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A Closer Look At Your Credit Score

Understanding Your Credit Score

Credit has become so essential to most big purchases you as a consumer will have to make, and that can be scary if you do not know how credit works. Credit can be confusing, but the more you can learn and utilize your credit effectively, the better off you will be in your financial future. A credit score above 700 is typically considered good, and if it is above 750 then that is excellent. 800 is typically the highest and 350 the lowest on most credit scales. This score is determined through 5 different factors:
  1. Payment History: Late payments will lower your credit score.
  2. Amount Owed: If you have a high credit utilization ratio, then your score will be lower.
  3. Length of Your Credit History: The longer you exemplify responsible financial behavior, the better your score will be. On average, most people in the excellent credit category have a credit history exceeding 7 years.
  4. Your Credit Mix: Having a diversified credit portfolio including multiple different types of credit should help increase your credit score.
  5. New Credit: The more often you apply for credit, the worse your score will be. Opening new accounts also lowers the average length of your credit history, which effects factor 3 on this list.

Other Possible Influences on Your Credit Score

Joint accounts can affect your individual credit score. So, a late payment by either party included in the joint account can hurt both people’s credit. Student loans are also dangerous for young people who do not know how to manage their credit year. Making sure to make these payments on time can be very beneficial to a student’s financial wellbeing in the future.

Raising Your Credit Score

Bad credit can seem scary and overwhelming, but it is not irreversible. Through responsible financial behavior and potentially the help from credit repair companies, you can raise your score to a level you will be proud of. Keeping an eye on your credit and just being mindful of your financial habits can go a long way in raising your score.  
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Fun Facts About Your Credit

Knowing as much as you can about credit and credit scores in general can actually be very beneficial to your everyday life. Although dealing with credit may not always be the most fun activity, impressing people with all of the knowledge you have about credit might be slightly more entertaining. So, here are some “fun facts” about credit you probably did not know before!
  1. Around 40 percent of United States consumers have applied for new credit a minimum of one time this year. Obtaining new credit does make up 10 percent of your credit score too.
  2. Minnesota has the highest average FiCO credit score in comparison to the rest of the states in the United States at 728. Some may argue that this is because of their conservative debt managing strategy, their booming Twin Cities economy, their low natural rate of unemployment, or their low cost of living.
  3. The average FICO credit score in the United States is 704, which is actually not a bad score. Keeping your credit score above average will make you stand out more, though, when applying for credit. There are ways to get it up too if your score falls somewhere below the national average.
  4. Keeping your credit utilization ratio low is very important when it comes to keeping a good credit score, which is why consumers with scores about 785 use only about 7 percent of their credit. The lower that percentage, the better your score.
  5. On average, American consumers have about 14 credit accounts open and about 5 credit cards reported on their credit report. As long as payments are all made on time, there is nothing to worry about here.
  6. The top 1 percent of consumer credit would be those consumers with scores of 850. You do not have to keep your credit score this high to be considered a responsible consumer, though. Scores ranging between 670 and 739 are also considered good.
  7. FICO scores are what are checked most commonly by lenders with a usage rate of over 90 percent.
  8. Poor credit scores would be those falling below 580. Only about 16 percent of American consumers fall into this group.
  9. Fair credit scores range between 580 and 669. About 17 percent of the population would fall into this category.
  10. Good credit scores would range between 670 and 739. 24 percent of the population would be considered to have good credit.
  11. Very good credit scores would range from 740 to 799. About 23 percent of the American population falls into this range.
  12. Finally, Exceptional credit scores would be considered over 800. About 20 percent of the population falls into this category of people.
    Article by Joe Peters Do you have questions about your credit report? If you would like to speak with one of our attorneys or credit advisors  and complete a free consultation please give us a call at 1-800-994-3070 we would be happy to help. If you are hoping to dispute and work on your credit report on your own, here is a link that provides you with a few ideas on how to go about DIY Credit Repair.

Why We Love Debt Negotiation (And You Should, Too!)

