June 2021

What is a Credit Score? A credit score is a number generated by a mathematical formula that is meant to predict credit worthiness. Credit scores range from 300-850. The higher your score is, the more likely you are to get a loan. The lower your score is, the less likely you are to get a loan. If you have a low credit score and you do manage to get approved for credit then your interest rate will be much higher than someone who had a good credit score and borrowed money. Therefore, having a high credit score can save many thousands of dollars over the life of your mortgage, auto loan, or credit card. What affects your Credit Score? ​​​We will help you to dispute negative items in your payment history. We will show you how to maximize your debt ratio score, even if paying off credit cards is not an option. We can also help you to removing credit inquiries from your credit report. Most people are aware of the three credit reporting bureaus, Equifax, Experian and TransUnion. The average difference in scores between the highest and lowest of your credit scores, from the three bureaus, is 60 points. This is the result of the credit bureaus having different items on their report, which may be correct, incorrect or are not reported in full compliance with credit law. According to a recent study, nearly 80% of all credit reports have serious errors on them and this does not even include the even smaller errors for which we look. If you cannot remove at least 25% of the negative credit items from all three of your credit reports, we will refund 100% of your fee. ​​In addition to starting the credit dispute process with you, what can I do to help raise my credit score? Pay all of your bills on time, every time. This includes your utility bills, mortgage and auto payments, and all of your revolving lines of credit like credit cards. Check your credit report at least once a year. You can find out how to challenge bad information on your credit report here. Never charge more than 30% of the available balance on any of your credit cards. Banks like to see a nice record of on-time payments, and several credit cards that are not maxed-out. If you are carrying high balances on your credit cards, then make paying them down below 30% a priority. Do use your credit cards – Many people who make mistakes with their credit believe that the best way to fix things is to never use credit again. If you are afraid that you cannot handle your credit cards correctly then the best policy is probably this one: Run only your utility bills on your credit cards each month, and then pay the balance in full by the due date. This ensures that your utility bills get paid on time automatically, and as long as you keep the habit of paying off your credit card balance each month your score will continue to go up. Leave the credit cards locked in a safe or drawer at home. ​ Keep your accounts open as long as possible – Even if you are no longer charging on the card. The best policy is to keep those unused accounts open, blow the dust off your card every few months to make a small purchase, then pay it off. How long each of your accounts have been active is a major factor in your credit score. Remember that this all takes time – Following the above steps consistently over a long period of time will increase your credit score and allow you to qualify for better loans and lower interest rates. Repairing your credit score does not happen overnight, so if you do these things for a few months and do not see a large increase in your score, do not give up. They are all habits that you will want to maintain throughout your life, as they will help you to keep your finances and lines of credit under control. ​​How long will certain items remain on my credit file? Delinquencies (30- 180 days): A delinquency may remain on file for seven years; from the date of the initial missed payment. Collection Accounts: May remain seven years from the date of the initial missed payment that led to the collection (the original delinquency date). When a collection account is paid in full, it will be marked as a “paid collection” on the credit report. Charge-off Accounts: When a delinquent account is sent to a collections company. This will remain for seven years from the date of the initial missed payment that led to the charge-off (the original delinquency date), even if payments are later made on the charge-off account. Closed Accounts: Closed accounts are no longer available for further use and may or may not have a zero balance. Closed accounts with delinquencies remain for seven years from the date they are reported closed, whether closed by the creditor or by the consumer. However, the delinquency notation will be removed seven years after the delinquency occurred when pertaining to late payments. Positive closed accounts continue to be reported for ten years from the closing date. Lost Credit Card: If there are no delinquencies, credit cards reported as lost will continue to be listed for two years from the date the creditor is contacted. Delinquent payments that occurred before the card was lost are reported for seven years. Bankruptcy: Chapters 7, 11, and 12 will remain on one’s credit report for ten years from the filing date. A Chapter 13 bankruptcy is reported for seven years from the filing date. Accounts included in a bankruptcy will remain for seven years from the date reported as included in the bankruptcy Judgments: Remain seven years from the date filed. City, County, State, and Federal Tax Liens: Unpaid tax liens remain for fifteen years from the filing

