Your credit history is important to a lot of people: mortgage lenders, banks, utility companies, prospective employers, and more. So it’s especially important that you understand your credit report, credit score, and the companies that compile that information, credit bureaus. This brochure provides answers to some of the most common, and most important, questions about credit.
Your Credit Report
What is a credit report?
A credit report is a record of your credit history that includes information about:
Your identity. Your name, address, full or partial Social Security number, date of birth, and possibly employment information.
Your existing credit. Information about credit that you have, such as your credit card accounts, mortgages, car loans, and student loans. It may also include the terms of your credit, how much you owe your creditors, and your history of making payments.
Your public record. Information about any court judgments against you, any tax liens against your property, or whether you have filed for bankruptcy.
Inquiries about you. A list of companies or persons who recently requested a copy of your report.
Why is a credit report important?
Your credit report is important because lenders, insurers, employers, and others may obtain your credit report from credit bureaus to assess how you manage financial responsibilities. For example:
Lenders may use your credit report information to decide whether you can get a loan and the terms you get for a loan (for example, the interest rate they will charge you).
Insurance companies may use the information to decide whether you can get insurance and to set the rates you will pay.
Employers may use your credit report, if you give them permission to do so, to decide whether to hire you.
Telephone and utility companies may use information in your credit report to decide whether to provide services to you.
Landlords may use the information to determine whether to rent an apartment to you.
Who collects and reports credit information about me?
There are three major credit bureaus—Equifax, Experian, and TransUnion—that gather and maintain the information about you that is included in your credit report. The credit bureaus then provide this information in the form of a credit report to companies or persons that request it, such as lenders from whom you are seeking credit.
Where do credit bureaus get their information?
A: Credit bureaus get information from your creditors, such as a bank, credit card issuer, or auto finance company. They also get information about you from public records, such as property or court records. Each credit bureau gets its information from different sources, so the information in one credit bureau’s report may not be the same as the information in another credit bureau’s report.
How can I get a free copy of my credit report?
You can get one free credit report every twelve months from each of the nationwide credit bureaus—Equifax, Experian, and TransUnion—by
You will need to provide certain information to access your report, such as your name, address, Social Security number, and date of birth.
You can order one, two, or all three reports at the same time, or you can request these reports at various times throughout the year. The option you choose will depend on the goal of your review. A report generated by one of the three major credit bureaus may not contain all of the information pertaining to your credit history. Therefore, if you want a complete view of your credit record at a particular moment, you should examine your report from each bureau at the same time. However, if you wish to detect any errors and monitor changes in your credit profile over time, you may wish to review a single credit report every four months.
Who else is allowed to see my credit report?
Because credit reports contain sensitive personal information, access to them is limited. Credit bureaus can provide credit reports only to
lenders from whom you are seeking credit;
lenders that have granted you credit;
telephone, cell phone, and utility companies that may provide services to you;
your employer or prospective employer, but only if you agree;
insurance companies that have issued or may issue an insurance policy for you;
government agencies reviewing your financial status for government benefits; and
anyone else with a legitimate business need for the information, such as a potential landlord or a bank at which you are opening a checking account.
Credit bureaus also furnish reports if required by court orders or federal grand jury subpoenas. Upon your written request, they will also issue your report to a third party.
Does the credit bureau decide whether to grant me credit?
No, credit bureaus do not make credit decisions. They provide credit reports to lenders who decide whether to grant you credit.
How long does negative information, such as late payments, stay on my credit report?
Generally, negative credit information stays on your credit report for seven years. If you have filed for personal bankruptcy, that fact stays on your report for ten years. Information about a lawsuit or an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. Information about criminal convictions may stay on your credit report indefinitely.
What can I do if I am denied credit, insurance, or employment because of something in my credit report? What can I do if I receive less favorable credit terms than other consumers because of something in my credit report?
If you are denied credit, insurance, or employment—or some other adverse action is taken against you, such as lowering your credit limit on credit card account—because of information in your credit report, the lender, insurance company, or employer must notify you and provide you with the name, address, and phone number of the credit bureau that provided the credit report used to make the decision. You can get a free credit report from this credit bureau if you request it within sixty days after receiving the notice. This free report is in addition to your annual free report.
