Credit Reports/Credit Scores

Indy Credit Solutions, LLC., (ICS) provides all three major credit reports with FICO II and Fico Classic and Beacon scores, Debt to Income Ratio, Credit Limits, Addresses and Phone Numbers to Creditors, Account Numbers, Inquires, Auto & Real Estate Loan Information, Employment History, Address Information and Phone Numbers to all Creditors, Length of Time Accounts have been Established, Lack of Recent Revolving Account Information, Number of Accounts with Delinquency, Serious Delinquency and Public Record or Collections Filed For, How Many Inquires made The Last 12 months, Historical Delinquencies, Account Distribution Public Records, AKA Information, Identification Information and Addresses to All Three Major Credit Bureaus. All for a nominal fee.

Though the credit bureaus must give you free annual reports, their important numbers will cost you. Now there are sites that offer free peeks at those scores, but how helpful are they?

If you're curious about your credit scores you might have tried one of the plethoras of Web sites and services that offer some free credit information, then lure you into paying for your scores, usually as part of a credit-monitoring package. Consumers are entitled by law to free credit reports which are simply records of your borrowing and repayment history -- but the numerical scores derived from those reports will cost you, in part because credit-reporting agencies aren't required by law to provide them for free to consumers along with the reports. All these sites, which have ties to the credit industry, aim to make money through advertising or through fees if users sign up for products offered on the site, such as credit-monitoring services, credit cards or mortgages. As banks clamp down on lending, it's become more critical than ever to know your credit scores. Financial institutions use them to determine the granting and pricing of everything from credit and insurance to cell phone use and, in some cases, employment. For years, the best way consumers could get their scores was to buy them from one of the three major credit-reporting bureaus -- Equifax, Experian and TransUnion -- or from Fair Isaac , the originator of the widely used FICO credit scores. Consumers can also get free credit reports at AnnualCreditReport.com once every 12 months from each of the three bureaus. But the site, which was created by the bureaus, sells scores separately, usually for about $8 each.

Improve Your Debt to Income Ratio

Debt-to-income ratio important as credit score.

By now you know your three-digit credit score is a very important number in your financial life, but did you know there's also a two-digit number that can be just as significant?

It's your debt-to-income ratio, and it can shed a light on, and help you better understand, your true financial picture. The good news is, getting this number doesn't cost you a penny, and it can be calculated in just a few minutes at your kitchen table.

It's true that nitty-gritty details can make a difference, but you can get a fairly accurate understanding of your financial picture by spending just a minute or two calculating your debt-to-income ratio. By knowing the ratio -- and how to improve it -- you can increase your chances of getting a better mortgage, a better car loan and even better credit card rates.

DTI explained: Your debt-to-income ratio is exactly what it sounds like: the amount of debt you have in the form of mortgages, car loans, student loans and credit card debt, as compared to your overall income. To calculate your overall debt-to-income ratio, sometimes known as a back-end ratio, add up all of your monthly debt obligations -- often called recurring debt -- including your mortgage (principal, interest, taxes, and insurance) and home equity loan payments, car loans, student loans, your minimum monthly payments on any credit card debt, and any other loans that you might have. Do not include expenses such as groceries, utilities and gas. Take this total and divide it by your gross monthly income from all sources.

Let's say you and your spouse together earn $83,000 per year or $6,916 per month. Your total mortgage payment is $1,350, your car loans total $365, your minimum credit card payments are $250 and your student loans add up to $300. That equals a recurring debt of $2,265 a month. Divide the $2,265 by $6,916 and you'll find your DTI is 32.75 percent.

In general, you'll want to keep that number below 36 percent -- a threshold that loan officers and credit card issuers often use as a factor when they determine how much they're willing to lend you. "If you go higher than 36 percent, you are on a slippery slope," Lenders might give you money, "but they'll give you higher interest rates, and if anything goes awry, they'll sock it to you."

So why is that number so important? It's all about proportion. "You can be making a lot of money every month, but if you've got the debt to match it, that can be a problem". "It's important not to overextend yourself." The higher your number, the riskier it is for lenders to offer you loans -- and the more they'll make you pay for them. "The stronger you are financially, the more leverage you have when negotiating interest rates or loan amounts," "So there is an advantage to keeping that ratio low." Indy Credit Solutions, LLC., (ICS) can help you improve your debt to income ratio by eliminating debt at an accelerated rate by utilizing our Debt Settlement Program.

