Free Credit Frequently Asked Questions (FAQ) | Credit Answers

This section features a compilation of questions that are commonly asked by consumers about credit scoring and credit management. These briefs come in handy when you need immediate answers for your credit issues.

If you still have questions that is not listed here, please feel free to contact us at 1-888-491-2001 or if we are online, chat with us live.

Join Our New Web Blog!
Have a Comment or Question?

Join Our Client Web Blog Now!

Credit Score Questions
What makes my credit score go down? [View]
What happens to my credit if I get a divorce? [View]
How do credit inquiries affect my credit score? [View]
How do I choose a good credit card for me? [View]
What are some tips to manage my credit cards? [View]
What's in my credit report? [View]
What is my FICO score? [View]
What can I do to improve my chances when applying for a mortgage loan? [View]
How do I get a free copy of my credit report? [View]

Credit Repair Questions
How can I build good credit? [View]
What do I do if creditors harass me? [View]
What are my rights when it comes to debt collection? [View]
What can I do to improve my FICO score? [View]
What do I do if I have a judgment against me? [View]
What are the laws regarding credit? [View]
How do I validate my debts? [View]
Can I fix my bad credit? [View]
Is it a good idea to go to a credit repair agency? [View]
How long can negative items and old debts stay on my credit record? [View]
What is the real cost of bad credit? [View]
How do I contact the three credit bureaus? [View]

Bankruptcy
What happens to my credit after a bankruptcy? [View]
Can I establish credit after I have declared bankruptcy? [View]

Identity Theft
What is identity theft, and how do thieves get my information? [View]
How can I protect myself from identity theft? [View]
How do I know if someone has stolen my identity? [View]
Are there laws to protect me when it comes to identity theft? [View]

Credit Score Questions

Q: What makes my credit score go down?
A: There are many things that affect your credit score negatively. Missing or late payments, having too much credit, or constantly applying for credit are some of the common things that affect your score in a negative way. For a detailed explanation of what exactly lowers your score take a look at: 30 Reasons Why Your Credit Score Is Too Low.
[Back to Top]

Q: What happens to my credit if I get a divorce?
A: Divorce can be a painful and confusing time. If you share accounts with your spouse, you are still financially responsible for them after your divorce. You have to close the joint accounts you share and remove your spouse from your individual accounts in order to separate them from your accounts. A legal decree of divorce does not automatically remove them from your accounts. For more information about how divorce can affect your credit take a look at: Credit and Divorce.
[Back to Top]

Q: How do inquiries affect my credit score?
A: There are two types of credit inquiries. Only some of them actually affect your score. Inquiries that stem from your voluntary request for new credit are factored into your FICO score. However, credit checks by potential employers, involuntary credit inquiries conducted by businesses that want to offer you something, and self-checks of your credit report do not harm your score. For more information take a look at: Learn the Facts About Credit Inquiries.
[Back to Top]

Q: How do I choose the credit card that's right for me?
A: There are many types of credit cards out there, and each has a different set of terms and conditions. You should know what you want to use your card for, then consider which card best suits your needs. Some things to consider are annual fees, APR, delinquency fees and the cost of balance transfers or cash advances. For more information take a look at: Overwhelmed with Credit Card Offers? How to Choose the Right Card for You.
[Back to Top]

Q: What are some tips to help me manage my credit cards?
A: Credit cards are one of the biggest pitfalls for people. They are accepted everywhere, and they are fairly easy to obtain. It is not hard to rack up huge amounts of credit card debt. To prevent this from happening to you, or to keep it from happening again, make sure you limit the number of credit cards you have. Only one or two all-purpose cards are necessary. Try not to carry a balance, and if you do have to, carry no more that 30% of the limit on the card. Also, do not purchase anything that you cannot pay off within 90 days. For more tips on how to keep yourself out of credit card debt take a look at: Using Credit Cards Wisely.
[Back to Top]

Q: What's in my credit report?
A: Your credit report contains your personal identifying information, such as your name, address, Social Security Number and employment information. It also contains information on all of you accounts of credit, payment information, the types of credit you have and any public record of judgments, bankruptcies or liens. To find out more about what's in your credit report take a look at: Inside Your Credit Report.
[Back to Top]

Q: What is in my FICO score?
A: Your FICO score is broken down into five categories, and each category accounts for a specific percentage of your score. Knowing what factors weigh the most will help you manage and maintain a higher score. Here's how the percentages break down. 35% - Payment History 30% - Amounts Owed 15% - Length of Credit History 10% - Types of Credit 10% - New Credit For more information about how your credit score is computed take a look at: What's In Your FICO Score.
[Back to Top]

Q: What can I do to improve my chances when applying for a loan?
A: There are certain things you should, and shouldn’t do, when applying for a loan. For example, you should definitely keep up on your payments. You shouldn’t close any unused credit cards or apply for a bunch of new credit while in the loan process. For more information, ask for our Fact Sheet: The Top 10 Dos and Don'ts During the Loan Process.
[Back to Top]

Q: How do I get a free copy of my credit report?
A: Obtain a copy of your credit report from all three credit bureaus by contacting Annual Credit Report Request Service. Each bureau is required to provide a free copy to you upon your request once every 12 months, but only through this service. To order your free copy, visit www.annualcreditreport.com, call 877-322-8228, or write to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta , GA , 30348-5281.