In addition, lenders may use a credit report to set the terms of credit they offer you. If a lender offers you terms less favorable (for example, a higher rate) than the terms offered to consumers with better credit histories based on the information in your credit report, the lender may give you a notice with information about the credit bureau that provided the credit report used to make the decision. Again, you can get a free credit report (in addition to your annual free report) from this credit bureau if you request it within sixty days after receiving the notice.
If you receive one of these notices, it’s a good idea to get your free credit report and review the information in it right away. If you think your credit report contains inaccurate or incomplete information, follow the steps in Credit Report Errors below, to try to resolve the issue. For tips on how to improve your chances of being granted credit, or to improve your chances of receiving credit on better terms, read the Federal Reserve’s 5 Tips for Improving Your Credit Score (available online at https://www.federalreserve.gov/pubs/creditscore/creditscoretips_2.pdf).
I’ve been receiving unsolicited credit offers. Why? Can I opt-out of receiving these offers?
Credit bureaus may sell the names and addresses of consumers who meet specific credit criteria to creditors or insurers, who must then offer them credit or insurance. For example, a creditor could request from a credit bureau the names and addresses of consumers who have a credit score of 680 or higher and then offer credit to those consumers. You can have your name and address removed from these lists by opting-out of the listing. This will reduce the number of unsolicited offers you receive. To opt-out, call 888-5-OPTOUT (888-567-8688) or visit optoutprescreen.com. You will need to provide certain information in order to opt-out, such as your name, address, Social Security number, and date of birth. You have the ability to opt-out of receiving offers either for five years or permanently. If you want to opt-out permanently, you will need to fill-out, sign, and mail-in a form. The form is available by either calling the toll-free number or visiting the website. You can reverse your opt-out decision at any time to start receiving offers of credit and insurance again by calling the toll-free phone number or visiting the website.
Your Credit Score
What is a credit score? How is my credit score calculated? A credit score is a number that reflects the information in your credit report. The score summarises your credit history and helps lenders predict how likely it is that you will repay a loan and make payments when they are due. Lenders may use credit scores in deciding whether to grant you credit, what terms you are offered, or the rate you will pay on a loan.
Information used to calculate your credit score can include:
the number and type of accounts you have (credit cards, auto loans, mortgages, etc.);
whether you pay your bills on time;
how much of your available credit you are currently using;
whether you have any collection actions against you;
the amount of your outstanding debt; and
the age of your accounts.
What can cause my credit score to change?
Because your credit score reflects the information in your credit report, changes to your credit report may cause your credit score to change. For instance, if you pay your bills late or incur more debt, your credit score may go down. However, if you pay down an outstanding balance on a credit card or mortgage or correct an error in your credit report, your credit score may go up.
How can I get my credit score?
In some cases, a lender may tell you your credit score for free when you apply for credit. For example, if you apply for a mortgage, you will receive the credit score or scores that were used to determine whether the lender would extend credit to you and on what terms. You may also receive a free credit score or scores from lenders when you apply for other types of credit, such as an automobile loan or a credit card.
You may also purchase your credit score from any of the credit bureaus by calling them or visiting their websites.
How can I correct errors found in my credit report?
If you find errors in your credit report, you may dispute the information and request that the information be deleted or corrected. To do so, you should contact either the credit bureau that provided the report or the company or person that provided the incorrect information to the credit bureau.
To contact the credit bureau, call the toll-free number on your credit report or visit their website:
To contact the company or person that provided the incorrect information to the credit bureau, look on your credit report, in an account statement, or on the company’s website for contact information for handling such disputes.
When disputing information on your credit report, you should:
Provide information about yourself, such as your name, address, date of birth, and Social Security number;
Identify specific details about the information that is being disputed and explain the basis of your dispute;
Have a copy of your credit report that contains the disputed information available; and
Provide supporting documentation, such as a copy of the relevant portion of the consumer report, a police report, a fraud or identity theft affidavit, or account statements.
What happens once I send in information to correct information in my credit report?
If you submit your dispute through a credit bureau or directly to the company or person that provided the incorrect information to the credit bureau, your dispute must be investigated, usually within thirty days. If you provide additional information during the thirty-day investigation, that investigation period may be extended an additional fifteen days in some circumstances. When the investigation is completed, either the credit bureau or the company or person that provided the incorrect information to the credit bureau must give you the written results of its investigation. If the information provider finds the disputed information is inaccurate, it must notify all three nationwide credit bureaus so they can correct the information in your credit report. You can get a free copy of your report if the dispute results in a change. This free report is in addition to your annual free report. If an item is changed or deleted, a credit bureau cannot put the disputed information back in your credit report unless the company or person that provided the incorrect information to the credit bureau verifies that the information is, indeed, accurate and complete. You can request that the credit bureau send notices of any correction to anyone who received your report in the past six months. A corrected copy of your report can be sent to anyone who received a copy during the past two years for employment purposes.
