That’s just wrong.

When Congress authorized the bill to require that the credit bureaus give one free credit report per year, they overlooked a very important number – the FICA score.

The individual credit reporting agencies – Experian, Equifax, and Trans Union, all use the raw data from the Fair Isaac company to determine a score. But, Fair Isaac puts out the authoritative FICA score, which is what many businesses use to evaluate your credit worthiness. For instance:

· Lenders determine whether you get credit and how much you will pay in interest.
· Landlords determine whether you qualify to live in their homes or apartments.
· Utility companies use the FICA score to decide whether you have to pay a deposit for basic services like water and electricity.
· Cell phone companies may not give you a phone or service if your score is too low.
· Auto and home insurance companies use the score to determine insurance rates.

Most people don’t realize that they can’t access their credit reports for free. In fact, the Consumer Federation of American found that 75 percent of Americans thought they could get the number if they wanted to. That is part of the problem. Because they can get their credit report, they think they can also get their credit score.

Some companies charge a high fee – up to $50 a year – and then offer to “waive” it if you sign up for expensive monitoring services or other products you don’t need.

And, even when you purchase your number, you can’t be assured that it is accurate. In many cases there is a difference of 30 to 100 points between the actual score and the FICA score the consumer buys.

If you want to buy your score, the only place to be assured you’re getting the real thing is at MyFico.

You should also know that your actual credit score is always in flux. If you put an extra $200 on your credit card, your score could budge 3 points. If you close a department store account, your credit score could move. And, if you pay off a credit card but don’t close it, your credit score will also be adjusted.

But you’ll never know exactly how things are moving. In fact, the only business required to show you your FICA score is your mortgage company. And, they don’t even have to show you the score that they used to determine the mortgage, they can show you a different one which “proves” you need to pay a higher interest rate.

The credit bureaus’ product is the consumer’s personal data. Consumers have a right to this information. Congress needs to act to extend the right to get a free credit report each year to include the right to access your FICA score.

Many homeowners are not aware that they can stop mortgage foreclosure on their own. But you can save your house. In most states, you can redeem your home up to an hour before it goes to auction. So, being able to line up new financing is key.

You have a number of options available to you if you are facing foreclosure. In this article, we will discuss bank refinancing, short sales, and deeds in lieu of foreclosure.

It used to be that banks would do nothing to stop mortgage foreclosure. They simply allowed you to go into default and then bought the home themselves or sold it at auction. Unfortunately for them, the housing crisis has meant that they now have hundreds of thousands of homes on their books. Many of these are sitting vacant in ghost towns and are virtually unrentable and unsaleable.

Knowing that something has to give, your bank may work with you on getting refinanced and keeping your home. For instance, they might lower the interest rates, tack delinquent payments onto the end of the loan, or provide other loan modification. You can work with the lender yourself or hire a loan modification company to do this for you.

Until the end of last year, the banks were unwilling to work with a homeowner until he or she was 30 days delinquent. Now, though, many banks want to keep people out of delinquency if at all possible. So, if you think you might miss a payment, let your bank know right away.

Another option to stop mortgage foreclosure is to sell your home through a short sale. This is a three way deal where all of the parties win. You find an investor who is willing to buy your home at a price that is less than what you owe. The bank agrees to waive the difference. The reason this plan tends to work for everyone is that the bank gets a non performing loan off of its books, the investor gets a good deal, and you get to walk away from your home. If you are pursuing a short sale, make sure that the bank has forgiven the deficiency so that you do not end up with a deficiency judgment against you.

The third option to stop mortgage foreclosure is to do a deed in lieu of foreclosure. A deed in lieu is similar to a short sale except it is just between you and the bank. The bank buys back your home and you walk away. The reason banks are sometimes willing to do this is because you guarantee that the property will be in good condition. Many foreclosed homes have been completely trashed, right down to having the copper pipes taken out and sold for scrap. So, a deed in lieu gives the bank a good deal as well. Again, you should make sure that the bank has wiped out the deficiency in such a deal so that you do not end up with a judgment against you.

