Credit Law Center Student Loans

The Ultimate Cheat Sheet on Student Loans

The Ultimate Cheat Sheet on Student Loans

The price for higher education is rising, as is the numbers on student loan debt. What is deemed necessary to be successful in today’s world, is also what is holding many folks back from financial freedom. While many are trying to get ahead in their lives, student debt is following them everywhere and it can be hard to know what the next step is.

According to the Board of Governors of the Federal Reserve system, the average monthly student loan payment is $351 for people between the ages of 20-30. All in all, there are 44.2 million American’s with student loan debt. Can you imagine what happens to those that fall behind on something as serious as a student loan? If you have been in this position, you know how seriously those loans have an impact on your day to day life. Working with over 30,000 clients, we see our fair share of student loans and the impact they have on a consumers credit scores. So what can be done?

Student Loans

I’ve been sent to collections, now what?

If you have been sent into collections understand that the government has a lot of power when it comes to student loans and grants. They can garnish your wages, take social security benefits and charge very high collection fees. There is no limit for a collection of federal student loans. Once you miss your payment, they will immediately contact you and the tactics will worsen the longer it takes you to pay. There are severe consequences if you default so pay close attention to your loans. The government hires private collection agencies to collect and many of those agencies will try to collect in illegal, and unprofessional ways. You have rights! We recommend if you have felt harassed or threatened by these collection agencies, that you contact an attorney with Credit Law Center right away.

Should I rehab or consolidate?

Rehabbing your student loan means you spend 9-10 months making payments so that you can remove the default status. If you successfully rehab your student loans the loan holder will remove your default from the credit report. If you consolidate, that negative history for the old loan will continue to show until it ages off the report. You will have a current on the new consolidate loan so continue to make timely payments moving forward. No matter what, student loans need to be paid on time. Maintaining good credit is vital so continue to check your credit report often using a credit monitoring system.

Remember, it is best to check your credit report often and continue to ensure that your payments are being made on time. Having late payments can dramatically impact your scores! If your scores are suffering and you have fallen behind on student loans or other bills, you’ll want to get in touch with a credit advisor today.

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A Note From The Author: The opinions you read here come from our editorial team. Our content is accurate to the best of our knowledge when we initially post it.
Article by Breana Washington

The Truth About Inquiries

Credit Reports. The Soft and Hard Pull Inquiry Finally Explained

There Are Two Main Types of Credit Inquiries

Chances are when you have applied for a credit card or a loan, you have heard the term “inquiry.” This inquiry is a credit check to take a look at your credit report, but there is a difference between the two inquiries.

Often times, we hear the same few questions when dealing with clients. Do they impact my score? What is a hard/soft inquiry? Here is the difference:

Soft Inquiry

A soft inquiry can happen when you pull your report on a website such as credit karma, or background check ran by an employer, or applying for utilities. Remember; these are not your true Fico scores. For more info on the difference in scores, view our blog. At the bureaus discretion, a soft inquiry may be recorded on the report. The soft inquiry will not have an impact on the credit score but a hard inquiry will.

Hard inquiry

Lending institutions such as a bank, mortgage lender or credit card issuers will pull a hard inquiry BEFORE they approve you for the credit card, loan or mortgage. This helps these institutions also determine what the interest will be. When your credit cards are paid down (30% or below) and your accounts are in good standing, the chances of you being approved and paying low interest rates is very good.

Hard inquires do mean you lose a few points from your credit score, however most people lose less than five points. These inquires do not have a long term weight on the credit report. You are looking at about a two year window for hard inquiries.

hard-soft-inquiries-credtit-score

If you are curious on how to get a credit score to view your personal report, we can help. You will want to check your scores here.

Do you have inquiries on your credit report?

If there are inquiries on your credit report and you are unsure where they came from, check with a credit repair service such as Credit Law Center-we use the law to help fix your credit in a quick and affordable way! Credit repair companies can help look through the report and address any errors that may have occurred for you to have inaccurate information. We recommend reviewing your credit history often.
Please note that you can only dispute hard pulls executed without your permission. Hard pull inquiries can take up to 2 years to no longer appear on your credit history.

How do I refrain from having too many inquiries?

Every credit card, loan, mortgage application you submit results in a hard inquiry. If you continue to have your report pulled, and those 3-5 points come out every time, you may end up tanking your scores by shopping around. Space your applications out by several months if possible. However, FICO allows 30 days before weighing your inquiries into their algorithms which determine your credit scores. If inquiries occurred within the same period of time, they can be counted as multiple pulls. This is why mortgage companies recommend not having your credit pulled as a hard inquiry due to the possibility of it lowering and in turn qualifying for a higher interest rate and finally potentially unfortunately not buying a home. Nobody wins!

