Credit

Credit Reports can have an affect on your home search.  The more you know, the better

What is a credit report?

Your credit report includes information about your experiences and history with credit and finances. It usually includes the number and type of accounts that your have, your payment history on these accounts and if you were on time or late, collection actions, your debt and available credit, and how old your accounts are. Your credit report also has personal information including your employment history and social security number.

Why is my credit report important?

  • Banks, landlords, employers, and others can reference your credit report to help their decision in working with you or doing business. Having good credit can help you secure better interest rates for loans, mortgages, and insurance, which will save you money in the long run. 
  • Good credit can also help you get access to additional credit and give you an edge above other people who are competing for employment. Bad credit can be the reason you're denied a loan, place to live, or even a job.
Where can I get my credit report
Consumers are entitled to a free copy of their credit report once a  year from each organization. 

What are the credit agencies who compile credit reports and scores? The three major credit reporting agencies are listed and linked to their websites below:
What is a credit score?
Your credit score is like a grade for your credit report. It's "graded" on your payment history, the amount of debt that you have, how long your accounts have been open, any new credit lines, and the types of accounts that you have. There are several different credit agencies that calculate credit scores and they all use different scales and ratings. Your scores may be different depending on the organization.

What if my credit report isn't accurate?
You, as a consumer can dispute negative information with the credit reporting agencies and if the information is invalid or outdated, it must be removed within 30-45 days of your request. If you need to review your consumer rights, the Federal Trade Commission has information on their website.

What’s the Difference Between a Hard Credit Check and a Soft Credit Check?
 see here

Credit awareness is for renters
    GO BankingRates is a great resource for consumer financial advice. Once upon a time, renters could pretty much ignore their credit reports unless they were planning to buy a house. But with the expansion of credit screening by landlords (even mom & pop operations) having credit and keeping a clean record could mean the difference between living in a safe and decent rental home...or a place where the landlord ignores repairs and depends on "bad" tenants who have few choices. 
    All that to say: here's another credit advice column that you may review, adapt or save for your program participants. There's some good ideas and insights here. One example: "When you check your credit report, make sure it’s accurate. This is vital to raise your credit score quickly. Many consumers find errors on their credit reports, from misspelled names and wrong addresses to credit cards they never even opened. Don’t let an error bring your score down; correct it immediately."
 
What's news?

July 2, 2017 Columbus Dispatch Credit where credit is due
Dispatch reports: "The hammer that a coalition of 31 state attorneys general lowered on the three national credit-reporting agencies two years ago now is likely to provide its biggest benefit to consumers. As of Saturday, Equifax, Experian and TransUnion no longer are allowed to place tax liens and civil court judgments on consumers’ credit reports without guaranteeing that the debt belongs to the consumer. And beginning in September, the agencies cannot place unpaid medical debt on a credit report until it’s at least six months old. As many as 12 million consumers could see an improvement in their credit scores with this information — which often is wrong — erased from their reports. Not a single court in the country sends tax liens or judgments to the credit-reporting agencies. Rather, the agencies hire third-party vendors to scour court records and report that information to them.
     Two grains of salt. 
1. Liens and judgments that are already on a credit report won't automatically disappear--it will take a while to implement. Maybe consumers can speed the process by challenging bad info?  
2. This new policy only affects the three credit bureaus. Databrokers who often sell info to landlords are not bound by this settlement. 

January 5, 2017 How to Dispute Credit Report Errors
Go Banking Rates features a story on cleaning up credit report errors. "Creditors regularly provide a staggering amount of information about you and your financial history to credit reporting agencies, also known as credit bureaus. Unfortunately, due to human error or technical problems, credit report errors can occur, and it’s up to you to fix them. Mistakes can include incomplete or incorrect information about your name, addresses, employers, credit accounts, balances or payment history. In addition to errors in your information, you could find that someone else’s financial history got mixed up with yours, such as if you have a similar name. Credit report errors are not just an inconvenience. “A creditor’s error in applying a payment to your account could cause it to appear as past due,” said Barry Paperno, a FICO credit expert and writer at SpeakingOfCredit.com. “This delinquent status can then be reported to the credit bureaus and included in your credit reports.”

October 22, 2016 New credit score system could include missed rent payments.
     Toledo Blade offers a primer on the new FICO scoring system. Most interesting is the addition of rent payments to the mix that makes up a credit score. This reflects the fact that more and more landlords are using credit reports as a screening tool. 
     The change is a double edged sword for tenants. Taking account of timely payments could help low income renters develop a credit history; but if the landlord reports missed payments, that could hamper future housing choices.
October 8, 2016 NLIHC reports on Bipartisan Credit Reform Bill
     National Low Income Housing Coalition reports "The House Financial Services Subcommittee on Financial Institutions and Consumer Credit considered legislative proposals to help consumers, particularly those with low incomes, gain more access to mainstream banking and credit services during a hearing on September 27. One of the proposals discussed was the “Credit Access and Inclusion Act of 2015” (H.R. 4172) that would allow landlords, including public housing authorities (PHAs), and utility and telecom companies to report on-time payment data to credit reporting agencies, not just negative payment data. Introduced by Representatives Keith Ellison (D-MN) and Mike Fitzpatrick (R-PA), the bill seeks to help those with little to no credit build their credit scores based on a more comprehensive picture of their payment history."
     Good news: bill would rewards low income households which have good money management skills, but...
     Bad news: Many low income households experiencing housing and income instability could be further disadvantaged in employment and homesearch.
      Story includes links to the hearing. 