What if an investigation does not resolve my dispute?
If an investigation does not resolve your dispute, you can ask that a statement of the dispute be included in your future credit reports. You also can ask the credit bureau to provide your statement to anyone who received a copy of your report in the recent past, but you may have to pay a fee for this service
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Immigration and Customs Enforcement (ICE) — the federal law enforcement agency in charge of arresting, detaining, and deporting undocumented immigrants or documented immigrants with criminal convictions — is reportedly begiun nationwide raids, potentially impacting thousands of immigrant families.
Dealing with law enforcement can be stressful, so it’s important to know your rights before you’re face-to-face with ICE agents. While there’s never any guarantee that law enforcement officers will follow the law, here’s what they can and can’t legally do to you and what you can legally demand.
Don’t Open the Door:
Like police, ICE can’t enter your home without a warrant signed by a judge. You can ask ICE to slide their document under the door, if they have one, to determine whether or not it's a judicial warrant.
Ask to Speak to a Lawyer:
A good immigration lawyer can help guide clients through the complicated and often confusing system of immigration law, so find one in your area and discuss your status with them, not with law enforcement. If you're at risk, try to speak with an attorney as soon as possible.
The American Immigration Lawyers Association’s Immigration Lawyer Search lets you specify what kind of immigration law you need help with, i.e., “Deportation - Removal,” and search your local area if you enter a city name or zip code; you can even search by last name if you’re familiar with a lawyer in your area by name but not sure how to find them.
Remain Silent or Tell ICE You Wish to Do So:
You have the right to remain silent in any interaction with an ICE agent, and you can tell them so. What you say can be used against you in immigration court or deportation proceedings, so always be cautious of what you say to ICE or law enforcement and ask to speak to a lawyer before any communication takes place.
Don’t Sign Anything:
Unless you’ve already spoken to a lawyer who advises it you shouldn’t sign any documents ICE asks you to. According to the Miami Herald, signing a document provided by ICE may mean you’re signing your own deportation order.
Don’t Lie or Provide False Documents:
Lying to ICE agents can be dangerous. Providing false documents can be used against you in court proceedings.
Don’t Flee or Resist Arrest:
If you run from ICE, the results can be deadly not just legally dangerous. People who help an immigrant escape ICE can be charged with things like obstruction of justice by the Department of Justice, as was the case with a judge who let an immigrant escape after a court hearing. People who attempt to physically stop an arrest can also be charged with resisting a public officer.
You Don’t Have to Tell Them Where Someone Else Is:
You’re under no obligation to tell ICE where someone they’re looking for is, but you shouldn’t lie. Instead, ask the agents to leave contact information.
You’re Allowed to Ask for an Interpreter:
If an immigrant placed under arrest is not an English-speaker, they can ask for an interpreter during their detention process with ICE.
You Should Make a Plan With Family or Loved Ones:
In the event you are detained, it’s wise to have an action plan in place to handle any immediate concerns like child and pet care, and long-term issues like home maintenance and collecting mail. Attorneys also advise that loved ones have on hand the name and contact information for an attorney so they can make contact in the event of an arrest.
When you are immigrating to the United States, it is natural to want to land on strong financial footing. However, all immigrants face a common barrier: a lack of US credit history. This can impede your ability to get approved for a credit card, apply for a mortgage, or engage in other types of financial transactions. While it’s possible to use cash day-to-day, it is a good idea to begin building a credit history as soon as possible. Building credit can make it easier to apply for a mortgage, get a car loan, rent an apartment, or get a rewards credit card. Even if you aren’t looking to do those things now, you might want to in the future.
Whether you’re new to the USA or have been living there for a while, buying a home is an easy process to undergo and there are required steps you can follow so that you can buy your new home easily. You can often pay cash since it’s a much easier, quicker process.