Credit Repair Questions

Q: How can I build good credit?
A: There are a lot of things you can do to build good credit. Applying for one or two all-purpose credit cards, keeping a low or zero balance and paying bills on time are key to establishing good credit. For more ways to build good credit, and to see what good credit can do for take a look at this: How Do I Build Good Credit and What Your Credit Score Can Do for You.
[Back to Top]

Q: What do I do if creditors harass me?
A: You have the right to stop creditors from making threats and harassing you at home and work. The law says that debt collectors cannot hassle you once you have sent them a letter requesting they cease and desist. For more information take a look at: If Creditors Harass You.
[Back to Top]

Q: What are my rights when it comes to debt collection?
A: You have the right not to be harassed. There are restrictions on where and when debt collectors can call you. Your debt has to be verified by the debt collector. For more information about your rights, ask for our Fact Sheet: Your Rights Regarding Debt Collection.
[Back to Top]

Q: What can I do to improve my FICO score?
A: Know exactly what is in your score. Look at how certain factors are weighed and focus on the biggest ones first. Slowly and surely, by improving these factors, you will be able to raise your score. For more information, ask for our Fact Sheets: How to Improve Your FICO Score and What's In Your FICO Score?
[Back to Top]

Q: What do I do if I have a judgment against me?
A: If you have a judgment, the best thing to do is to pay off the debt as soon as possible. Also, try to negotiate with your creditors for a better interest rate or more favorable payment terms. And remember, just because you have a judgment against you, it does not mean that you cannot repair your credit. To find out more about judgments, ask for our Fact Sheet: Judgment Strategies.
[Back to Top]

Q: What are the laws regarding credit?
A: There are laws in effect that specify your rights regarding billing, debt collection, discrimination in credit applications, and how your credit is reported. The credit bureaus and creditors are governed by these laws to ensure your rights are protected. To find out more about credit laws, ask for our Fact Sheets: Powerful Credit Acts and Your Rights Regarding Debt Collection.
[Back to Top]

Q: How do I validate my debts?
A: Validation of debt is an important request you can make to arrest creditor’s from harassing you and it can erase erroneous debts or debts for which the creditor cannot prove you owe. There is a very specific process to validate your debts. You must contact the credit bureau and the creditor and provide copies of any supporting documentation you may have. To find out more specific information on how to validate your debts, ask for our Fact Sheet: Validation of Debt.
[Back to Top]

Q: Can I fix my bad credit?
A: Yes, you can. Start with the basics. Order all three of your credit reports and all three of your credit scores. You are entitled under the law to a free copy of your credit report-from all three credit bureaus-each year when you order it from Annual Credit Report Request Service. To order, visit www.annualcreditreport.com, call toll-free 877-322-8228, or complete the Annual Credit Report Request Form and mail it to:

Annual Credit Report Request Service
P. O. Box 105281
Atlanta, GA 30348-5281.

Scan your report for any errors. Is there an account on there that you didn't apply for? Is there a company reporting a debt that is inaccurate? Are all of your credit card limits reporting? If there are any errors on your report, no matter how small, they can lead to big problems and inhibit you from obtaining credit and even keep you from getting the interest rate you deserve on your mortgage or refinance. For more information on how to rebuild your credit, ask for our Fact Sheets: Repairing Your Credit, How Do I Build Good Credit, How to Improve Your FICO Score, and The Cost of Bad Credit.
[Back to Top]

Q: Is it a good idea to go to a credit repair agency?
A: If you are ready to purchase a home, or refinance your existing loan, and you feel that the credit challenges you are facing are too much, and that you do not have the time to do the work and follow-up necessary, then it is a good idea to seek professional help. Yes, there are companies out there who have given the repair industry a bad name, but just like attorneys, doctors, and many other professional industries, there are legitimate credit remediation firms that can help you. If you would like to get in touch with someone about your credit, please give me a call and I will refer you to a reputable company that I trust. For more information about credit repair agencies, ask for our Fact Sheet: Avoid Credit Repair Scams.
[Back to Top]

Q: How long can negative items and old debts stay on my credit record?
A: The Fair Credit Reporting Act (FCRA) requires that most negative credit items be deleted from your credit bureau file in no more than seven years, except for bankruptcy, some tax liens and judgments (public records) which can be reported for up to ten years. These are the time limits for reporting negative credit. The creditor or the credit bureau can choose to have the negative credit information deleted whenever they please. Inquiries may remain on the credit report for up to two years. Don't let this discourage you. You can start rebuilding your credit at anytime, and if you stay current on your payments and balances, your score can get better even after a bankruptcy. For more information, ask for our Fact Sheet: Charged-Off Debt and the Seven-Year Rule.
[Back to Top]

Q: What is the real cost of bad credit?
A: Bad credit can be extremely expensive. It can mean you have high interest rates, making the cost of your debt much higher than it should be. It can also mean hundreds of thousands of dollars more when financing a home. Here is an example of how much you can save on a $300,000 30-year, fixed rate mortgage by improving your score.

