Posts Tagged ‘credit bureaus’
As you and I both know there is a ton of free credit building and repair information out there. But how do we separate or know whats valid, useful information and whats a scam, outdated, or just plain wrong? Luckily thats one of our goals. To find, create, and distribute highly effective and actionable information that you can start using right away.
I asked three very well known credit experts one simple question. “What are 2-3 habits that everyone building or rebuilding credit should have or adopt to be successful.” There is so much content out there that is either out of date, misleading, or simply wrong and on of our goals at CR Publishing is to provide a place for the consumer to get honest and effective credit repair help and information!
Many of you know Dan Sater. Dan has been serving as our “In-House” Credit Expert and answering all of your questions on our Members-Only Forum. Dan has also been in the credit repair industry for over 20 years and has helped thousands of his own clients and members of the CR Publishing Family build and rebuild their credit… Here is what Dan had to say when I asked him “What are three habits that someone should have or adopt when building or rebuilding their credit?”
It is hard to pick only three habits to have in building or rebuilding credit.
MAKING TIMELY PAYMENTS
The first must be to Pay Bills On Time!! If you are currently behind on a payment, you must stop the bleeding and bring that account current. A recent late payment will be devastating to building or maintaining a good credit score. If one has a great score, one late payment can drop their scores by over 100 points. Because this is so important, and we all have busy life where it is easy to forget about making a payment, I recommend that you use your banks autopay system to be set up to pay at least the minimum payment in case you forget to make the payment.
KEEPING CREDIT CARDS OPEN
Don’t close credit cards that you decide you don’t want to use. FICO has said for many, many years that you never, never, never get any benefit by closing a credit card – it can only hurt your scores. From a scoring point of view, any credit line you close will reduce the available credit limits and can lower your credit scores. If you have a number of credit cards you don’t want to use, (and they are paid off) put them in a drawer or another safe place. BUT, you need to take them out once, or better, twice a year and make at least a small purchase to keep them active and ensure that they will continue to be scored by the credit scoring model.
USING YOUR CREDIT EXCESSIVELY
The third bit of advice to build and maintain the best scores is not to charge your credit card balances anywhere near your credit limits. We call this maxing-out your credit cards.Let me impress how important this is for your credit scores. If you have good credit, no lates, collections charge offs or even public records appearing on your credit report, youwill lose a lot of points from your scores. How many points? If you have 5 or 6 credit cards and you max out those cards, you will see a point drop of 100 to125 points! This can take a perfect credit profile with no negatives reporting down from a prime, to a sub-prime rating overnight.
The second credit expert that we asked is Jose A. Rodriguez Jr. Jose is the CEO at Clean Slate Credit Solutionsand has personally helped hundred of people rebuild their credit, keep great credit, and even helps businesses build credit and get financing. Clean Slate’s mission statement is something that proves how dedicated they are when it comes to helping people with their credit. “Our mission is to help you escape credit prison and enjoy life with obtaining the credit you always wanted. With our “5 Plates to a Clean Slate” program, we will help you delete or correct inaccurate or unverifiable information from your credit report and empower you with the knowledge you need to maximize your credit scores.” Now lets take a look at what Jose has to say about building habits to build and rebuild great credit:
1. When building or rebuilding credit, you want to ensure that you are applying for the right cards. You can’t expect to get approved for an American Express or top tier Chase credit card, when your credit score doesn’t warrant that type of approval. I always tell my clients to start small. Get a secured credit card with their local bank or credit union, and possibly with Capital One & Discover who offer great credit builder/starter credit cards. They have to be able to show the top tier credit cards that they are responsible and can handle paying their credit cards on time. So in a sense, prove them selves. Even though they might have to put money down to get approved for credit cards in the beginning, it will be worth it in the long run because it is allowing them to get rewarded with a good credit score as they pay their credit card every month.
2. After getting approved for a secured credit card, you want to ask an immediate family member if they can add you as an authorized user to one or two of their credit cards. Please make sure that you are asking someone in your immediate family and not a friend. It has to be someone that you have an actual relationship with. The credit card that you get added as an authorized user to, should not have any late payments and should not be maxed out. By getting added to this credit card as an authorized user, you are adding the positive payment history and the length of history from when that card was open to your credit report. Imagine of the credit card is 10 years old, has a $10,000 limit and was never late. This would really boost your credit score and help you in the credit building process. I must add that you should never , I mean never purchase tradelines or authorized user accounts from a broker or another company. That is actually illegal since you have no direct relationship with person.
