Sunday, March 26, 2006

Extra Credit

I'm a firm believer that everyone should know where there money goes and what their credit is, especially the single ladies. Sure, a rich, gainfully employed man may come along and sweep you off your feet someday but eventually you'll realize he's an idiot and not want to spend time with him and discover you've gotten used to the life of luxury and are so screwed. Do not stay with a man because he makes you feel financially secure. That's stupid. Figure out how to make yourself financially secure. Here's a few pieces of advice from Sassy Pants Inc. FYI, Sassy Pants Inc. is not in anyway a professional financial advisor. Or, for that matter, an actual "Inc." This is just me, Sassy Pants, telling you what I've done and how it worked for me. Go out there and be proactive.

Get your free Annual Credit Report. This brings you to a clearinghouse of sorts. You will have to type in about as much information as you would if you were ordering something on-line, maybe less. Then you get to a menu of 3 credit report companies - Equifax, Experian and Transunion. I'm writing this as I'm going through the process and I just hit the back button and my session expired, along with all the info I had typed. Grrr...Let's try this again. OK, when it asks you which company you want the report from you are allowed to select all of them. If you go forward, do not click "Back", use the link that says "Return to" toward the top.

Transunion - 1) You'll have to create a username and password and choose a very stupid "secret" question to use in case you forget your password and such. They are stupid questions because it's "what's your favorite (choose 1) show, game, movie, food, etc"... I am so going to forget what my favorite was at this moment when they ask me later. FYI: I have 30 days to access my free information.
2) I chose not to receive monthly newsletter and other crap.
3) You have to prove you are you by providing more information - an account number or past addresses. I could provide my car loan account but then it asked me for one of three accounts I no longer have - a car loan I paid off in 2002, my mortgage account, and my Xs truck. Thank goodness I keep paperwork. I found my mortgage account. Obviously this means I have things in my credit report that I don't have in "real life" anymore.
4) It then asks if you want to order your credit score as well for $5.95. That's the score lenders use to give you more credit. It is not free. Dang it. I'm going for it though. It pays to be informed. And...holy shit, the highest credit score you can have is 925. Mine's 860! I'm in the 95th percentile. That's like an A+. And for this overachiever that is very validating. Ok, SO worth the $5.95. Why do I have such a good score? I've never paid anything late, I have or have had lots of debts and loans (mortgage, student loans, cars) but some have been paid off. Pretty much you have to prove to the gods of crediting that you are responsible with money, spend just enough to let them know you are spending but not enough to make them nervous that you aren't going to be able to pay it back. Transunion says "Pay bills on time, lower balances and use credit wisely to improve your score over time." Pretty simple - in theory.

Here are some things that affect your score according to TransUnion.

1.Installment account balances too high in proportion to credit limits: Consumers having high balances on these accounts in relation to the credit limits are more likely of future delinquency. [Sassy Pants Translation - Just because you have a credit limit of $10,000 doesn't mean you should fill up the card. It looks better if you have $2000 worth of debt, but $8000 you are not using.]
2. Too few satisfactory accounts: Consumers with few accounts in good standing are more likely of future delinquency. [Sassy Pants Translation - One credit card and not loans is not enough to base your credit score on. It makes sense in a way. If you took a class and all the teacher had to base your grade on was one quiz the teacher wouldn't really know if you were a good student or got lucky. Of course if you have bad credit, how are you supposed to get more accounts to improve your bad credit?]
3. Too many inquiries:Excessive inquiries on the credit report have a negative impact on your credit score. Limiting the number of credit applications you complete may improve your credit score. [Sassy Pants Translation - This one is kind of annoying given #2. They want you to have more things to base your score on but they punish you if you apply for too many things. Remember that the next time you're in a store and they ask you if you'd like to apply for a card. In some cases it can be good, but if you've already signed up for 3 other cards while walking through the mall, watch out.]

Experian - They ask you for the last 4 digits of your social security number and again some account information. They don't ask for numbers, it's more like a multiple choice test. Pick the accounts you actually have out of the list they provide. They then give you your report and a report number you can use to log in with in the future to see your report. This is good because I am out of computer paper so once I get some I can look at it again and print it out. Click on "Print credit report" to see the most detailed view, even if you don't want to print it yet. Experian also charges $5.95 for your credit report.

Equifax - The first screen already had my info typed in for me. They have the same multiple choice account "test" as Experian does to prove you are who you say you are. They charge $7.95 for the credit score. They offer you the choice of coming back to visit your report for the next 30 days or not. You have to create a user account if you do. At least these guys ask a better "secret" question like birthplace or spouse's middle name. Things that don't change. Duh!

I can't recommend one report over another. They are all slightly different in format. I don't have the time or inclination yet to see if they have the same information. No wait, one difference I do notice is under "Inquiries," i.e. who has inquired about your score. This varies because the companies doing the inquiring can choose any of these 3 credit companies to query, just like you can. If you'd like to be environmentally friendly while being fiscally responsible, Transunion's report uses the least paper for my information, 9 pages. Equifax is 28 pages long and Experian is in the middle with 15 pages.

Experian seems to know the most about me non-creditwise, like my addresses for the last 10 years - some that I had forgotten. Equifax even has my Verizon account which is not something that is debt, it's just my monthly phone bill - not even my cell phone which because it is a contract is kind of like debt/credit.

I hope this was helpful. I'm a little drained. And I killed a bunch of trees printing out all my reports (I found more paper). But, I only have to do this once a year. And now I'm done. That's enough for my Finance goal today. Now on to Fitness. I think I'll take a run. If I don't take a nap first.


DecemberFlower said...

Boo, I don't want to pay for my credit score, even though from the free report it looks like I'm in pretty good shape.

npapaya said...

word to the wise people:
if you pay off a credit card or transfer a balance to one card-don't close the old ones unless they charge you a fee for keeping it open. The total amount of credit available- not just on one account, but overall, makes a big difference in your scoring.

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