We love assisting consumers every day and educating them on how they can save money, impact their scores in a positive way, and take action for themselves! Debt negotiation is something most consumers think they could never do! You may be surprised to know that many creditors/collectors will allow a consumer to negotiate with them on bills such as medical debts.

Job loss, medical emergencies, or unexpected expenses can make it hard to make ends meet! If you find yourself in a tight spot financially, and still have unpaid debt piling up it may seem like a nightmare to continue to get calls from those debt collectors.  Although sometimes difficult,  it is possible to negotiate on your own with collectors. To stay organized and run through the process as quickly as possible, these few steps are important.

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Locate Documentation

Locate your current statements and payments you are making. Make sure your payment history and late payment notices are documented. Determine payment arrangements-Look over your finances, bills and money coming in. Come up with a manageable amount that you know you could make. This will help you when you speak with a representative. Knowing what you will hear prior to the phone call will allow you to avoid them pressuring you into payments you cannot handle. The representative is not aware of your other financial obligations so be very honest and outright about what you can handle. Explain to the representative the current situation that you are in isn’t working and try to come to an agreement that you can afford. They may be able to lower the interest rate or accept a lump sum for less than originally documented. If for some reason they are giving you a hard time and you cannot get them to budge, call back and speak to a new rep.

Gather information-
You will want to make sure you are taking notes and keeping names of the people you speak to as well as the date and time the call took place. Anything at this point needs to be documented and kept in writing. If at any point an agreement is made, ask to have it documented in an email or written. This is the most important piece of the puzzle. Agreeing to a payment that hasn’t been documented could mean they do not correctly remove it from a credit report or the information is misplaced, and you are stuck in payments you did not commit to. You will want an outline of the payments you agreed to.

What can I do if I don’t want to negotiate for myself?
In an effort to save time and resources, another option would be to hire a credit repair or credit counseling service. The primary concern would be to learn what kind of work they will do for you upfront and what you will be paying for during the process. At Credit Law Center we use the law as leverage to gain deletions from the credit report. Ideally, this process is one that consumers want to get done quickly whether it is due to wanting to buy a new home, get a new car etc. At Credit Law Center you only pay for the items that we successfully remove so you can expect we want to make sure we are removing items as quick as we can. We go after all of the items on the entire report and our consumers know what they could end up paying in the end. Should you go through credit repair or credit counseling, it is a good idea to continue to monitor your credit report.

Debt Negotiation Options – Another great option is try to negotiate to pay a smaller amount on the debt owed. If you are uncomfortable or the task seems to difficult, we suggest hiring an attorney for this step!

As a law firm we have the ability and power to negotiate judgments, repossessions, charge off, or any sort of debt that is still reporting on a report. We use the power of the law and our attorneys to negotiate these items in a way that’s favorable to you. While not Debt Consolidation or Bankruptcy, we do have significant tools available to us that help negotiate these debts and save you significant amounts of money! We have four attorneys in house that you can lean on for advice and guidance while working on negotiation. Their extensive negotiating experience with banks, collection companies, and collection attorneys has helped our clients save thousands. Our goal is to negotiate the debt as low as possible out of court and get your case dismissed.

If you are in the process of trying to negotiate and come to an agreement with a creditor and have any further questions, our Credit Advisors would be happy to help you. Should you need the expertise and legal advice of on of our attorney’s, please call and they would be happy to answer any questions!

For more information about your credit score, please give Credit Law Center a call at 1-800-994-3070.

We love assisting consumers every day and educating them on how they can save money, impact their scores in a positive way, and take action for themselves! Debt negotiation is something most consumers think they could never do! You may be surprised to know that many creditors/collectors will allow a consumer to negotiate with them on bills such as medical debts.