There are solutions if you are looking to stop mortgage foreclosure.

There are two types of debt consolidation loans. The first is the home equity loan. This means that you take out a second, third, or even fourth loan on your home. A home equity loan generally offers better terms than does an unsecured debt consolidation loan.

But these days, home equity loans are hard to get. Not only have the credit markets dried up, banks are also being more discerning about how the loan against homes. It used to be that you could get 125 percent of the value of your home in loans. Today, banks often don’t want to lend more than 80 percent.

And, because the home markets have declined, you may be in a situation where you already owe more than the home is worth. That means that you’re looking at an unsecured debt consolidation loan to take care of your debts.

An unsecured debt consolidation loan will affect your credit. At the very beginning, your credit scores may dip as you pay off and close accounts and receive a new high balance loan. But, if you make the payments on your consolidation loan faithfully, you should see an overall rise in your credit score within six months. The increase could be considerable.

There are two ways to obtain an unsecured consolidation loan. The first is to look at debt consolidation loans through traditional lenders. You can search the internet for free debt consolidation loans which will give you a number of quotes at one time, or you can go into the bank where you do business and ask to speak to a representative about a signature loan for the purpose of debt consolidation.

The second way is to work with a debt consolidation company directly. They will arrange to have all of your debts paid off. You will then make one payment to the company per month. There are non-profit and for profit debt consolidation companies out there. Both have merits. However, there are some unscrupulous for profit debt consolidation companies, so do your homework before signing any papers.

Because the loan is unsecured, you do not put up any collateral. This means the loan can be received fairly quickly as the bank does not have to value any assets.

Traditional banks will want to do a credit check before they lend you an unsecured debt consolidation loan. If you have late payments on your multiple debts, this can be problematic.

Debt consolidation companies, on the other hand, are used to seeing people in your financial situation, and have plans and policies for almost every person. You should contact a debt consolidation company as one of your options when trying to secure an unsecured debt consolidation loan.

Many people advising you on how to improve credit score will have gimmicks and tricks to make short term jumps. Unfortunately, these don’t tend to work. The credit agencies aren’t stupid. They close loopholes quickly. But the advice sticks around long after the formulas change.

The best advice on how to improve credit score is to play by the rules.

That means using credit responsibly. The foremost advice I can give you is to take out only the loans you need and can afford. Then, pay them on time every month.

Some credit, like a home mortgage, is absolutely necessary for the functioning of life. With renting as the only viable alternative, your home is an important asset in your portfolio. The best advice for this kind of credit is to not buy more than you can afford to pay back and then make your payments on time each month.

Other credit, called revolving credit, involves mostly credit card debt. The advice for credit card debt is more complicated. For instance, you don’t want to max out your cards. At the same time, you don’t want to have multiple cards. You want to appear like you can handle the credit card debt that you have.

High outstanding debt on credit cards can lower your credit score. So, you should keep balances low. At the same time, you don’t want to have a lot of unused credit because that too makes you a risk. If you have $1000 in debt but $20,000 in available credit, the credit reporting companies recognize that you could go on a spree and suddenly end up over your head in debt.

Another trick some suggest for how to improve credit score is to move debt balances from card to card always chasing low teaser rates. The credit reporting companies have gotten wise to this trick. FICO says that paying off debt rather than moving it around is the effective way to improve your credit score.

You shouldn’t close credit cards as a short term strategy for how to improve credit score. While over the long run, having fewer cards can help the score, if you are looking for a short term boost, this can actually hurt you.

Similarly, you shouldn’t open a bunch of cards to make it look like your credit utilization ratio is smaller. You also shouldn’t open a bunch of accounts when your credit is new, which happens to a lot of young people who are bombarded with credit offers at their colleges.

If you want to know how to improve credit score, you should know that it is a long term process that mostly involves managing your credit responsibly, paying your bills on time, and not taking on more debt than you can afford. There are no quick tricks. There’s just responsibility.

That’s how to improve credit score.