September 20, 2016 Free Money...Not really, but...
     An article in Go Banking Rates deserves a scan. There are some ideas about where to look for emergency and long term housing assistance.
     The downside of good advice is that no one ever needs it until there's a crisis. That's often too late! 
     What are your suggestions for 
a. cultivating emergency resources in your community and
b. educating tenants to understand the warning signs of household instability and ask for help early in the process.
Send your ideas to communitymanager@rhinohio.com

Fixing a faulty credit record is not simple
      Bobby Ally has written an insightful look into one tenant's home search made more complex by erroneous credit reporting. Here's the basic story: "Apartment hunting in Philadelphia is already hectic enough. So relief washed over me when my girlfriend and I found a charming spot that worked for us. But before I was able to sign the lease, I received a call from the landlord, and he spoke slowly. He seemed concerned, and for good reason: After running a tenant screening on me using a service provided by the credit-reporting behemoth TransUnion, a clutch of criminal offenses appeared, including two felony firearms convictions. He said it didn’t seem to square with what he had expected from a public-radio reporter moving from one trendy neighborhood to another. It didn’t. I have never owned nor fired a weapon in my life. The other charges the agency listed were equally baffling, since they were just as fictitious. A case of mistaken identity, I thought, should be easy to clear up. I was wrong. It took me more than a dozen phone calls, the handiwork of a county court clerk and six weeks to solve the problem. And that was only after I contacted the company’s communications department as a journalist."
      A case coming out of Seattle Washington reveals a small victory for a couple who were denied housing by a tenant screening company back in DATE. When the Hanlin's applied for a rental unit in Seattle they were denied because of a past eviction record. Like good shoppers, they went to the expense of gathering up their evidence and sent it back to the tenant screening agency which made the correction, but then the On-Site Manager (the screening company) recalculated their "renter score" (kind of like a credit score) and the Handllns again failed to qualify for the apartment. That's when the brought a complaint under Washington State's version of the Fair Credit Reporting Act. After two years of no answers from On-Site, the State Court found in favor of the Handlins, awarded monetary damages and injoined the tenant screening company from continuing to disobey the law. Erroneous records that go uncorrected.


Credit report basics
Credit reports are the new "go to" screening tool for many landlords. That's because in a "hot" rental market, a quick credit report screen can reduce the number of potential applicants instantly. Think of credit reports as a "screening out" tool. Maybe now you need to pay closer attention before they start looking for a place to rent.
How to Check Your Credit Score
What’s the Difference Between Investigative Consumer Reports and Credi t Reports?
5 Surprising Things You Could Find on Your Credit Report
posted October 25, 2016

New FICO scores can include rent payment history
     Toledo Blade offers a primer on the new FICO scoring system. Most interesting is the addition of rent payments to the mix that makes up a credit score. This reflects the fact that more and more landlords are using credit reports as a screening tool. 
     The change is a double edged sword for tenants. Taking account of timely payments could help low income renters develop a credit history; but if the landlord reports missed payments, that could hamper future housing choices.

posted October 22, 2016
                           

1 in 10 in US is "Credit Invisible"

Sheryl Harris in the Cleveland Plain Dealer notes that "Employers sometimes look at credit reports when deciding whom to hire or promote. Landlords may use credit reports to decide whether to rent to a tenant. Some insurers use credit reports when they set rates for home insurance." Studies show that poor credit early in adulthood can become a self fulfilling prophecy. Providing timely rental payments to credit reporting agencies could be a simple way to get low income households out of this credit gap and into the mainstream economy.
read the story here

New formula to help those without credit score
     As first reported by The Wall Street Journal, the firm will use information on payment history for cellphone bills, cable service, gas and electricity provided by Equifax to calculate a credit score for those consumers. It also will use public-records information from LexisNexis Risk Solutions to pull information on a person’s property and details on how long they’ve lived at a particular address.
      Generally, staying longer at an address might be viewed as a sign of stability and can be used as a gauge for whether that person is keeping up with rent payments. The goal is to bring in more “ positive” data that might not show up on a credit report the way foreclosures and property liens do, said Ankush Tewari, who manages the credit-risk business for LexisNexis. More here

Major credit agencies agree to changes sought by advocates
NEW YORK — The three largest credit-reporting agencies will change the way they handle records in a major revamp long sought by consumer advocates.People who contest items in their credit reports will receive additional information concerning those disputes, including instructions on what they can do if they don’t like the answer they get. In a bid to increase accuracy, medical debts won’t be reported until after a 180-day waiting period to allow time for insurance payments to be applied. More here

Rental payment history to credit agencies?  Good news for some renters

     "It’s the great credit divide in American housing: If you buy a home and pay your mortgage on time regularly, your credit score typically benefits. If you rent an apartment and pay the landlord on time every month, you get no boost to your score — zip. Because most landlords aren’t set up or approved to report rent payments to the national credit bureaus, their tenants’ credit scores often suffer as a direct result."
     According to the Washington Post more and more landlords are using third party reporting agencies to report on tenant payment performance. The article author thinks this is a win-win deal, but wait: what if your payment history is not so sparkling because of other household expenses? Reporting late or partial payments to credit bureaus may not be in your interests.
Why not ask your landlord if he's reporting your payment history.
Read the article here
  Read the Credit Builder Alliance study here:
http://creditbuildersalliance.org/whats-new/hot-topics/power-rent-reporting-cbas-pilot
More on tenants and credit here.
thanks to ElizabethB for sharing!
     wait! there's more: New formula to help those without credit score




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