Job loss, medical emergencies, or unexpected expenses can make it hard to make ends meet! If you find yourself in a tight spot financially, and still have unpaid debt piling up it may seem like a nightmare to continue to get calls from those debt collectors.  Although sometimes difficult,  it is possible to negotiate on your own with collectors. To stay organized and run through the process as quickly as possible, these few steps are important.

free credit repair consultation

Locate Documentation

Locate your current statements and payments you are making. Make sure your payment history and late payment notices are documented. Determine payment arrangements-Look over your finances, bills and money coming in. Come up with a manageable amount that you know you could make. This will help you when you speak with a representative. Knowing what you will hear prior to the phone call will allow you to avoid them pressuring you into payments you cannot handle. The representative is not aware of your other financial obligations so be very honest and outright about what you can handle. Explain to the representative the current situation that you are in isn’t working and try to come to an agreement that you can afford. They may be able to lower the interest rate or accept a lump sum for less than originally documented. If for some reason they are giving you a hard time and you cannot get them to budge, call back and speak to a new rep.

Gather information-
You will want to make sure you are taking notes and keeping names of the people you speak to as well as the date and time the call took place. Anything at this point needs to be documented and kept in writing. If at any point an agreement is made, ask to have it documented in an email or written. This is the most important piece of the puzzle. Agreeing to a payment that hasn’t been documented could mean they do not correctly remove it from a credit report or the information is misplaced, and you are stuck in payments you did not commit to. You will want an outline of the payments you agreed to.

What can I do if I don’t want to negotiate for myself?
In an effort to save time and resources, another option would be to hire a credit repair or credit counseling service. The primary concern would be to learn what kind of work they will do for you upfront and what you will be paying for during the process. At Credit Law Center we use the law as leverage to gain deletions from the credit report. Ideally, this process is one that consumers want to get done quickly whether it is due to wanting to buy a new home, get a new car etc. At Credit Law Center you only pay for the items that we successfully remove so you can expect we want to make sure we are removing items as quick as we can. We go after all of the items on the entire report and our consumers know what they could end up paying in the end. Should you go through credit repair or credit counseling, it is a good idea to continue to monitor your credit report.

Debt Negotiation Options – Another great option is try to negotiate to pay a smaller amount on the debt owed. If you are uncomfortable or the task seems to difficult, we suggest hiring an attorney for this step!

As a law firm we have the ability and power to negotiate judgments, repossessions, charge off, or any sort of debt that is still reporting on a report. We use the power of the law and our attorneys to negotiate these items in a way that’s favorable to you. While not Debt Consolidation or Bankruptcy, we do have significant tools available to us that help negotiate these debts and save you significant amounts of money! We have four attorneys in house that you can lean on for advice and guidance while working on negotiation. Their extensive negotiating experience with banks, collection companies, and collection attorneys has helped our clients save thousands. Our goal is to negotiate the debt as low as possible out of court and get your case dismissed.

If you are in the process of trying to negotiate and come to an agreement with a creditor and have any further questions, our Credit Advisors would be happy to help you. Should you need the expertise and legal advice of on of our attorney’s, please call and they would be happy to answer any questions!

For more information about your credit score, please give Credit Law Center a call at 1-800-994-3070.

debt negotiation

How To Deal With Debt Collectors

How To Deal With Debt Collectors

I have recently been receiving strange calls from someone trying to collect money from me, what do I do? As a consumer, it is important to be educated about the process by which an actual collection agency attempts to collect debts as opposed to scam callers asking you to meet them at the nearest CVS with no real explanation and for a large sum of money. It is not uncommon that if you are receiving phone calls, it will continue to happen until you can do something to make them quit.

 

Your Rights Under the FDCPA

The FDCPA (Fair Debt Collection Practices Act) has been put into place for the consumers protection. Though they don’t always follow the rules, harassment is illegal and will not be tolerated. There are many avenues as far a legal actions you can engage in should a debt collector call and harass you. While it is legal for a debt collector to call you and attempt to collect a debt, it is not legal for them to harass or threaten a consumer such as many scam callers and a few debt collectors do. There is a major difference and it is hard to track scam calls down. Many legitimate debt collectors take correct steps when making their phones calls however, should you continue to receive calls this is what you should look for:

They must

  • Identify themselves in every form of communication
  • Address what the call is in regards to “This is an attempt to collect a debt”
  • Verify the name and address of the original collector
  • Advise that you have the right to dispute the debt

If you receive a phone call and the company calling you does not do provide the information above, do not pay them or agree to met them to provide any money. You will want to contact an attorney to see if there are any steps that can be taken.

