While the roots of the modern credit report can be traced all the way back to 1898, the numerical credit score wasn’t devised until the 1950s and didn’t become a major part of the American financial system until the last twenty years. In 1956, Bill Fair and Earl Isaac devised analytical tools that attempted to quantify the risk of loaning an individual money and launched a company based on this scoring system. Their company was called Fair Isaac & Co., better known by the acronym FICO. After several decades of success in Europe, FICO’s system caught on in the United States beginning with Equifax in 1989 and continuing with the other two major credit bureaus, Experian and TransUnion, in 1991. Since then, the now-familiar three digit score from 300 to 850 has become an integral part of the American credit system. [click to continue…]

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Credit Tip: What Is Validation of Debt?

February 8, 2011

Question
What is validation of debt?
Answer
Validation of Debt (VOD) is the single greatest tool you can use to deal with collectors. What it means is that you have 30 days from the time a collection agency contacts you to ask that certain documentation be provided by the collection agency to validate the debt. If the agency [...]

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How Loan Modifications are Affecting Credit Reports and Scores

April 27, 2010

Just over a year ago, the Obama Administration’s $75 billion mortgage modification program went into effect, a response to the first year of “The Great Recession,” where nearly two million Americans lost their homes through foreclosure, short sales, and deeds in lieu of foreclosure. An effort to rescue homeowners teetering on the brink of disclosure, [...]

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Recent Changes in Credit Scoring and Reporting and How They Affect You

January 30, 2010

The many factors that go into determining a credit score can seem complicated and daunting, and it’s taken a while for most consumers to get up to speed about how their use of credit affects this score. But just when you thought the credit score reporting process couldn’t get more confusing for consumers, some major [...]

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The Truth About Bankruptcy & Credit

January 30, 2010

A bankruptcy is reported on your credit report as a public record, and there is no doubt that your scores will drop anywhere from 100-300 points when it first hits, depending on how many points you still have to lose in your payment history factor. Keep in mind, by the time you have filed bankruptcy [...]

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The 5 Biggest Credit Mistakes & How You Can Avoid Them

January 29, 2010

Imagine spending a third of a million dollars more than someone else just because your credit score wasn’t as high as theirs. Unfortunately, it happens all the time. Consumers feel like they get backed into a corner to pay more because their credit score falls within a range that is not high enough to qualify [...]

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Credit Myths That Put Your Score At Risk

January 29, 2010

It seems everywhere you look, some program or Web site offers credit fixes, offers and deals that make it seem so easy to consolidate debt or, worse, get “easy credit” to buy the things you need. They offer “free credit analysis”-many of which will most likely lead you down a path of credit destruction. Most [...]

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It’s Never Too Late to Improve Credit Scores

January 29, 2010

Many of my clients come to me for assistance in helping them clean up damaged credit scores even though they already own a home. They know that improving their credit scores will save them money on many things such as car insurance, automotive loans, or any other type of loan. The goal is to secure [...]

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