Before you start looking for your new home, you should start by finding the right professionals to guide you through the process, including a real estate agent and an attorney with experience in working with foreign homebuyers. The easiest way to find a good agent is through referrals, and The National Association of Realtors has lists of agents on its website, that are certified “international property specialists” capable of working with foreign buyers. Ensure to chat with the listing agent at the open house. Most of the agents who represent foreign buyers also know attorneys, loan officers, and accountants to help you through the process. To successfully buy a home in the US, there are certain facts you need to know:
THE BROKER works for you at no direct cost and will shepherd you through the process from the first open houses until you close on the sale. Your broker will help you to negotiate and navigate any sticking points along the way. To find the right broker, talk to friends and listing agents at open houses, and look out for agents with expertise in the neighborhoods you like. You can also try an agent matching service. Remember that sellers, not you the buyer, pay the broker fee.
THE LENDER: If you need a loan, shop around by talking to lenders at banks both large and small, and to mortgage brokers.
THE LAWYER: You will need a real estate lawyer to negotiate the contract, review the building’s financial statements and the board minutes so that you make sure there are no violations against your apartment. Your lawyer will order title insurance and will work with your lender to make sure you close on time. Get referrals from your real estate broker, friends, and colleagues. For your lawyer’s fees, you should estimate a payment of about $3,000.
CLOSING COSTS: These are the fees, taxes and insurance payments due when a buyer signs a mortgage and takes possession of the property and these costs vary based on the purchase price and mortgage size of the house but are often total in the five figures. These costs are substantially higher for condos and houses than they would normally be for co-ops.
SOME CUSHION: Ensure that your savings account has a little cushion in it for any unanticipated costs as many apartments need tinkering. For example, the living room may be avocado green or the furniture may need changing. Make sure you set aside extra money for a fresh coat of paint, a new kitchen backsplash or a new sofa to make the place a little homier.
To get approved for a U.S. mortgage, banks would require that you have a good credit history and they will not consider the credit history you have built up in your home country. Thus, prior to getting a mortgage, you should start building your credit score as soon as you can, get your paperwork in order as early as possible. You can build your credit score by opening a U.S. bank account, a credit card account and ensure to document your income on your tax returns. Lenders, condos, and co-ops would ask for your financial information like tax returns, pay stubs and bank statements. Co-ops will also want personal reference letters. Figure out who will write those letters long before you find your dream home. If you need a mortgage, ensure to avoid sudden changes 60 days before you close — so no new jobs, new cars or big purchases. Also, be prepared to explain the source of amounts deposited into any of your accounts during this period.
As a foreign buyer, you should expect to pay at least 30 percent of the value of the home as a down payment. The borrower will be asked to provide documentation to show sufficient income, bank statements, reference letters from their banking or credit institution, and two forms of identification. Your lending institution would inquire about your borrower and will conduct detailed reviews of your borrower’s income and asset documentation. This review sets to look for transparency of your borrower in order to get an understanding of where (and) how their income and wealth is generated and how their assets move around. Depending on your nationality, your visa will be required as well as a copy of their passports (and) a B-1 or B-2 (visitors) visa.
Because the field, for the purchase of homes, is crowded, you can do anything to shine and make a difference. In as much as cash is the king, however, there are other ways to get attention. You can write letters or sing the praises of the apartment you hope to buy.
MAY 22, 2019
Financial Education Debt Credit
Handling Debt Efficiently – Until It’s Gone
It’s no secret that making purchases on credit cards will result in paying more for those items over time if you’re paying interest charges from month-to-month.
Despite this well-known fact, the average American now owes over $6,000 in credit card debt.* For households, the number is much higher, at nearly $16,000 per household. Add in an average mortgage of over $200,000, plus nearly $25,000 of non-mortgage debt (car loans, college loans, or other loans) and the molehill really is starting to look like a mountain.
The good news? You have the potential to handle your debt efficiently and deal with a molehill-sized molehill instead of a mountain-sized one.
Focus on the easiest target first.
Some types of debt don’t have an easy solution. While it’s possible to sell your home and find more affordable housing, actually following through with this might not be a great option. Selling your home is a huge decision and one that comes with expenses associated with the sale – it’s possible to lose money. Unless you find yourself with a job loss or similar long-term setback, often the best solution to paying down debt is to go after higher interest debt first. Then examine ways to cut your housing costs last.
Freeze your spending (literally, if it helps).