Conclusion

Credit scores have a critical part in our financial outcomes in life. A good credit score is considered to be scores higher than “700”. When applying for credit, take the time to build your scores. Feel free to use our site as a resource, we love answering questions!To get assistance on tracking soft or hard inquiries that could impact your credit scores, inspect credit reports from Transunion, Equifax, and Experian. CLICK HERE to get in touch with a credit analyst for more details.
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credit errors

A Note From The Author: The opinions you read here come from our editorial team. Our content is accurate to the best of our knowledge when we initially post it.
Article by Breana Washington

Mother and four kids

A Credit Rating, Not A Character Rating

The People Behind The Credit Score

At Credit Law Center we fully believe in the people behind the credit scores. A company is only as good as its “Why” and what matters to us most, is our clients. We recognize that bad things happen to great people and wish to help improve individuals buying power, like the client testimony below.

 

A Credit Rating, Not a Character Rating

“After 15 years of marriage, I began an 18 month long divorce. In my marriage, my main job was to care for our 4 kids and maintain the home. We puchased 2 homes during our marriage, a few rental properties, and vehicles. I assumed I had credit, as anyone would but figured out quickly that wasn’t the case. Because I had been a stay home mother, and only working off and on during that time, I wasn’t on any of the loans, everything was in his name.

Hope (2)

I was unaware that he emptied the checking and savings accounts. So there I was, not a dime to my name, absolutely no credit to speak of, and four little mouths to feed. I started a new job quickly after the separation but that income wasn’t enough to pay for day care cost and all the other expenses that go along with life. Within 60 days I had 3 jobs while trying my best to be a great mom to my kids. I was exhausted. That Christmas I had $85.00 to spend for 4 of my kids!

Nine months into the divorce when I thought things were already bad enough, my car was repossessed. Months later I found out my ex-husband had not filed taxes in a long time, so I then had a huge tax lien on my credit. At this point, I had no where to turn. I couldn’t rely on my family financially, and began to fall deeper and deeper into an emotional and financial hole. Establishing credit was impossible. I had a huge tax lien, and didn’t have any extra money to do anything about it.

Your Guide

Luckily, I met a credit advisor from Credit Law Center and he thought he may be able to help me. I felt like it was a huge waste of his time, there was NO way he could do anything for me. We devised a game plan within 30 minutes and he took the time to give me info for a CPA that would help me with the IRS on my tax lien. The cost for credit repair was not as expensive as I had thought and he offered to work out payment arrangements with me! I appreciated being treated like a person and it was clear that my advisor was taking my situation seriously and that he truly did want to help. That was the first time in over a year I had any kind of hope. I began to establish credit in my name, Credit Law Center successfully removed all my medical collections with in 6 weeks and the CPA he referred me to came up with a compromise with the IRS. Before I met them, I had no idea of where to start or how I was going to do it on my own. I am so grateful now to have good credit, financial freedom, and my life back.”

Are you unsure what the next step is for you? Let one of our Credit Advisors guide you back to financial freedom today! 816-994-4600

Article by Breana Washington

divorce_3

5 Myths on Credit and Divorce

5 Myths On Credit and Divorce

Making the decision to end a relationship with a loved one can be one of the toughest calls to make in a person’s life. If you are considering divorce, what is not working is outweighing what is. Whether you are waiting for your spouse to pull the trigger because you can’t yourself. Or, you’re getting your finances in align prior to making the move, there are a few things to know and how the decision will directly impact your credit score.

In this article we address 5 myths about divorce and credit, so you can make the best financial decision for YOU when D-Day comes.

Myth #1: Spouses share a credit score

In the credit world, each person carries their own credit score. Purchases made together still show on each report. If your spouse is negatively reporting due to a late payment and you are an authorized user on that account, your report will also reflect that negative trade line.

Note: There is a major difference between being an authorized user and having a joint account.
Signing divorce papers

Myth #2: Being married or divorced affects my score

Status, age, gender, race, income, or investment does not have any impact on your credit score. Your negative or positive credit history is what makes up a score. Paying bills on time, keeping balances low and your credit utilization.

Myth #3: The legal status of a relationship doesn’t matter

Joint accounts, mortgages and car loans do. Managing those accounts will affect both of your scores whether you are married or divorced.

Myth #4: After my divorce is finalized, my score is no longer impacted by my ex

Unfortunately, your scores can continue to be affected by your previous spouse long after the marriage ends. Co-owner of a credit card that is used by your ex can mean you are still responsible for the debt, married or not. Some states consider all open accounts opened during marriage, a joint account.

Myth #5: One spouse acquires credit card debt he/she is solely responsible

A divorce decree does not cancel previous credit contracts. As such, the decree is only responsible for writing out who is responsible for existing debts. A divorce decree will not automatically remove joint or authorized users from accounts. Read more on divorce decrees here!

If you have previously gone through a divorce and are unsure of what your credit report is reflecting, please pull a report here IDIQ
Contact:  1-800-994-3070

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Article by Breana Washington