, a high FICO score may mean you qualify for a larger loan or perhaps a better interest rate.

FICO credit scores have traditionally only been available to lenders as a tool to evaluate your credit. However, FICO has also made their scores available to consumers.

It is important to note that your credit score is not part of your credit report, and in fact, it is separate from your credit report. Also, credit bureau scores cannot be purchased without the simultaneous purchase of your credit report.

Non-FICO credit scores available on the Internet to consumers are much the same as credit scores from Fair Isaac. They are all trying to compute a number that measures how risky you are as a loan prospect based solely on the elements of your credit report. Credit bureau scores do not use your income, net worth, race, religion, sex, marital status, or age to compute your score. Credit bureau scores are only based on what's in your credit report.

The three major credit bureaus maintain credit files on nearly 90 percent of adults in the United States. An alarming number of these credit reports (79%) contain errors and could cause the denial of credit, insurance, or even employment.

To maintain your financial well-being, it is vital to monitor the status of your credit report and remove any inaccuracies.  Check your credit status by requesting a copy of your credit report every 4-12 months.

However, instead of ordering a report from each bureau at one time, save money by requesting your report from one of the three major credit bureaus every 3-4 months. Though your credit information will vary slightly from one bureau to the other, this should still provide you with a general assessment of your credit status.

Information on the Three Major Credit Bureaus:

Equifax - www.equifax.com
To order your report, call: 800-685-1111 or write:
P.O. Box 740241, Atlanta, GA 30374-0241
To report fraud, call: 800-525-6285
And write: P.O. Box 740241, Atlanta, GA 30374-0241
Hearing impaired call 1-800-255-0056 and ask the operator to call the Auto Disclosure Line at 1-800-685-1111 to request a copy of your report.
Main Number: 404-885-8000

Experian (Formerly TRW) - www.experian.com
To order your report, call: 888-EXPERIAN (397-3742) or write:
P.O. Box 2002, Allen TX 75013
To report fraud, call: 888-EXPERIAN (397-3742) and write:
P.O. Box 9530, Allen TX 75013
TDD: 1-800-972-0322

Trans Union - www.transunion.com
To order your report, call: 800-888-4213 or write:
P.O. Box 1000, Chester, PA 19022
To report fraud, call: 800-680-7289 and write:
Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634
TDD: 1-877-553-7803
1-800-916-8800
1-800-680-7289

Social Security Administration (Fraud line): 1-800-269-0271

Rights under the Telemarketing Sales Rule
To learn about your rights under the Telemarketing Sales Rule and how to protect yourself from fraudulent telephone sales practices, request a free copy of Straight Talk About Telemarketing. Contact: Consumer Response Center, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580; toll free, at 1-877-FTC-HELP (382-4357); TDD 1-866-653-4261.

The following organizations have additional information:
American Financial Services Association
Education Foundation
919 Eighteenth Street, NW
Washington, DC 20006
www.afsaef.org

National Association of Consumer Agency Administrators
1010 Vermont Avenue, NW, Suite 514
Washington, DC 20005

Navy Personnel Command
Personnel and Family Readiness (PERS-662C3)
5720 Integrity Drive, Building 768
Millington, TN 38055-6620

Clean your Report Today
Repairing your credit report is one of the most important financial decisions you can make. Ovation Law is a trusted law firm that makes the process convenient, personal, and effective. If you have any other questions or need for or credit report repair services, please contact us anytime:

  Phone: 1 (866) 639 - 3426
  Email: info@OvationLaw.com