The credit score chart given by various analysts agree that the cut off for excellent is either 770 or 760. Freddie Mac, Smart Money, and PBS’s Frontline all agree that 770 is the cut off for “A+ Credit.” Fair Isaac (the company that compiles credit reports) and MSN Money peg the number at 760.

People who score in the mid-700s on the credit score charts should also qualify for good interest rates and many types of credit offers. Lending Tree and Bankrate agree that scores between 650 and 760 qualify you as having above average credit. Fannie Mae says that a score of 740 makes you an excellent risk for a home mortgage.

The average credit score for prime deals in the United States is 733. TransUnion, a major reporter of credit scores reports that a score of 730 is “very good.”

The average credit score overall in the United States is 723. CBS reports that anything above 720 means that you don’t really have to work on your score because you’ll be lumped in with higher scoring individuals by lenders.

As you fall lower on the credit score chart, though, you will start to have trouble in the form of higher interest rates. For instance, the Fannie Mae Foundation reports that a score of 675 can put you in a higher risk category for getting loans. 43 percent of minority home loan applicants have scores below 679 compared with just 32 percent of white applicants.

Newsweek advises people that if your score falls below 680, you should work with a credit rescorer when trying to get a home mortgage loan. The U.S. government’s Office of Thrift Supervision points out that scores below 680 usually do not qualify for prime lending rates on the credit score chart. 660 tends to be the bottom mark for banks being sure you’ll repay the loan.

When you fall below 600 on the credit score chart, you are considered a high risk according to the Dallas Morning News. Both Fair Isaac and the Consumer Federation of America agree that scores below 600 could make it difficult to get loans. CNN/Money says that a score below 600 could trigger a universal default clause in your loan.

Fair Isaac calls anything below 550 “awful.”

While looking at this credit score chart, you can see that there are slight variables in what constitutes a “good,” “average” or “bad” credit score. A 10 point variable can make a difference in interest rates at different banks, which is why it is a good idea to shop around. Your credit score chart is merely a guide to credit, not an indication of absolute cutoffs.

There are four ways to go about consolidating credit card debt.

1. Take out a home equity loan. A home equity loan is a second, third, or even fourth against the value of your home. You pay off all of your credit cards and secondary debt and make one payment to the bank. There are a number of advantages to a home equity loan to go about consolidating credit card debt. For one thing, home equity loans are about the lowest interest rate loans you can find. Another reason is that if you have equity in your home, these are fairly easy to get. But, be forewarned that if you fail to pay the debt in full each month, you could risk placing your entire home in jeopardy of foreclosure.

2. Take out a personal, or signature loan. A debt consolidation loan is often available from your bank or from a lender affiliated with debt consolidation quotes that you can get for free online. Again, you will pay off all of your high interest smaller loans and make one payment to the bank. While the debt consolidation loan will have a lower interest rate than your high interest credit cards, it will not be as low as a home equity loan. This is because there are no assets backing up the loan. You can also discharge a personal loan in bankruptcy, something you can’t do with a home equity loan.

3. Secure a credit card with a large balance. If you have several small credit card bills, you can sometimes get one low interest credit card and transfer all of the balances to it. Be sure that you close out all of the small cards or else you may be tempted to use them and then have twice as much debt. If you have decent credit, you may be able to get a credit card with a large credit limit. But, make sure that the new card has a lower interest rate than all of the small cards because that is the whole point of consolidating credit card debt.

4. If you are unable to go about consolidating credit card debt by working with lenders or credit card companies directly, go to a debt consolidation firm. These firms work with the credit card companies themselves. Often, they are able to negotiate lower interest rates or even get the principle reduced. Then, instead of paying multiple bills each month, you will make one payment to the debt consolidation company. Keep in mind that there are for profit and not for profit debt consolidation companies. Some of the for profit companies have turned out to be very disreputable. So, do your due diligence before singing up.

You have many options for consolidating credit card debt. You want to choose the one that gives you the best combination of lowest payments per month and lowest overall interest payments over the life of the loan.

