Could Consumer’s Activity on Social Media Sites Impact Their Credit?

Are banks gleaning your personal information from Social Media Sites like Facebook and Twitter to determine loan eligibility or set interest rates? Recently, this question has been raised as reports have raised questions; There are marketing companies based in California that uses social-networking information to gather information about certain firm’s customers (their customers include firms like banks, businesses and financial services,) to direct advertising for that firm. These companie maintains this information is used exclusively for marketing purposes only.

It may be a surprise to some, but in recent times other industries have utilized information gathered from their customers on social media sites. For example, “Creditors have been known to utilize information taken from Social Media sites- the more active their creditee on social media sites, the more likely to pay back what they owe.”

For now, due to their large customer base, it would be next to impossible for large lenders to extract sound information or trends from social media sites that could be used against a customer, say one seeking bad credit repair after bankruptcy. Most importantly, this practice could violate the Fair Credit Reporting Act. For guidance about improving credit, you may consider contacting a reputable credit repair services company like Vitesse Financial.

What is VantageScore?

A VantageScore is a credit score derived by the three credit reporting agencies; Equifax, Experian and TransUnion. The Vantage score was created to compete with the FICO score created by Fair Isaac, which has been the gold-standard for determining an individual’s credit rating for years.

VantageScore uses the same basic underlying data as FICO but is based on six variables versus FICO’s five. Furthermore, FICO uses a 300 to 850 scale while VantageScore goes from 501 to 990, as reported by TransUnion:

• A: 901-990
• B: 801-900
• C: 701-800
• D: 601-700
• F: 501-600

The FICO score is still used by “80% of the largest banks and 75% of mortgage origination decisions.” says Ron Totaro, Fair Isaac’s general manager for global scoring solutions. VantageScore was released in 2006 and due to its relatively new status, it is used less frequently by lenders and banks. However, there are some banks and lenders out there utilizing VantageScore on a trial-basis

If you are focusing on improving credit and working on bad credit repair, use the FICO score for now. Remember that the national FICO score average is around 680, if yours doesn’t measure up, contact a reputable credit repair services company. Visit our website www.Vitessefinancial.com for more information.

Spotting a Credit Repair Scam

Bogus companies target vulnerable consumers who have poor credit histories and need bad credit repair. They promise to improve credit scores so you can qualify for loan or credit after they charge you a large fee and then leave you high and dry. While there are legitimate companies who provide credit repair services, there are a number of scams out there. The important piece to remember is that no one can remove accurate negative information from your credit report. Furthermore, improving credit often requires diligence and patience- it’s usually not a quick fix. If you fall prey to a scam, you’ll be out hundreds or thousands of dollars in fees and your credit report will remain unchanged. According to the Federal Trade Commission on their website www.ftc.gov, the following are red flags:

• The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
• The company doesn’t tell you your rights and what you can do for yourself for free.
• The company recommends that you do not contact any of the three major national credit reporting companies directly.
• The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
• The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
• The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.