A Quick Look at Credit Repair

A Quick Look at Credit Repair

Credit Repair – Legal For Every American Regardless if done independently or through a reputable company Credit Restoration also commonly referred to as Credit Repair is the process of removing incorrect or inaccurate items from an individual’s credit report. Credit repair can also encompass adding good credit items and building a positive credit profile. The Fair and Accurate Credit Transactions Act of 2003 (FACTA) defines a “credit score” as the following… A numerical value or a categorization derived from a statistical tool or modeling system used by a person who makes or arranges a loan to predict the likelihood of certain credit behaviors, including default (and the numerical value or the categorization derived from such analysis may also be referred to as a ‘risk predictor’ or risk score.) The Fair Credit Reporting Act (FCRA) enacted in 1970 aimed at creating equality, precision and most importantly privacy of personal information. The concept was to curb the information reported to the credit bureaus by lenders, creditors and others. The FCRA affords the individual the ability to dispute items on his or her credit report. This is done on the basis of “completeness and accuracy” and includes all items that are inaccurate, untimely, misleading, biased, incomplete or unverifiable. If the credit bureaus cannot verify that the information is indeed correct, by law, those items must be removed. These unverifiable items on the credit report must be deleted within 30 days. This has been deemed as the investigation period or the “reasonable period of time” as designated by the law.   Credit Repair Basic Steps Obtain credit reports. Highlight items to dispute. Dispute items with credit bureaus. Repeat cycle as needed.   The concepts themselves are not that complicated; however, the legality and bureaucracy behind them are. Additionally, in today’s environment a certain degree of technology is helpful in expediting and making the process more efficient. Solid credit repair companies have state of the art technology and the understating of consumer laws to quickly and effectively dispute discrepant items on the consumer’s credit report. The best credit repair companies, and the only ones that we recommend, will not only help with step 3 (disputing), but will also guide the consumer through each step of the process. This includes helping consumers obtain free copies of their credit report.   What Service is Right For You? Depending on the credit repair service that is right for you,...

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5 Easy Ways To Improve Your Credit Score

5 Easy Ways To Improve Your Credit Score

A Proactive Approach Never Hurt Anyone: Improving Your Credit Score One Step At A Time A damaged credit score can affect a number of things in your everyday life. Aside from the emotional strain and stress that damaged credit provides, a poor credit score can affect anything from applying for loans, to potential job opportunities. Credit restoration takes more than just time; it requires effort on your part as well. It’s easy, we’ll show you how.   1. Order Your Credit Reports You can’t begin the process of credit restoration without having a good grasp on your own credit situation. This is an extremely important step. You must find out what the 3 main credit bureaus, Equifax, TransUnion and Experian, have on file about you and what is being reported.  Chances are all 3 are going to vary, this is completely normal as creditors aren’t required to report to all 3 bureaus.   2. Carefully Examine Your Credit Reports We can’t stress this enough! Be extremely thorough in your examination. The majority of Americans have incorrect information reported on their credit reports. The credit bureaus are not required to verify the information the creditors send over to them. They generate your credit score/reports based solely on what they receive, regardless of the accuracy of the information. This leads us straight into our next step.   3. Credit Disputes and Resolution Credit errors hurt your credit score more than you may think. This is why creating a dispute is vital. You can do this all online as you’re investigating your credit report. If you prefer to have hard copies of your documents, mailing these disputes in is an option as well. It is important to clearly identify and document all the disputes being submitted. Make sure to print out and keep extensive records of EVERYTHING. Once submitted, a resolution may take up to 45 days to be completed. If you need assistance with this step, please call 888-586-7099   4. Get Caught up on All Open Accounts Devise a structured plan to bring all your open accounts current. Do this as fast as you can. If you’re struggling to make your monthly payments, call your creditors and let them know your situation. Communication is key during this time. The easy way is to just ignore it and hide under a rock, but if you show the creditors you’re actively trying...

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What Makes up a FICO Credit Score?

What Makes up a FICO Credit Score?

On our Credit Restoration page we outlined the categories used to derive a credit score.  To review, those categories are the following… Payment History – 35% Amount Owed – 30% History of Credit – 15% Inquiries – 10% Account Diversity – 10% Today we are going to take a deeper look inside each of these categories including a few credit building tips that will show you how to improve your credit score for FREE!  As always, if you are looking for assistance on how to repair your credit quickly, effectively and at a low cost, be sure to contact us. Payment History These factors make up 35% of the FICO score. Payment info on specific types of accounts (credit cards, installment loans, mortgage, etc.) Negative public records (bankruptcy, suits, liens, judgments, wage garnishments etc.) Collection items, and/or past due items Severity of delinquency (how long past due) $ past due on delinquent or collection accounts Recency of delinquency, public records and collection items. # of past due items on file Number of accounts paid as agreed   Amount Owed Debt amount makes up 30% of the score, and also impacts the debt-to-income (DTI) ratio another tool lenders use when qualifying a loan application. $ owed on accounts (including specific types) # of accounts with balances Lack of a specific type of balance, in some cases Credit Utilization Rate (CUR) – The percentage represented by the amount owed on an account divided by the credit limit of the same account.  This also applies at the aggregate level for all revolving lines of credit for a consumer.   Length of Credit History This is the part of your credit profile that you have no physical control over.  The sooner you establish good credit practices the better. How long accounts have been opened How long accounts have been opened (measured by specific type of account) Time since last account activity     Inquiries & New Credit Only 10% but the easiest to control Number of recent credit inquiries (all credit pulls within 30 days count as 1 – for rate shopping) Time since last credit inquiry (month-to-month) # of recently opened accounts (by amount & type) Time since recent account opening(s), (by type) Re-establishment of positive credit history following past payment problems     Account Diversity Account mix makes up 10% of the FICO score and acts as a mechanism to help prevent the manipulation of scores. myFico.com defines Account Diversity as… “Number...

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