3. Now that you have one or two secured credit cards, and one or two authorized user accounts, (make sure they hit your credit report, usually within a month of applying and getting added), you want to continue to make on time payments and pay more than the minimum payment that is due. It is not necessary to pay off the entire balance, just make sure you do not go over 30-40% of the credit limit. If you have a $200 secured credit card, do not put more than $80 on the card or it can drop your credit score. Around the 6 month mark you paying your secured credit cards, you are going to ask the bank that you got the credit card from if they can switch the card to a regular credit card and return your deposit. Then, you want to apply for a department store credit card like Target or Kohls. Then in less than a year, you will have the credit score needed to apply for the top tier cards, like American Express and Chase.
So with these three steps, I promise you that if done correctly, you will build your credit properly and increase your credit score the right way. Another great tactic is that once you start applying for credit cards and are paying your cards on time & not maxing out your credit limit, you want to ask for a credit limit increase with your credit cards every 8 months. By doing this, it will increase your credit limit which will then increase your credit score.
The third expert we heard from was Derrick Harper Sr. of Point Boosters Credit Repair
Derrick was kind enough to hop on the phone with me around 7pm and share some of his amazing wealth of knowledge (you might be seeing more from him later)! He even gave us access to a FB Live Video that answers the question and then goes into some super tactical solutions that you can go and implement right away to rebuild your credit.
But what if you’ve already had a problem and you’re trying to repair or improve a less than stellar FICO or credit score?
Well, some people prefer to learn about the system and to gradually and effectively improve their own credit. Our Credit Repair Intelligence Guide helps you with that. And, it can be ordered right here.
But other people make the decision to use a credit repair company to help them. And one of the things that credit repair companies help you to do are dispute letters that can clarify errors on your report and get them corrected OR removed. NOTE: The Credit Repair Intelligence System also has a tool to help DIYers to do dispute letters.
Either way, here are a few things you want to ensure are included in every dispute letter you or your credit repair company send.
1) Make sure every dispute letter contains the accurate spelling of your first and last name. You should also include your social security number and current home address to avoid confusion.
The credit bureaus won’t resolve a dispute unless they can verify the consumer who the dispute is related to.
This means you or the credit repair company must clearly identify yourself in the letter.
2) The credit bureaus may also require you or the credit repair company to supply supporting documentation verifying identity. They may, for example, want to see your Driver’s License and/or Social Security Card.
NOTE: If you don’t have a driver’s license, you can include another legal form of ID. Other acceptable forms of ID include a passport or state ID.
In many cases your clients can use a pay-stub or W2 form which have both their name and social security number on them.
3) You (or the company) should also include the account name and account number on the dispute letter.
Sometimes creditors report separate account numbers to each bureau. Look at each account number for each credit bureau you are disputing. Make sure you have that creditor’s specific account number correct on your dispute letter.
In conclusion, whether you’re preparing the letter, or the credit repair company is doing it, be sure to include these items with your dispute to have the best results.
And remember, it’s the REASON for the dispute that the bureaus and their computers will mainly look at to process your disputes, so insure you are clear about your reason for the dispute.
Don’t want to create dispute letters on your own? Keep in mind, Credit Repair Intelligence Guide also gives you access to a dispute letter generator. Need more help? Email me at firstname.lastname@example.org and we can refer you to a reputable third party credit repair company that has an outstanding processing department that can create, print and mail the letters for you.
CLICK HERE: to learn more about CR Publishing’s products related to building better credit.
Click here to buy the CREDIT REPAIR INTELLIGENCE System and to get access to the dispute generator.
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Did you break any records in 2015? The answer is yes.
Ok well maybe not you personally. But the rest of America made 2015 the most traveled year in recorded history. This has a lot to do with low gas prices and a whole lot of other stuff that matters (but not here and not right now).
So 2015 saw more people traveling and that inevitably means more car accidents. The Senior VP of the Insurance Information Institute, Jeanne Salvatore, notes that “When the number (and severity) of accidents rise, claims costs increase.” This also means that the cost of everything else in the realm of auto accidents goes up. Salvatore says “Everything is costing more – from the size of claim settlements to litigation costs, medical costs to auto repair, which has gotten more expensive because people are buying more new, more expensive cars.”
So you might be wondering at this point why am I here talking about auto accidents in 2015? Well the people that already know why should keep reading but for everyone else let me drop a quick (but important) knowledge bomb on you! Insurance premiums are going up as a result of increased travel and more accidents. And here’s the important part. The rates you get on your car insurance are not just based on driver history. Insurance companies take into account your FICO Score. And you guessed it. The lower your score is the higher your premiums are going to be. Now this isn’t always the case but overwhelmingly happens throughout the U.S.