Credit Disputes/Updates

Order your credit reports and credit scores from Equifax, Experian, and TransUnion. Print each report and review it carefully. Highlight any inaccurate information and negative records that could be harming your credit scores. Check when the negative records are set to expire using this guide: ICS Provides Credit Reports from all three major Bureaus and assist in resolving credit disputes and updates on your credit file.

Bankruptcy filing records – Bankruptcy filing records expire from your credit reports 10 years after the filing date. Based on credit bureau preferences, Chapter 13 bankruptcy filings may be removed from your report after 7 years instead. Each account marked as “included in BK” remains on your report for 7 years from the filing.

Charge-off records – A record appears on your credit report when a creditor or lender charges-off your delinquent debt as a loss. This record remains on your credit report for 7 years.

Collection records – Collection records expire 7 years after the last 180 day late payment that led to the account being sold to collections. This expiration date is the same even if the account was sold to another collection agency.

Closed accounts – Closed negative accounts (with late payment or other negative records) will expire from your credit report after 7 years. Closed positive accounts (with no late payments or other negative records) can remain on your credit report longer.

Foreclosure records – Property deed-in-lieu and foreclosure records will remain on your credit report for 7 years.

Inquiries – Records of credit and loan applications will remain on your credit report for 1-2 years. Checking your own credit reports and scores online does not cause this kind of damaging inquiry.

Judgments – Court decisions such child support, civil, and small claims judgments will remain on your credit report for 7 years after the filing date.

Late payments – All late payment records remain on your credit report for 7 years. However, only late payments that go beyond 30 days will continue to have a negative impact for all seven years. Read more about the real impact of late payments.

Repossession records – Vehicle and property repossession records remain on your credit report for 7 years.

Tax liens – Tax lien records can remain on your credit report indefinitely if left unpaid. Once the lien is paid, the record remains on your credit report for 7 years from the paid date. This is true for city, country, state, and federal tax liens.