720+ FICO Score: $1,818 Monthly Payment & $354,405.
Under 620 FICO: $2,477 Monthly Payment & $591,543.

If your FICO score is currently below 620, you could save the following amounts by INCREASING YOUR SCORE:
* If your score improves to 720-850, you could save an additional $318,329 over the life of the loan.
* If your score improves to 700-719, you could save an additional $300,026 over the life of the loan.
* If your score improves to 675-699, you could save an additional $254,956 over the life of the loan.
* If your score improves to 620-674, you could save an additional $154,896 over the life of the loan. (The chart above is produced by myfico.com and the rates shown are averages based on thousands of financial lenders, conducted daily by Informa Research Services, Inc., and are examples only.)

To see a quick breakdown of exactly what bad credit may be costing you, ask for our Fact Sheet: The Cost of Bad Credit.
[Back to Top]

Q: How do I contact the three credit bureaus?
A: Here is the contact information for each of the three main bureaus:

Equifax Credit Information Services, Inc.
PO Box 740241
Atlanta, GA 30374
(800) 685-1111
www.equifax.com

TransUnion
2 Baldwin Place
PO Box 2000
Chester, PA 19022
(800) 888-4213
www.transunion.com

Experian, NCAC
PO Box 9595
Allen, TX 75013
(888) 397-3742
www.experian.com

Bankruptcy

Q: What happens to my credit after a bankruptcy?
A: Your credit report will reflect your bankruptcy, and it will limit your ability to obtain new credit. It is important to check your credit after a bankruptcy so that you can make sure that everything was included when you filed. Each item included the bankruptcy should be listed as “included in BK.” If it doesn’t, you should remedy it immediately as it will appear to creditors that you still have past due accounts. For more information about the effects of bankruptcy, ask for our Fact Sheets: Credit and Bankruptcy, and New Bankruptcy Law - Learn How it Affects You.
[Back to Top]

Q: Can I establish credit after I have declared bankruptcy? A: Yes! Bankruptcy is not a black bar on your record that prevents you from ever being able to obtain credit again. You can apply for secured credit to get back on the road to financial fitness. For more information on how to bounce back from bankruptcy, ask for our Fact Sheet: Coming Back from a Bankruptcy.
[Back to Top]

Identity Theft

Q: What is identity theft and how do thieves get my information?
A: Identity theft is when someone steals your personal information, such as your Social Security Number or bank account number, and uses it to commit fraud or other crimes. Often, thieves use this information to obtain, and abuse, credit in your good name. There are a variety of ways in which thieves steal your information, such as mail theft, stealing documents that contain private information from your home, and through phishing scams on the Internet, where a pop-up window or an e-mail shows up asking you to “verify” your account information. For more information about identity theft, ask for our Fact Sheets: Guarding Against Identity Theft and Don't Get Caught in a Phishing Scam.
[Back to Top]

Q: How can I protect myself from identity theft?
A: Start by protecting your personal and financial documents at home. Many times, an identity theft is someone who knows or is related to the victim. File personal documents, shred unwanted documents that contain private information, never give your personal information out unless you have initiated a request for credit or services which require the information, mail checks from a post office or a U.S. mailbox, and safeguard your home computer by changing up your passwords, and purchase virus-protection software and a firewall. For more information on how to minimize your risk for identity theft, ask for our Fact Sheets: Guarding Against Identity Theft and Don’t Get Caught in a Phishing Scam.
[Back to Top]

Q: How do I know if someone has stolen my identity?
A: You may be getting several credit card offers in the mail, like more than five a week. Your account passwords may suddenly stop working. You may get turned down for credit you’re sure you qualify for. You should order a copy of your credit report to see exactly what’s in it. That way you can be sure whether or not someone else has been using your name to obtain credit. For more information, ask for our Fact Sheets: Guarding Against Identity Theft and What to Do if You’re a Victim of Identity Theft.
[Back to Top]

Q: Are there laws to protect me when it comes to identity theft?
A: Yes. Under the Fair Credit Reporting Act, you have certain rights to help you minimize your risk and recover from being a victim of identity theft. Some of these rights include placing a fraud alert in your credit report, having the right to free copies of your credit report to monitor for any illegal activity, and you have the right to remove and block negative information from your report that resulted from identity theft. The Fact Act was added to the Fair Credit Reporting Act to increase your protection, as well. It regulates lenders, forcing them to disclose to you any negative information they report about you in your credit report. For more information, ask for our Fact Sheets: Your Rights Regarding Identity Theft and Identity Theft and the Fact Act.
[Back to Top]