Here’s the big takeaway. Whether you live in a state that does not allow your credit to affect your premiums or your insurance company doesn’t factor your score you are still wasting money on a bad score. Dan Sater, Nationally Recognized, Credit Expert and our Members-Only Forum Expert notes that having a bad score can cost you almost $40,000 over a 5-year period.
The truth is you need to have a good credit score. But there are so many faceless and greedy companies out there that are actively trying to keep your score low and drive you deep into debt. Don’t let this happen. We don’t want it to happen.
That’s why we created the Credit Repair Intelligence System and paired it with The Debt Free Bible. These two systems work to get you out of or keep you out of debt and to improve your credit score saving you tens of thousands of dollars. Imagine being able to save that money for your children’s college education, or save up for that dream house.
I am not going to lie to you. Building or rebuilding your credit can be hard and tedious. But it really doesn’t have to be. The Credit Repair Intelligence System is proven to work and has helped thousands just like you build great credit to achieve their dreams and save money.
But I understand it’s a big commitment to live a happy and debt free life. I’m not going to force you to be happy or buy your dream house. But I do want you to at least take the first step towards a great credit score. We developed a Starter’s Guide to Building and Protecting Your Credit that details some things you need to know about credit before you start. This guide is normally 50 bucks but I’m giving it away for $14.95 and I’m covering the shipping and handling for you because I don’t want anything in the way of your credit greatness.
To get the Starter’s Guide Just fill out this form and you’ll get free shipping!
You can also start with our complimentary e-book on the 28 Secrets That The Banks and Credit Agencies Don’t Want You To Know.
But if you are ready to completely get rid of your debt and build great credit to live your dream life then you need to get the Credit Repair Intelligence System and The Debt Free Bible. When you buy both you get the DFB for 50% off. You really cant lose since there is a 30 Day Money Back Guarantee. So stop wasting your time (and MONEY).
We all know a low credit score will make everything in the world of finance more expensive because of higher interest rates from lenders due to being considered a greater credit risk (i.e. higher interest rates on car, homes and credit cards). While this may be considered common knowledge by some, it’s truly devastating effects are understood by few.
EXAMPLE: if you purchase a $200,000 home on a 30 year fixed mortgage at 8% interest instead of 6% (because of your credit score); that 2% is going to end up costing you a total of $96,934.11 over the term of the loan. Now, think about how many “extra” years you’ll have to work to pay off $96,934.11 because of an extra 2% in interest?
The part few people talk about is all the other areas in life where a low score will increase your cost of living on an annual basis. For example, in addition to paying more for a car, home and credit cards, a low credit score will most likely have you paying more for the following as well.
1. AUTO INSURANCE. As many as 92% of the 100 largest personal automobile insurers use credit information to underwrite new business, according to a 2001 study by Conning & Co., an insurance-research and asset-management firm.
2. HOMEOWNERS INSURANCE. Many insurance companies see a correlation between low credit scores and increased property insurance claims. Therefore, a low score will result in higher rates.
3. LIFE and HEALTH INSURANCE. Customers who are unable to pay their monthly insurance premium thereby pass along that increased cost to the insurance company whose stuck with the bill… resulting in a loss for the company. Since customers who pay without lapse are more profitable it is felt by many that a low credit score now even affects a monthly life and/or health insurance premium negatively.
One of the more shocking areas where a low credit score will you cost you is in the area of employment. It’s estimated as many as 42% of employers now do credit checks on applicants before hiring them (according to a 1998 survey by the Society for Human Resource Management).
While many employers claim they only do it to “verify” information on your application (such as where you live and where you have worked etc.) we can both assume they are taking the liberty to “have a peek” at how you handle your financial affairs as well. According to the
to Public Research Interest Group (PIRG) as many as 79% all credit reports contain errors — 25% of which are serious enough to cause the denial of credit (according to a 2004 report).
And that’s all the more troubling in light of the increasing impact a bad credit report can have, says Ed Mierzwinski, director of PIRG’s consumer program.
“It’s outrageous that the credit bureaus are claiming their scores are accurate enough to take people’s lives and screw with them like this”.
Remember that nobody else is going to look after your credit for you. The credit bureaus certainly won’t. It’s up to you to make the decision and take action to improve your credit score, your financial well-being, and your life.
Can You Say The Same About Yours? I know I can…
This can have a very interesting affect on the economy as more people have more buying power and can actually inject more money and responsible consumer spending into the economy making it stronger and stronger.
