When people complained about errors on their credit reports last year, the big three credit-reporting agencies provided relief in just 2% of cases monitored by the feds - compared with 25% in 2019, according to the latest report from the Consumer Financial Protection Bureau.

The report said Equifax, Experian and Transunion often failed to respond substantively to an error, especially if the consumer hired a third party, such as a credit-repair company or law firm. John Heath, directing attorney at Lexington Law, specializes in credit cases and said unresolved errors can keep people from buying their first home or car - and even from getting a job.

"Potential employers are looking at credit reports as a way to determine whether somebody is going to be a good fit," he said.

Heath would like to see Congress change the Fair Credit Reporting Act to require credit-reporting agencies and companies that offer credit terms to respond to third-party inquiries. The three credit-repair agencies did not respond by deadline to a request for comment.

The Rev. Andre Chapple, senior pastor at Faith Church Los Angeles and chief executive of the African American Empowerment Coalition, said problems with credit block many people from building wealth as homeowners, and many aren't sure where to turn for assistance.

"We help people to understand that whole ecosystem of credit and credit responsibility," he said. "We help them get free credit repair for three months. As a result, their credit scores are increasing significantly."

Consumers submitted more than 700,000 complaints to the CFPB about the credit-reporting firms from January 2020 to September 2021, which is more than half of all complaints the bureau received.

Payments on buy now, pay later (BNPL) loans will be added to credit reports in the coming year. That’s good news for some good consumers, but others should be careful.

The loans, which typically allow customers to pay for purchases in four equal installments rather than all at once, have exploded in popularity over the past few years, and are expected to keep growing. Equifax, one of the three main U.S. credit bureaus, announced earlier this month that it will begin recording these installment plans on reports in early 2022.

Currently, some BNPL companies do report some loan information to certain credit bureaus. Affirm, for example, reports some loans to Experian. But Equifax will add BNPL information for the first time.

The bureau says this will give lenders “a fuller picture of people’s financial commitments, like how much they owe on these plans,” and it notes that including on-time BNPL loan payments on a credit report could potentially increase consumers’ credit scores.

But by the same token, missing these payments would also potentially lower a consumer’s credit score, just like missing a credit card payment does now.

BNPL loans, also called point-of-sale loans because they are typically offered at checkout, are relatively easy to qualify for, and they don’t typically require a hard credit pull. That makes them especially popular among younger consumers, who either don’t have a credit history or are distrustful of the credit industry.

That’s one reason Equifax says including on-time payments in credit reports could help those younger consumers, who have easier access to BNPL loans than other types of credit, build their credit history

But there are a few issues credit agencies and BNPL companies like Affirm and Afterpay will have to work out. These types of loans are typically short — repaid within a few weeks — and consumers can open and close multiple BNPL loans at the same time. That could be a potential problem, given that the average age of accounts and how long it’s been since you opened a new account are part of a credit score’s calculation.

Additionally, there is often a lag between when people open an account and when it appears on their credit report, so consumers could repay something before it appears.

That said, if paid off on time, BNPL payments added to credit reports could boost scores for those with thin credit histories.

If you’re taking out a BNPL loan, make sure you can pay it back.

“Just because you qualify for BNPL, or any other credit product, doesn’t mean you should use it,” says the Consumer Financial Protection Bureau.

Source: https://www.cnbc.com/2021/12/31/equifax-is-adding-buy-now-pay-later-payments-to-credit-reports.html

With a new year often comes new financial goals. Many experts suggest raising your credit score may be a worthy goal to have.

Much like your blood pressure or cholesterol level suggests your physical health, a high credit score indicates positive financial health. A high number means your bank account is healthy.

Although it can be uncomfortable to talk about, Nerd Wallet’s credit card expert Sarah Rathner says getting your score as high as possible should be at the forefront of everyone’s mind.

“Having good or excellent credit literally opens so many doors in your life,” Rathner said.

The closer your credit score is to 850, the better your opportunities are. 850 is the best possible credit score you can have.

The number one way to raise your credit score? Simply pay your bills on time every month. That doesn’t just include your credit card bill. Even your utility bill and rent can be reflected on your credit report.

Rathner says not only will you save money and avoid late fees, but your score can drop up to 100 points if you’re more than 30 days late paying your bills. “They say in business, ‘it takes years to get a customer and a second to lose one.’ It’s kind of like that with your credit score, it can take months to raise your score, and just one late payment to drop it back down to where you started,” said Rathner.

Another tactic is not to spend more than 30% of your available limit across your credit cards. For example, if you have a credit card with a $10,000 limit, try to cut your spending to $3,000 at a time. Better still is keeping your debt below 10%.

“If you have a lot of debt relative to how much money you earn, that can hurt you. Not only it can hurt you in terms of your credit score, but when you’re trying to borrow money, taking out a loan to buy a car to buy a house,” Rathner said. “Lenders look to see how much debt you have relative to your income because they want to make sure you’re not already in over your head before they decide to lend you more money.”

Having a credit card for an extended period of time can also help increase your credit score. So, if you happen to pay off your card with a small limit, Rathner says not to close or cancel it. Instead, put a small monthly bill on it and pay it off.

Now, Rathner understands that they may sound overwhelming and may take some time, but she says it will help in the long run. “Be patient. It can take a few months to see the positive results come through on your credit score. So stay the course. And don’t get discouraged because what you’re doing has meaning, and it will make your life easier,” said Rathner.

Another reason to raise your credit score might be to get a job. Some employers check your credit score when you apply.

Source: https://www.winknews.com/2022/01/11/ways-to-raise-your-credit-score-and-why-it-matters/

Big Three U.S. Credit Reporting Agencies Continue to Offer Free Weekly Credit Reports to Consumers Amidst Pandemic and Economic Uncertainty

ATLANTA & COSTA MESA, Calif. & CHICAGO--(BUSINESS WIRE)--The three nationwide credit reporting agencies – Equifax (NYSE: EFX), Experian (LON: EXPN) and TransUnion (NYSE: TRU) – are taking joint action to extend the pandemic response service offering free weekly credit reports to consumers through the end of 2022. This benefit will continue to help consumers across the country manage their financial health during the ongoing hardship and economic uncertainty caused by COVID-19.