Taking Legal Action

The FDCPA has set rules in place for the way communication is to be handled by the debt collectors. Should a debt collector or agency not abide by those regulations, you may be able to take legal action moving forward.

  • Collector cannot call outside of the hours of 8am and 9pm on your local timezone
  • Auto dialing or numerous calls in the effort to annoy, abuse or harass the consumer is not prohibited
  • Profane or abusive language is not allowed
  • Calls to family, friends, or place of employment is not allowed
  • A Collector cannot call and threaten to report falsely to credit reporting agencies
  • Once a consumer discloses they are working and represented by an attorney, communication must stop

A few examples of harassing phone calls are on our website, you can access them here.

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Suing the Debt Collector

If you feel you have been dealing with harassing collectors, please contact Credit Law Center so we can help you build your case. We have sued all three of the credit bureaus and are constantly helping consumers become more educated about their credit as well as their rights under the FCRA (Fair Credit Reporting Act). This can be a fairly lengthy process, but in the grand scheme of things, having those calls come to an end are worth moving forward and pursuing legal action.

Continued Harassment and Next Steps

The best thing you can do to help yourself in a scenario like this is document and never throw anything away that may help an attorney out. We advise our clients to document everything such as the time and date you spoke, who you spoke with and what company they work for and any of the phone call details that you may be able to remember. Some other things that will help in this process are:

  1. Collection Letters you received
  2. Any voicemails left, save them to a storage device
  3. Telephone Bills
  4. Notes and contact info taken during call
  5. Take screenshots of your caller ID info

 

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.

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How Much Money Is Your Credit Score Costing You?

How Your Score Is Costing You Thousands

Back when I graduated high school (a few years after dinosaurs walked the earth) I had absolutely no idea how detrimental my credit score would be to my  future purchases. My brother was sitting pretty with a 750 credit score and financed his new car at an extremely low interest rate!  On the other hand, I was sinking with a 580 credit score and financed an older Honda Civic for almost double the interest rate! No big deal, I saw this coming but what about insurance. My brother is only 3 years older than me, had 2 accidents on record and we had the exact same insurance agency providing our car insurance. Even with a good driver discount, an older vehicle, no accidents and basic liability coverage;  I was paying 40 dollars more a more a month than my brother for my insurance!  Why is it that I had to pay so much more than George and how can I get  the same payments as he does? The answer all comes down to our credit score difference!

Low FICO Scores

Your credit scores play a major role in the financial freedoms you have. There seemed to have been a misconception that if someone made great money, the credit scores didn’t really have too much pull. Credit impacts us all, from the moment we start to take on paying bills, buying cars, cell phones etc.

Your employer might even take a look at your credit report and deny you for a job if they are low.

Contrary to popular belief, FICO impacts us all, across all demographics.

So, how does a low credit score cost you more money?

 Higher Interest Rates

If you were to apply for a 60 month car loan with a credit score between 500-589, one could expect to be quoted around 15.2% interest rate. That means that your poor credit is costing you and holding you back from lower interest rates (home and auto) and you are actually seeing your money be used in a way that is not benefiting you or your credit score.

Denied Financing

If you have low credit scores, you may have been denied a bank account, credit cards, a home loan or worse. While you may feel defeated right now, there are several ways to start improving your score. If you are in a tight spot financially and are thinking of completing credit repair on your own, please visit our DIY blog to learn more. If you would like to speak with a credit advisor about how to improve your credit score quickly, please contact Credit Law Center today.

How Do I Make A Change?

It is a good idea to monitor your credit scores. If you have noticed that you have any the below items on your credit report, you might be in need of credit repair.

  • Collections
  • Charge Offs
  • Repos
  • Bankruptcies
  • Foreclosures
  • Tax Liens

If you are thinking about going and paying these items off in hopes that they will increase your credit scores, rethink that option. Your credit report will change, but not in the way you want. If you have a 10 year old medical collection reporting and you decide to pay that collection off, the last date of activity on your report changes to the day you pay it. FICO is looking at your activity and weighing it heavily. Your score may decrease significantly due to the last date of activity being updated. There is less than a 2% difference whether a collection is paid or unpaid, most weight is given to how recent the activity. This does not mean we are advising you to not pay your bills or let things fall into derogatory status.