Security Clearance

You may be ready to serve your country, but if your finances aren't in good shape, your country may not allow you to serve.
Like a lot of civilian employers, some branches of the military in the United States now run a credit check on anyone who wants to enlist -- and a credit history full of late payments, bankruptcies, accounts in collection, foreclosures or sky-high debt can keep you from joining up.
Each branch of the military sets its own policies about whether to check out the credit history of potential recruits, so not everyone puts a long-overdue gym payment on par with the inability to pass a physical. However, when you're signing up with the Air Force or the Coast Guard, a credit check is a standard part of your background check.
Even if you pay on time, a heavy debt load may put a blip on the military's radar. The Air Force rules out applicants with a debt-to-income ratio of more than 40 percent, which means that your debt (for credit card bills, car loans, student loans, medical bills and the like) can't rise above 40 percent of your monthly gross income. They don't look kindly on bankruptcies, foreclosures or late payments, either.
In the Air Force, "we trust individuals to be able to work on their own with very little supervision. If you're having problems taking care of your own personal responsibilities, how can we trust you with the responsibilities of the Air Force?" says Angelo Haygood, deputy chief of Air Force recruiting operations.
In the Coast Guard, which has the strictest rules, your application will get tossed out for a debt-to-income ratio of 30 percent or more (meaning that your debt adds up to one-third of your monthly gross income) or for bad debt. Since implementing that standard in 2008, credit history black marks have rendered 25 percent of otherwise qualified Coast Guard applicants ineligible to serve. Even if you've aced your physical and passed the Armed Services Vocational Aptitude Battery -- the military admissions test -- a history of money mistakes means you'll still be sent packing.
The Army, Navy and Marine Corps, on the other hand, usually run credit checks only on applicants who need to qualify for a security clearance, who seem to be in financial trouble or who require a dependency waiver -- necessary for those with more than three dependents (a spouse and two children, for instance). But they forgo hard-and-fast rules in favor of a case-by-case approach.
Financial readiness and mission readiness
Mountains of credit card debt and past-due bills may not reflect on your patriotism, but they can paint a not-so-pretty picture of your future service, say military experts. Haygood says the Air Force sees potential recruits money mistakes as a sign that they're irresponsible or just plain untrustworthy. For starters, money woes can make you more likely to engage in a financial crime -- such as espionage -- to pay off debts. "You don't want someone dealing with secret information who is in bad debt to the point where they could compromise information to get money to pay the debt off," says Douglas Smith, a public affairs officer with U.S. Army Recruiting Command.
Credit issues can also lead to job performance issues when members of the military need to hold down a second job to pay off bills. Even the distraction of dealing with creditors and sweating over rising debt can make service members less-than-stellar employees. "Credit card debt can be a very heavy burden," says Chief Warrant Officer Scott Carr, a spokesman for Coast Guard Recruiting Command. "If a person is getting called by creditors, it's constantly on their mind. It's putting a lot of stress on them, and then they start to become an ineffective member of the unit. You're starting to put your shipmates' lives in danger because you're not totally focused."
In the past, the Air Force checked candidates' credit only if they fell into certain categories: They were married, older than 23 or they admitted they'd had financial problems in the past. New 18-year-old recruits were seen as too young to have any credit history, let alone overwhelming debt, so credit checks weren't done until recruits got to basic training. Over time, however, so many young recruits had credit issues that it warranted a change in policy, says Haygood. "One guy who was 19 years old had over $9,000 of bad credit. We found that banks were lending to people younger and younger, whether they had a job or not." As of September 2008, the Air Force's new policy dictates that 100 percent of potential recruits are subject to a credit review.
Not everyone takes such a dim view of recruits with underwater credit. "There's not a minimum credit score to join the Navy," says Tom Jones, a public affairs officer with Navy Recruiting Command. "We're looking for people who say, 'Hey, I want to put the country before myself,' not, 'Hey, I have a 690, will you take me?'"
Be all that you can be
Not everyone with heavy-duty debt or bad credit is a military washout. The Army, Navy and Marine Corps are more likely to accept a candidate with past money issues. According to Lt. Col. Thomas J. Rouse, deputy commander of U.S. Army Central Clearance Facility, which processes financial eligibility determination for new recruits, the Army takes a more holistic look at applicants with credit report problems, weighing mitigating factors such as when the foul-up occurred the severity of the issue and the maturity of the person at the time.
Recruiters are also more sympathetic if you can provide a good explanation for your financial woes -- for instance, overwhelming medical bills or a misunderstanding with a roommate about who was paying for that final month's rent.
Still, it's hard to predict what will and won't matter to a recruiter, so avoid surprises and find out exactly where you stand before you step foot in the recruiting office. "If you feel you have some credit issues, get one of the free credit reports and check your credit. Then go through it and fix any negative credit before you even go and talk to a recruiter," says Haygood.
You may have to spend a few months paying off loans or making good on bad debts, but once you fix up your financial past, all branches of the military will be willing to give you a shot. Even if you were caught flat-footed in the recruiters' office, an effort to restore your credit and pay down loans earns you a second chance.
Once you're in
Once you've cleared the initial financial barricades and are in the military, you're not home free. In all branches of the military, security clearance is tied to your personal finances, so if you squeaked by enlistment with a so-so credit score, you may still find yourself ineligible for certain positions within the military. Even long-time military members are subject to periodic credit checks when their security clearances are being reviewed for, say, a promotion from "secret" access to "top secret." If you've fallen deeper in debt or racked up a fresh pile of past-due notices, you could be denied a promotion or have your current security clearance revoked.
The problem isn't uncommon. In 2008, 81 percent of security clearance denials for members of the Navy were due to money problems. And a 2006 Associated Press report found that the number of soldiers in the Navy, Marines and Air Force whose debt led to a loss of their security clearance skyrocketed from 284 in 2002 to 2,654 in 2005, a nine fold increase.
The U.S. military is trying to help its members get a grip on their finances with a variety of tools.
• The Service Members' Civil Relief Act, a decades-old law revised in 2003, aims to keep financially challenged military members from falling deeper into debt by capping interest rates on credit cards and mortgage loans at 6 percent for active duty military. A written note to a lender should give you a substantial break on interest payments while you're serving.
• Each military base or installation has an on-site personal finance manager available to offer credit counseling and help set up a budget.
• The military also partners with credit management firms to offer free credit scores, reduced-rate debt consolidation and personalized action plans for improving credit to service men and women.
Bottom line: Times are tough for everyone, but to make a go of a career in the military, you'll have to be on your best financial behavior -- starting before you march off to see a recruiter.