Keep that image in your head of what becoming debt free would mean, because you are about to make some hard choices. If you don’t keep the freedom image, you may want to give up when it seems that you are the only person you know who is not going on a cruise this year or who doesn’t upgrade to a 60 inch plasma television.

We live in a society where we buy now and pay later. Unfortunately, that has lead to a situation where everyone is in debt. The recent constriction in the credit markets has meant that people who used to be able to get easy credit are having to tighten their budgets.

Becoming debt free starts with taking stock of what you have and what you owe. Your first order of business is to start living within your means.

You must make the minimum payments on your debts as well as provide food, shelter, and clothing for your family. There are other essentials such as transportation and utilities.

But within each of these categories, there are ways to cut the fat out of your budget. For instance, most families could halve their food budget just by cutting out the restaurant meals and pre-packaged foods at the grocery store. Sure, this means actually cooking homemade meals. But I’ll bet you find that the meals you make at home are far more nutritious than the ones you’ve been eating. And, they’ll keep you within your budget too.

While cell phones are certainly a necessity today, having the package with unlimited calling and texts is not. Having cell phones for emergencies and quick calls is one thing, having cell phones as an appendage to the ear is another.

Even utility bills can be slashed if you are willing to open the windows, use fans, and cut the air conditioning in the summer and use space heaters and wear sweaters instead of central heat in the winter. These choices are smarter for the environment as well.

Will you feel some measure of deprivation while becoming debt free? That is inevitable. Your kids may not quickly adjust to their new, more Spartan lifestyle. They may not understand why you’re no longer handing them $20 when they want it.

But, over time, you can teach them good habits about money. You can show them with your own actions that being financially responsible is emotionally a healthier choice. By compensating for “things” with quality time, you will win them over.

So, keep in mind what becoming debt free really means to you. It will make the hard choices you are about to make seem worth it all.

Being debt free today means no mortgage, no auto loans, and no credit card bills. It means that everything you earn goes into your pocket for spending this month or for saving for the future.

In today’s consumer culture, that doesn’t seem likely for most people. In fact, most Americans dig themselves deeper in debt each and every month.

But, if the current economic slowdown has shown us anything, it is that we have to become more responsible consumers.

People bought bigger houses than they could afford assuming that the housing market would rise forever. They thought that when their interest only loans ran out and they would have to pay the principal, they would just refinance at a new, lower rate. They were wrong, and they have suffered foreclosures in massive numbers as a result.

But it is not just the home market where irrational exuberance took hold. People went out and charged up debts like there was no tomorrow. In fact, after the 9/11 attacks, President Bush even encouraged people to go out and spend to show that the terrorists couldn’t damage our economy.

He passed stimulus bills which just put the debt burden on our children. He gave us money today which our children and grandchildren will pay back with interest.

Perhaps that was necessary given the environment we were in, but now it is time to look at other options. In short, we should look at being debt free today.

The first thing you should do is make a budget on two pieces of paper. The first page “A” should include all of the things you have to pay. Be judicious on this page. The “A” page should include non-negotiable items such as your house payment, credit card loans, car loans, etc.

You will also include the things you absolutely need on the “A” page. For instance, you have to have food to live. But, how much do you have to spend on food? In reality, you probably can find ways to feed your family on a lot less money. Eating out is not an “A” item. Steaks are not an “A” item.

Clothing is another area where you can save money. While you need basic clothing, thrift store prices find their way into your “A” budget whereas designer jeans go on the “B” page.

Your “B” page includes all of the extras. You may find that there’s not a lot left over for the “B” page at first when you are trying to live debt free today. But, over time, you will find that you can afford more things on the “B” page.

When you get a bonus at work, you can add it to the items on the “B” page. When you get a tax refund, it can go to “B” items. Any increases in salary or second jobs can fund “B” projects.

If you are serious about living debt free today, you will take a careful look at your budget. You don’t have to buy into the consumer culture that plagues America. You can chart your own course. In other words, you can be debt free today.

First of all, we will look at avoid home foreclosures solutions that keep you in your home.