 

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The easiest and quickest way to start seeing a change in your credit scores is to start paying down balances you may have on current credit cards in your possession. This will have a direct/immediate impact on the score. If you are planning to start paying down your cards, try to keep the utilization down below 30%. This will help you start to see a swing in a positive direction.

The largest factor on your credit report is your payment history. Late payments are huge when it comes to dropping the credit scores. At any given time, always try to make at least the minimum payment on your loans.

 

Facts on Fico

 

Saving Money Starts Here

Whether you are looking to get into a new home or buy a new car, your credit scores are vital. If you are hoping to make changes for your financial future, you can start taking small steps now to get back on the right path. If you are in need of assistance today, our credit advisors can help educate you on what you can be doing on your end while we work on derogatory items on the credit report that are hindering you from higher scores.

 

 

 

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 Joe Peters

Do you have questions about your credit report? If you would like to speak with one of our attorneys or credit advisors  and complete a free consultation please give us a call at 1-800-994-3070 we would be happy to help.

 

Students Loans and Credit Scores

Student loans seem to be on almost everyone’s credit reports. They can positively impact your credit scores if you are consistent with your payments and aware of what is happening with your loan. As with any bill or loan you take out, it is extremely important to your credit score as well because it can also have a negative impact too. We will discuss some of the positive ways that your loan can impact your credit, as well as a few ways it can do severe damage if you are not careful.

The Positives

1. Payment History

A student loan, when paid correctly, can be a great trade-line for your credit report. If you make the minimum payments, this shows great repayment on your part that you can reliable and make on time payments. This part of the credit report makes 35% of the FICO grading scale. The difference with a student loan as opposed to your other monthly bills such as your car insurance is that they do not report monthly (only when you miss the payment or fall into collection) whereas your loan will report positively when you have positive payments. This is great for your credit!

For some consumers, building credit is hard to do if you do not have an auto loan or any credit cards, but your student loan can help start to establish that payment history.

2. Building A Credit Mix

For a while, there was a myth out that having “diverse” accounts helped your scores and provided for a healthy mix of credit. Only about 20% of your FICO score is made up of new credit and types of credit used. Typically, having two revolving accounts and two loans (home, auto,or personal) are sufficient enough in trying to build on your scores. Your student loan will also help you start to fill out a portion of that percentage of your credit mix while you continue to make positive payments.

 

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The Negatives

 

1. Late Payments on Loans

A good way to completely tank your credit scores quick, fast and in a hurry is to get a late payment. As much as on time payments can help your credit score, they can also harm them, sometimes up to 100 points.

These bad or derogatory remarks can stay on your credit report for up to seven years. If continue to miss your payments and they continue to roll over, your scores will just keep dropping and dropping. The other piece to this puzzle that is not good, is how long it can take for you to rebuild once you have fallen behind. Be aware of what is happening with your bills and other finances and communicate with your institution if you start to fall behind.

2. Defaulting 

If your accounts are sent to collections, this can also really impact your credit scores. Often times, creditors will not lend you any money unless you “correct” it and make it right with the lender of the money. If you go and apply for a home loan and they see collection status, it can be extremely hard for them to justify lending to you with a lot of derogatory marks on the report.

You may hope to open credit cards and start to establish credit but the creditor denies you due to the defaults on your credit report. All in all, if you are seeing collections/charge offs or have been denied financing, you may want to reach out to a credit repair company today.

What Resources Are There?

Having student loans and pursuing a degree is important in this day and age. We see so many student loans every day on credit reports that are doing great things for people and their credit report. Make sure you stay up to date on the payments and work as well on establishing credit.

For more information on student loans and second chance checking, please visit this site. You will find a lot of programs to help you out in regards to student loans if you have not been able to find any resources yet that work.