However, it might be a slippery slope. While it’s a good thing FICO Scores are on the rise how do we keep them above the sub-prime rates we have been seeing? It all comes from education. It’s a pretty safe assumption that a bad credit score, whether it comes from unpaid bills or lack of credit history, normally comes from a lack of consumer education.
That’s exactly what we need to keep the levels of sub-prime borrowers below the all time high of 25% in 2005. And we have a proven system that is capable of helping you build and keep your score where you need it!
I’m not say that you need to get our system (that’s proven to work). If you’re content with your credit score right now and you don’t want to build or protect it that’s fine! There is plenty of fun and education materials and videos for free on our site that you can still benefit from.
But…If you are interested in getting and keeping great credit without using a credit repair company and without spending weeks, months, and probably even years of trial and error using “free” out-of-date content you find on the internet then the Credit Repair Intelligence System, The Debt Free Bible, and The Starter’s Guide To Building and Protecting Your Credit are essential.
We did all the trial and error for you and spent a pretty penny doing it. All so you can have the credit score and debt free life that you want to live. So if you are ready to have the life you want and deserve order right now. (I’m even gonna cover shipping when you add the Starter’s Guide to your order).
If you are not ready to do it yourself call us to talk about your options! The consultation is free and can often be the vital first step to better credit and a better life. Call us 1.800.450.1248
Want to read the Wall Street Journal Article:
What Our Lawyers Make Us Say: CR Publishing publishes and provides quality and actionable do it yourself products and information to consumers who want to improve credit and/or to get rid of debt. The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice.
FICO is a registered trademark of the Fair Isaac Corporation in the United States and other countries.
The FCBA is really a part of the more extensive Truth in Lending Act and it regulates how creditors are supposed to behave and allows you the right to request large amounts of information regarding your billing and payment history.
One provision of the FCBA is often not utilized because it can be confusing to understand from the general wording. This provision is actually the foundation of a great credit repair tactic.
The provision essentially states that an individual has 60 days to dispute an unauthorized charge. This seems pretty straight forward. However, in the summary of the tactic, we did not request a disputed charge. The tactic that we want to use here involves another provision of the law- the “Information Request”, and this is a broader term that is not restricted by a limited time period.
The FTC summarizes the statute’s prohibitions as: “unauthorized charges; charges that list the wrong date or amount; charges for goods and services you didn’t accept or weren’t delivered as agreed; math errors; failure to post payments and other credits, such as returns; failure to send bills to your current address — provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends; and charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification.”
As you read the list of requirements the FCBA, just imagine the credit repair possibilities. Consider something like this…
“In compliance with the Fair Credit Billing Act you are obligated to fulfill with my request for documentation to substantiate the reporting of my account to the major credit reporting agencies. Please provide documentation on how you charged my account, how you calculated the interest rate, as well the full accounting history of where you mailed each of my bills. If you are unable to comply, then please remove your reference to this account from every reporting agency you have reported to. Your expeditious compliance is expected.”
The above example from DisputeSuite.com is considered an “information request” and is something no creditor wants to mess with. Creditors are in the business of lending money and not dealing with credit reporting information. So instead of wasting their time with finding all the requested information, they will often simply remove the marking.
While FCBA was created to assist consumers with current account disputes, it is actually very effective with older derogatory marks. No company wants to be accused of breaking the law even if it was a few years in the past. This is especially true of creditors. Creditors are highly motivated to avoid even the hint of a lawsuit or some public embarrassment.
So this is something to keep in mind when disputing with creditors. You will want to ensure all the below stipulations are met, otherwise request they stop reporting the account to the credit bureaus.
• The account was created at your request.
• Every item billed to an account was billed correctly.
• Every statement was created in a timely manner.
• Every statement was sent to the correct address.
• The creditor never ignored change of address requests.
• The creditor never ignored disputed charges.
• Ignored change of address requests, or disputed charges which weren’t facilitated correctly didn’t contribute to negative credit reporting.
• Interest and late fees were computed in accordance with federal law.
• The creditor didn’t break their contract with their customers in any way.
Remember one of the FCBA’s main credit repair uses is to allow you to request broad amounts of information from the creditor on your account history. It is not asking for verification of the account or making a claim—it is asking for a boat load of information.
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but get too many cards or carry balances and it starts to lower your score.
To learn more and how to improve your score read on…
Consumer credit scores clearly take into account the “mix” of credit types and items consumers have on their reports. This part of the credit score is affected by what kinds of accounts a consumer has and how many of each.
The bureaus will score someone higher, for example, if they have an open mortgage, 3 credit cards, 1 auto loan, and a small amount of other open accounts. Low balances and available credit as well as timely payments are also large factors. So having a few cars is beneficial.