Due to its higher interest rate, credit card debt is usually the first thing to tackle when you decide to start eliminating debt. Let’s be honest, most of us might not even know where that money goes, but our credit card statement is a monthly reminder that it went somewhere. If credit card balances are a problem in your household, the first step is to cut back on your purchases made with credit, or stop paying with credit altogether. Some people cut up their cards to enforce discipline. Ever heard the recommendation to freeze your cards in a block of ice as a visual reminder of your commitment to quit credit? Another thing to do is to remove your card information from online shopping sites to help ensure you don’t make mindless purchases.
Set payment goals.
Paying the minimum amount on your credit card keeps the credit card company happy for 2 reasons. First, they’re happy that you made a payment on time. Second, they’re happy if you’re only paying the minimum because you might never pay off the balance, so they can keep collecting interest indefinitely. Reducing or stopping your spending with credit was the first step. The second step is to pay more than the minimum so that those balances start going down. Examine your budget to see where there’s room to reduce spending further, which will allow you to make higher payments on your credit cards and other types of debt. In most households, an honest look at the bank statement will reveal at least a few ways you might free up some money each month.
Have a sale. To get a jump-start if money is still tight, you might want to turn some unused household items into cash. Having a community yard sale or selling your items online can turn your dust collectors into cash that you can then use toward reducing your balances.
Transfer balances prudently.
Consider balance transfers for small balances with high interest rates that you think you’ll be able to pay off quickly. Transferring that balance to a lower interest or no interest card can save on interest costs, freeing up more money to pay down the balances. The interest rates on balance transfers don’t stay low forever, however – typically for a year or less – so it’s important to make sure you can pay transferred balances off quickly. Also, check if there’s a balance transfer fee. Depending on the fee, moving those funds might not make sense.
Don’t punish yourself.
Getting serious about paying down debt may seem to require draconian measures. But there likely isn’t a need to just stay home eating tuna fish sandwiches with all the lights turned off. Often, all that’s required is an adjustment of old spending habits. If your drive home takes you past a mall where it would be too tempting to “just pick a little something up”, take a different route home. But it’s important to have a small treat occasionally as well. If you’re making progress on your debt, you deserve to reward yourself sometimes. All within your budget, of course!
Sources: El Issa, Erin. “2017 American Household Credit Card Debt Study.” NerdWallet*, 2017, nerd.me/2ht7SZg.
As well-intentioned as we might be, we sometimes get in our own way when it comes to improving our financial health.
Much like physical health, financial health can be affected by binging, carelessness, or simply not knowing what can cause harm. But there’s a light at the end of the tunnel – as with physical health, it’s possible to reverse the downward trend if you can break your harmful habits.
A household without a budget is like a ship without a rudder, drifting aimlessly and – sooner or later – it might sink or run aground in shallow waters. Small expenses and indulgences can add up to big money over the course of a month or a year. In nearly every household, it might be possible to find some extra money just by cutting back on non-essential spending. A budget is your way of telling yourself that you may be able to have nice things if you’re disciplined about your finances.
Frequent use of credit cards
Credit cards always seem to get picked on when discussing personal finances, and often, they deserve the flack they get. Not having a budget can be a common reason for using credit, contributing to an average credit card debt of over $9,000 for balance-carrying households.[i] At an average interest rate of over 15%, credit card debt is usually the highest interest expense in a household, several times higher than auto loans, home loans, and student loans.[ii] The good news is that with a little discipline, you can start to pay down your credit card debt and help reduce your interest expense.
Mum’s the word
No matter how much income you have, money can be a stressful topic in families. This can lead to one of two potentially harmful habits.
First, talking about the family finances is often simply avoided. Conversations about kids and work and what movie you want to watch happen, but conversations about money can get swept under the rug. Are you a “saver” and your partner a “spender”? Is it the opposite? Maybe you’re both spenders or both savers. Talking (and listening) about yourself and your significant other’s tendencies can be insightful and help avoid conflicts about your finances. If you’re like most households, having an occasional chat about the budget may help keep your family on track with your goals – or help you identify new goals – or maybe set some goals if you don’t have any. Second, financial matters can be confusing – which may cause stress – especially once you get past the basics. This may tempt you to ignore the subject or to think “I’ll get around to it one day”. But getting a budget and a financial strategy in place sooner rather than later may actually help you reduce stress. Think of it as “That’s one thing off my mind now!”
Taking the time to understand your money situation and getting a budget in place is the first step to put your financial house in order. As you learn more and apply changes – even small ones – you might see your efforts start to make a difference!