Bankruptcy Scores: Another Measure of Credit-worthiness

According to experts, another way for lenders and credit-card issuers to estimate the ability of applicants to pay their debts is through their bankruptcy score. Your bankruptcy score determines your possibility, as a potential borrower, to file for a bankruptcy.

Sylvia Bronner, spokesperson of Citizens, said that a bankruptcy score is one of the many factors that are considered to assess the credit-worthiness of a borrower. Citizens not only use the credit scores of borrowers but also their bankruptcy scores to aid in the decision of what loan to give and to decide whether or not to issue credit cards.

Anthony Sprauve, spokesperson for Fair Isaac Corp. (Fico), said that a bankruptcy score is an instrument for lenders to distinguish borrowers who have a high probability of bankruptcy. Fico is the top third-party provider of credit, bankruptcy and other scoring systems.

In addition, Sprauve said that over 90 of the nation’s 100 biggest banks use the Fico scores.

Similar to a credit score, a bankruptcy score provides an assessment of a loan applicant’s payment and delinquency history, credit amounts, number and types of credit, and so on. However, a larger weight is given to the current debt load of the applicant.

Based on information from finance experts, bankruptcy scores have been present for more or less 20 years already, but it is usually hid from consumers’ view.

According to Scott Dressler, associate professor of economics at Villanova School of Business, depending on who produces the bankruptcy score, it may have a scale from 1 to 800 or from 50 to 950 or from 1 to 300. The higher the bankruptcy score, the more credit-worthy the applicant is.

Barry Robinson, executive vice president of consumer banking said that bankruptcy score are usually used by bigger lenders who make automated, less judgmental decisions and by credit card companies who handle a large scale of unsecured credit.

Tips on How to Dispute Errors on Your Credit Report

Your credit score determines the terms on your mortgage, auto loans, or credit card. Any erroneous information will either result to rejection of your application or a higher interest rate. It is important to take corrective actions about these errors and the following are some tips on how to do so.

If you discover an error, the first thing you should do is to determine its degree of seriousness. Examples of serious errors are credit accounts you never opened, and overdue payments or bankruptcy you never had.

Next, if the error is serious, file a dispute with the credit reporting agency. Moreover, if there are errors on more than one of your credit reports, then file a dispute with every credit reporting agency. You can file a dispute either online or by mail.

According to credit experts, while online is the easiest, it is not the best way, particularly if the error is recurring. If you choose to file online, you should classify your dispute by picking from a pull-down menu and not given the chance to provide an explanation. In contrast, filing in writing allows you to explain the whole situation and also attach copies of supporting documents.

The credit reporting agency then investigates by asking the creditors whether the erroneous information is correct or not, generally within a period of 30 days. If the information is confirmed to be erroneous or the creditor fails to respond within the given period, then it will be removed on all your credit reports.

However, if your efforts failed, you can try filing a dispute again directly with the creditor. Most of the time, creditors are responsible for the errors in the credit reports and not the bureau.

Your last option would probably be to hire an attorney, especially if you cannot persuade the creditor to amend the error.

A Guide on How to Repair Your Credit

To compute your credit score, points are added when you make on time payments and points are subtracted when you pay late. Some other things that can have a negative impact on your credit score include large amounts of debt, making minimum or zero payments, repossessions or filing for bankruptcy. The following is guide on how you can repair your credit.

One way to remove the debts on your credit report is to file for a bankruptcy, which results to a clean slate in terms of your debt. Moreover, you will no longer have debts, and no longer lose points due to those debts and late payments. However, only a few creditors check the actual credit report.

Although you will lose points for filing a bankruptcy, it is not like having a large amount of debt where you lose points every month. For this reason, a few people consider filing for bankruptcy as a way to rebuild your poor credit.

In contrast, you can build positive information in your credit report by paying your current accounts on time or even before due. Paying on time also means having enough money available. To be able to have available money, you must also modify your spending habits or lifestyle.

Your credit score is a number that is somehow an assessment of your ability to pay your debts. In fact, paying off a small account will earn you as many points as making your monthly payments.

Contrary to belief of some people, repaying delinquent debts will not increase your credit score. It will even decrease your credit and remains in your report relative to the date of your last payment, unless you can eliminate it by discussing with the creditor.

In addition, marriage does not have any effect on your credit score. However, if you apply for credit as a couple, the person with poor credit will harm the one with good credit. It is recommended to wait for the completion of the repair process and not apply for joint credit.

Need Car Insurance for Bad Credit?

Do you happened to have bad credit and was wondering how you can get your car insured? Well, fret no more, for this article will help supply you with what you need.

If you were caught in an accident and you need an insurance to cover for damages then the PLPD is for you. PLPD stands for Partial Coverage Car Insurance, this does not include the vehicle’s damage it itself.

Aside from the PLPD, there is also the Full Coverage Car Insurance which adds crash and complete damage coverage to your car. The other areas included in this contract are the actual damage that the vehicle caused to itself. If you want it to be more wallet-friendly it is available in different deductibility levels. If for example you had a $2000 worth of damage to your car and you have $500 deductibility collision policy, then you will pay $500 for the damage and the insurance will cover the rest. However if the damage is less than the deductibility cost then you will have to pay for the whole damage. If you have a high deductibility then your insurance premium will be lesser.

What do you need now? For all car loans even without auto loans, financial institutions will need full coverage car insurance. The minimum requirements will be taken care of by the company, and which kind of deductible will be up to the buyer. The company that will handle the insurance will also depend on the choice of the costumer.

According to a recent study, customer satisfaction will depend upon five factors. These are the interaction of the salesman, the price they will set, the policy offerings, billings and how they should pay for the contract, and the claims of the costumer for damages.

In the end of the day, customers should be led to the right path in finding the right company to trust for their car insurance. These companies should be perfect for the type of customer in order to properly suffice their needs and their budget.

Shadow of Credit Crunch Lingers

Dubai’s starting to recover from the its old debt fiasco, but the local legislators and rating agencies are still not taking the risk on reopening its doors to Arabia Gulf’s cheap credit lending.

The current bad debt liabilities of the United Arab Emirates currently totals at Dh1.7 billion, that is $16.79 billion in the US currency this is according to the data of the Central Bank. The financial institution is currently strengthening its early-warning systems to avoid repeating the same economic problems from arising.

Standard & Poor ratings agency has already added the number of their employees in the Dubai. Other financial institutions are now calling for more qualified credit analysts to aid them with their jobs.

The Arabian Gulf has incurred a $26.1bn worth of bonds that has contributed to the growing demand for credit ratings. Maijid Al Futtaim Holding and other similar companies are now trying to take baby-steps into the Islamic industry’s bonds.

According to the S&P’s regional managing director, Stuart Anderson, the company is currently trying to increase the number of workers that they are sending out from Europe. They have also sent out many analysts from different countries such as Paris, London and Frankfurt. The number of workers they had in their branch based at Dubai only involved three people in 2007, but has increased to over 24 employees in the beginning of this year. Most of these workers are ratings specialists.

The ratings agencies are also giving out hazard signals that the number of uncollected debts is still not clear indications of the financial reality. There could still be a hidden warning though about these accounts if they remain unsolved.

Ratings agencies such as S&P and Moody’s Investors Service, have been giving out these warnings of the reemergence of a global economic crisis from renegotiated problem loans. The Central Bank however has taken effort to protect the UAE banks from the financial shocks that may occur these past few months, as they try their best to regulate the flow of the cash.