But, if a consumer has a ton of credit cards, their scores will be lowered.
If they have several mortgages, their scores will be lower.
Any “unhealthy” account mixes lower their scores.
The preferred number of credit cards appears to be three. This means a consumer will actually have a higher credit score if they have three open credit cards than if they have more or less than three open.
If you have more DO NOT run out and cancel your cards just yet.
Remember, 30% of the score is comprised of balances in relation to credit limit.
So if you have too many, keep your cards open, but focus on having three large balance cards and pay down the balances on time for maximum impact.
Click here to read more about our products and services to help you to get rid of debt and to build healthy credit so that you can have more of what you want out of life.
Your credit score is usually based on five overall factors: 1) credit utilization, 2) payment history, 3) the age of your accounts, 4) the types or mix of credit and 5) credit inquires.
Credit Utilization Rate
Credit usage is, according to many sources, approximately 30% of your credit score1.
Your credit utilization rate, also known as your balance-to-limit ratio compares your total balances to your total credit limits. Generally, the higher your credit utilization (the more you owe vs. the amount of credit available), the lower your credit score will be.
So two key ways to raise your credit score are to pay off your debt as quickly as possible, or shift your balances to a low interest rate card (provided you don’t already have too any cards).
Transferring a balance from one credit card to a new card may add an inquiry to your file, which could cause a temporary but usually small decrease.
However, you if you aren’t taking on new debt and you are increasing your available credit, this should decrease your total balance-to-limit ratio, which may increase your credit score.
Age of Your Credit Accounts
Your credit history accounts for 15% of your credit score1.
Generally, the longer your credit history the higher your score. That’s why it’s important to establish credit early and to make it a habit of paying ON TIME>.
Your credit history is calculated by taking the average the length of your credit accounts and the age of your oldest account.
Balance transfers between existing credit accounts typically won’t impact your score in terms of your credit history. However, when you apply for a new credit card your age of credit will decrease.
Also, if you close a credit account after transferring its balance that can impact your score because it will reduce the overall age of your credit accounts.
Credit Inquires and Why They Matter
New credit inquires make up 10% of your credit score1.
Each time you apply for a new credit card, a “hard inquiry” is placed on your credit report. Hard inquiries from credit card issuers remain on your credit report for 2 years1.
According to FICO, inquires generally only drop a credit score five points or less depending on the other information in your credit report. Too many applications for credit cards can harm your credit score and reduce your chances of approval because it often indicates you pose a higher lending risk.
It’s important to remember that any change in your credit use can affect your score, but over time this could be a positive change. Credit scores frequently move up and down frequently to reflect the information changes within your credit file. Checking your credit score is a good way to keep track of changes to your credit and monitor the impact of positive or negative events.
When considering a balance transfer it’s important to look at the big picture and read the fine print carefully. Understand all the costs involved and think about the cost of the balance transfer versus the long-term cost of carrying high interest debt.
Legal Disclaimer: CR Publishing provides quality and actionable do it yourself products and information to consumers who want to improve credit and/or to get rid of debt.The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice.
FICO is a registered trademark of the Fair Isaac Corporation in the United States and other countries.
When you have high interest credit card debt, a balance transfer can be an enticing but dangerous offer (especially in the summer when you want to get away).
If you have a small balance and only one or two credit cards accepting a balance transfer offer and a new card might increase your score…since you now have more available credit.
Click here for more on a better mix of cards and credit.
So you may be able to take that vacation AND in the long run, improve your score.
while a balance transfer can save you money in the short run, it’s important to consider the overall impact of a new card and a higher balance on your credit score.
How a balance transfer will affect your credit score depends on several factors, including:
>The total amount transferred to the new card
>Your new available credit limit as compared to your available credit
>If you’re transferring to pay off a credit account in full, and
>If you close a credit account.
And remember, that closing an account will not remove it from the credit report, so it will be calculated into the score. The closed account can be used to determine length of credit history and also payment history which can be very important to overall score.
Of course, paying off the balance after you transfer may also positively affect your credit score.
So this summer be careful not to open too many cards and avoid increasing your credit card debt BUT consider a low percentage balance offer if you can pay it back fast and you have two or fewer cards. The specifics of how FICO calculates the score are complicated so for more information about balance transfers and your FICO score CLICK HERE to see part two of this article
Legal Disclaimer: CR Publishing provides quality and actionable do it yourself information and products to consumers who want to improve or build credit and/or to get rid of debt. The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice.
FICO is a registered trademark of the Fair Isaac Corporation in the United States and other countries.