this case does not mean "Credit Card", it means how you borrow money
and how you repay it. Lets go over some brief terminology and general
FICO = Your Credit Score
Years ago, the Fair Isaac Company (http://www.fairisaac.com/) created the formula to generate a credit score based on these 5 things:
How many credit accounts reported currently open and reported in total
The balance reported that you owe on each account individually and in total
The number of years reported that you have had credit for
The reported frequency of how your bills are paid (on-time, late, or not at all)
The type of credit account reported that you have
Their model was named after them: FICO stands for the Fair Isaac COmpany
CREDITOR = credit card companies, banks, and other companies that issue you loans or credit
the 3 national credit bureaus that report the information on the above 5
items from creditors so that other creditors can see a history on you
CREDIT REPORT =
Several sheets of paper printed from a computer system that contains
information on you including your name(s), address(es), birth date(s),
social security number(s), and account history for the last 10 years
that is reported by creditors. Some reports may also contain a FICO (or
So How Does The Credit Reporting System Work?Each month or so, “creditors” send balance and payment information on your credit cards, loans, and mortgages accounts to the bureaus to store in a central repository of data.
The bureaus keep this data stored in massive computer systems.
a creditor (or you) want to see your credit history, they request a
“Credit Report”. By entering your Name, Social Security Number, Address
and sometimes Birth date, the computer systems can pull up all the data
linked to those numbers almost instantly and print it to an electronic
or paper report.
usually do not want to spend excessive time reading and analyzing all
the accounts on your credit report since it would take a lot of time and
human error could miss something important, so creditors usually
request a “FICO” score (or Credit Score).
the credit report is requested, the FICO formula is run on all the data
in your file using the 5 factors above and a score is generated for
There are two ways to request a FICO, “risk based” and “Non risked based”.
The non-risk based score is between 350(bad) and 950(Excellent).
The risk based score is between 450(bad) and 850(excellent).
based simply means an extra evaluation is done to “predict” if you
might possibly have a 90 day or later payment in the next 24 months
based on your past history, and current information when compared to all
other peers in the U.S. Because of the comparison to other U.S. peers,
the equation is always changing month to month. A credit score you had a
year ago, or even last month, can change significantly depending on
your reported history and everyone else’s reported history. Also, one
side note, you are not actually compared to everybody, you are first
categorized into 1 of 10 possible “cards”. People a grouped based on
similar elements of their data, then the risk based FICO score is
So what does this all mean? Well,
if you have looked closely at the messages above, you will see that the
word “reported” has been italicized everywhere. This is because your
FICO score is purely based off of “Reported” information. Information
that Creditors report to Bureaus, and information Bureaus Report back to
So who is to say that the information “reported” is correct?
yourself this question, have you ever applied for a card, or loan or
anything and filled out an application and told someone over the phone
your name and then when you got the card or paperwork, your name was
spelled different or just plain incorrect? What if they got the address
wrong, or the birth date, or even worse, your social security number was
this is information was already transmitted to the Bureaus, then you
have an “alias” name on your account. An alias name can link you to
another person data mistakenly.
going back to what we just learned, if someone pulls your data, and it
is linked to someone else’s account (mistakenly) or, possibly, someone
else has an alias and their information is linked to yours, then when
this FICO formula runs, do you think the outcome will be accurate?
So What Can I Do About It? You can do what the Federal Trade Commission of the United States Government (http://www.ftc.gov/)
gives you the right to do. Investigate inaccurate, erroneous, or
obsolete information for free. All you need to do is learn the laws,
submit paperwork, wait about 30 days for your 1st answer and continue
investigating based on the results. (see our link Public Service
are entitled, and encouraged, to get a Free copy of your credit report
each year (with a FICO score will cost about $5-$9 extra each bureau)
You should review each line and look for inaccurate, erroneous, or obsolete information.
You can write a letter to the bureaus stating what is wrong and why it should be investigated.
Law, the bureaus must investigate any claim that you personally feel is
inaccurate or can be proven different with paper work. Side note, this
does not mean you can remove your entire credit history simply because
you think it is inaccurate. Creditors get 30 days to research their
records to provide the records that support the data they sent to the
Bureaus. If the creditor, or bureau, cannot provide proof why this
information existed in the first place, you are entitled to have the
incorrect information removed.
What Happens After I Remove Incorrect Items? When
new creditors request a Credit Report on you, the data they use to
calculate a FICO score will have more accurate information and your
score will be more reflective of the truth.
How did This Happens In the First place? How
many times have you heard, "Don't worry Mr.& Mrs. Jones, I'll take
care of that. It won't show up on your credit." Only to find out months
(or even years) later when you are buying or refinancing a home or
getting a new car or insurance, that the mistake still exists! So, how
do you get that information corrected? When you call back to the same
customer service number, either the Representative you spoke to no
longer works there or there is no record in the system of the previous
conversation the new representative can find. In some rare cases, you
may even find the company doesn't exist anymore or that account doesn't
Why does it still show up on your credit report? You, like many others, have fallen victim to the credit reporting nightmare that many people face. You probably have asked:
Who is right and who is wrong?
And if I'm right, who do I tell?
And how do I tell them?
What do I do if the company that made the mistake is wrong and doesn't exist anymore?
What do I do if I just keep getting the run around from the people who are responsible?
the numerous complaints over and over from everyone, and through
extensive learning on our part, we came up with a way to help everyone
who needs it. Getting the knowledge in your hands one of the things we