Many people are aware of the important role the credit rating plays in their lives. However, understanding what actually goes into a credit score (the credit score breakdown) might present a bit more difficult. There are several different methods of scoring, but most lenders and banks rely on the FICO method that has been in existence since the 1980s when it was developed by the Fair Isaac Corporation. The three prominent credit bureaus (TransUnion, Experian, and Equifax) all worked with Fair Isaac in order to come up with the FICO method. Your credit score may be any number from 300 to 850. The average American falls at about 690 which is deemed relatively good credit. However, while this score should secure you a loan, it will not get you the very best interest rates on a loan. Following is the credit score breakdown: Payment History. The biggest chunk of your score (35%) is derived from your payment history. This score is influenced by how well (or not) you pay your bills on time, how many have been sent to collection agencies, bankruptcies, tax liens, etc. Keep in mind that missing a payment is worse than making a late payment and that being late or especially missing a mortgage payment is a bigger blow to your credit score than missing a credit card or utility payment. Outstanding debt. The amount of debt you have (compared to the amount of credit you have not used) accounts for 30 percent of your score. Try not to max your credit cards out. In fact, it is recommended that you only use 25 to 50 of the credit that is available to you. A way to balance this out is to obtain more lines of credit and not use them. However, you do not want to apply for a bunch of credit cards all at once as this is marked against you. If your credit is in good standing, apply for a reputable card every six months or so and save it for a rainy day. Credit duration: Fifteen percent of your credit score is based on how long you’ve established credit. This is common sense. The longer your credit history, the better your overall score will be. More data about your past leads to a more accurate prediction of your future creditworthiness. Types of credit: Having several types of credit will actually boost your score if they are managed well. This counts for 10 percent of the overall rating. Too much activity: As mentioned earlier, opening new credit accounts all at once will negatively affect your score in the short term. It’s also important that you are aware that your score can be lowered for too many “hard inquiries” about your status. A “hard inquiry” is one that you have authorized a lender to perform. If you are inquiring about your own score, this will not count against you. Understanding what goes into the credit score breakdown is the first step in improving your score.

Raise your hand if you were one of the millions of people who promised yourself you’d only use your credit cards for an emergency. Everyone who read this just raised their hand, and that’s because no one takes on a line of credit with the intent of falling into debt. It happens, though, and then it’s all downhill unless you take steps to fix your credit score. Here’s how you can do it. An excellent tip for people who are trying to repair their credit is to make sure you know who is looking at your credit report and why. This way, you will know how many inquiries have been made, and you can dispute any unnecessary or illegal inquiries into your report. To help you manage or prevent arthritis when exercising, you should wear shoes that are sturdy and supportive. If you exercise with shoes that are not sturdy and supportive, it can lead to an overstress of the joints. If you’ve been wearing one pair of athletic shoes for a year, it is now an excellent time to replace them. One tip that everyone who is trying to repair their credit should understand is to know the difference between hard and soft inquiries. Soft inquiries will not affect your credit score, whereas hard inquiries do. Make sure you know exactly how many hard inquiries are on your account at any given time. Whenever you find a mistake on your credit report, it is essential to contact the creditor as well as the credit bureau when you are trying to rectify that mistake. This can help any future problems by preventing that creditor from making the same mistake twice so you won’t have to go through it again. Take note of where you are getting your credit report from when you are looking to repair your credit. Many different places will offer you a copy of your credit report. It is best, though, if you try and get your copies from the credit bureaus themselves. To avoid hurting your credit when you can’t afford to pay all your bills for the month, prioritize. A single late payment towards a medical bill, a payday loan, or even your electric bill won’t hurt your credit in the way that a late credit card payment will. While those late fees may hurt, at least they won’t damage your credit score. To avoid being unduly harassed by creditors, learn your rights fast. Some collection agencies have been known to lie or engage in illegal techniques to get paid. Read up on the collection agency laws in your area as well as the Fair Debt Collection Practices Act. A little knowledge will give you the ammunition you need to shut down harassment. To increase your credit score, keep the balance owed on your credit cards at less than 30% of the card’s total limit. The way you utilize your credit is something that credit bureaus consider when evaluating your credit, and a little restraint will go a long way to show that you use your credit responsibly. While it may be tempting to agree to instant payments to creditors over the phone, paying by paper check can give you absolute proof of payment should the need arise. Keep canceled checks attached to all pertinent bills and paperwork or be sure to make copies of checks when they are available online. Getting out of a bad credit situation is all about arming yourself with the proper information to do so. The net is riddled with misinformation and half-truths, so heed this information wisely and use it to pull yourself up by the bootstraps so you can experience a life bereft of bad credit.