If your situation is temporary, you can ask the bank to do what is called a forbearance. This is where they reduce or suspend your mortgage payments for a short period of time (generally no more than 6 months) when you have extenuating circumstances. Generally, forbearances are granted when someone has been laid off and has a realistic chance of finding new work in the time period or when there has been a major medical situation.

If you got behind but can now catch up, you can make one lump sum payment and have your loan terms stay the same. This is called reinstatement.

If you can start making the monthly payments and also pay something towards the amount owed, you can do something called “redeem” the loan.

But, if you know you’re going to lose the house, you can still avoid home foreclosures by taking immediate action. For instance, can you sell the home either to a family or an investor? In these days of depressed home values, it may be difficult to get the amount you owe in the limited amount of time you have, so don’t dawdle on this point.

Selling your home to an investor through a short sale is another option. In this case, you and the investor work with the bank to lower the amount owed. The investor can then buy the home at the lower price. The bank recoups some of the money they’ve lent. And, you are able to be free of the house.

Something similar can happen in a two way deal between just you and the bank. This is called a Deed in Lieu of Foreclosure. What happens here is that the bank accepts the home for you and you walk away. The bank is typically agreeable to such a situation, even though it means a financial loss to them, because so many homes have been looted and destroyed by homeowners who are losing their homes. In a Deed in Lieu situation, you agree to leave the home intact with all of the appliances and piping in place.

In both a Deed in Lieu and a Short Sale situation, you will take a hit to your credit. Usually this is reflected in your credit score for about two years. A foreclosure, on the other hand, will pose far more serious challenges on your credit report and can affect your score for 5 to 7 years.

Also, you should get it in writing from the bank that when you use a Deed in Lieu or a Short Sale that the bank is waiving its right to collect a Deficiency Judgment. If you don’t do this, the bank can come back later and sue you for the difference between what the home was worth and the amount you owed.

If you have a situation where you can no longer afford your home, look at ways in which you can avoid home foreclosures.

First of all, you might want to start by talking to a foreclosure counselor. Now, when you want to avoid foreclosures, time is of the essence, so don’t put things off thinking you can call the counselor “tomorrow.” Do it today!

There are a number of different foreclosure avoidance counselors. Some of these charge you a fee – which can be quite hefty. But there are also foreclosure counselors who are paid through non-profit organizations or by the government.

Avoid foreclosures counseling services are provided for no cost by nonprofit housing counseling agencies which work in partnership with the Federal Government. These agencies are funded, in part, by the Department of Housing and Urban Development and by a non-profit organization called NeighborWorks® America.

But, at some point, you will also have to talk to the bank. Again, you should do this sooner rather than later.

If your mortgage problems are temporary, there are a number of solutions that your lender can help you with. For instance, to avoid foreclosures, they will often do a “forbearance” which is a reduced or suspended payment for a limited period in order to let you catch up.

If you have a deficiency, but need to catch up and have the money to do it in a lump sum payment, the lender will often reinstate your loan under the old terms

If your situation is long term, you also have some options. For instance, mortgage modifications can take many forms to help you avoid foreclosures. For instance, the bank can add the missed payments to the back side of the loan. They can change the interest rate including changing an adjustable to a fixed interest rate loan. They can also extend the number of years on your mortgage making your monthly payment lower.

Other options to look into when you are trying to avoid foreclosures include selling the house. If you have equity in or are even on your home, you might be able to sell the home directly, assuming you can find a family or investor who wants it.

If you are “upside down” on the house, consider solutions such as a sort sale or Deed in Lieu of Foreclosure. Both of these situations have you turning the house over to either an investor or the bank and walking away. While this will negatively affect your credit, it won’t be nearly as bad as having a foreclosure on your record. If you pursue one of these programs, make sure that you get in writing that the bank is accepting the deal as satisfaction in full for the debt so that they don’t hit you for a deficiency judgment later.

There are several ways to avoid foreclosures. But, the important thing is to get the information you need and then act on it right away.