Record Breaking Credit Scores For 2019 and the Average Credit Score By Generation.

We Broke the Record!

In 2019 the average credit score was recorded as being a 703 among Americans and it’s time to get excited! We have broken our record with an average increase of 25 points since 2012 and with the right credit knowledge and repair options, we are sure to continue our climb!

A good credit score is classified by having a score between 670 to 739 and is necessary for achieving the best rate on a mortgage, the best lenders for vehicle financing and to get some amazing rates/ benefits on credit cards!

 

FICO and You

Thought credit score ranges are based on the scoring model used and the credit bureau that pulls your score, lenders prefer Fico scores when making their lending decisions.

 

Check where you fall in the FICO score ranges!

Excellent- 800 to 850

Very Good- 740 to 799

Good- 670 to 739

Fair- 580 to 669

Poor- 300 to 579

 

Fun Facts Through the Generations

-Millennials are leading the charge with an average increase of 25 points in their Fico since 2012!

-The reason why most older generations have a higher credit score is due to long credit history and multiple positive trade lines.

-The Silent Generation (74+) still holds the highest average FICO score of 756!

-Generation Z (18-22) holds the lowest average FICO score of 677!

 

CREDIT REPAIR CONSULTATION

 

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.

 

Average credit scores by generation

Generation2018 2019 
Generation Z (18-22)666667
Millenials (23-38)664668
Generation X (39-54)685688
Baby Boomers (55-73)729731
Silent Generation (74+)754756
Source: Experian using FICO scores 

 

 

How Do I Raise My Scores?

Raising your scores takes time, patience and diligence to achieve safely and effectively. Below are separate blogs written by credit law center to go in depth to the credit building and repairing process.

Want to learn about Building Credit? Click Here

Want to learn about Repairing Credit? Click Here

 

Article Written By- Joe Peters

 

 

Improving Your Credit For A Car Loan

Time For A New Car?

I remember when I was broken down on the side of the interstate in my 92 Jeep Cherokee I thought to myself “My next car is going to be brand new!”  I new that I would need to finance as I was just a twenty something with a low end painting job, but I was hopeful that I would be approved. Flash forward to sitting in the Nissan dealership attempting to find anyone who would finance this twenty some with no credit…spoiler… there was absolutely no one who would accept. At this point I knew that I would have to go about this a different way if I ever wanted to be able to get accepted for financing but had no idea how to begin. I knew I needed to have better credit and luckily I was able to get a consultation from a credit adviser to assist me in the process!  

 

Understanding Your Credit

First off I had to get a hold of my credit report and see just exactly what was going on. My credit adviser directed me to Free Credit Hub where I was able to sign up for credit monitoring and finally see what was dragging my credit! I was greeted with a cacophony of different numbers, phrases and names that filled the pages and made my stomach drop. My adviser walked me through each  line on the report and explained that there were multiple categories that made up the report. Those categories were:

1. Payment History-  35% of your credit score is based on your past bills and how they were paid.

2. Amounts Owed- 30% of your credit score is based on the available credit card limit you’re using and the amount you owe across your accounts.

3. Length of credit history – 15% of your credit score is determined by the credit history you have built. This is based on the average age of your accounts  along with a few other factors. The longer the history, the better the results!

4. Credit mix – 10% of your score is from the mix of revolving credit (credit cards) and installment credit (car loans, mortgages, etc.) you have.

5. New credit – 10% of your credit score comes from new credit accounts that you have established.

 

Time To Build!

Alright, now that I know what exactly makes up my credit, it is time to start building it up! I took 3 easy steps to start building positive credit and the foundation for a strong credit score.

  1. Lowering My Card Utilization– When I got my first credit card I was told to never use more than 50% of the allowed credit and I would be fine. If we look at our credit utilization like a grade card, a 50% utilization rate is a solid F. 30% is about a C rating and the lower you go the better your rating. Keeping your utilization under 10% is an A rating and is sure to build your credit the fastest.
  2. Becoming An Authorized User– Becoming an authorized user is by far one of the easiest ways to build credit and is kind of like passive income. If you are listed as an authorized user on a trusted family members card, their history is listed on your report as well and you don’t even have to use the card! Be sure you work with someone you trust because the negative history will be placed on your report as well.
  3. Pay Your Bills On Time-  Paying off those balances on time is extremely important when building credit as it provides positive credit history and establishes a exceptional trade line. Late payments are one of the largest discrepancies on most Americans credit report!

 

Your Car Loan Will Help Build Credit.

After about 6 months of building up my credit, I was able to acquire financing toward a new vehicle. You don’t need to have perfect credit to acquire a car loan, but it will affect your financing options and future payments. The wonderful thing about this loan is that it establishes another line of installment credit to your account. As long as you are making your payments on time, this installment credit will soon become a wonderful trade line that builds a long credit history. In the end it is all bout finding the right lender for you and managing a positive ascending credit score. If done correctly, you will be on the road that that fabled 800 credit score!

 

 

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.

The 5 Easy Steps To Building Credit

I Have No Credit History!

“I’ll just pay cash for everything.”

I have said many things in my life with the best of intention, but this had to be the one that hurt the most when it failed. When I was younger, like most people out there, I saw credit as a trap to get us to pay double the money for something we couldn’t afford in the first place. I didn’t know that having no credit would affect me in almost every aspect of my life and I learned that having no credit would impact me even harder than having a poor credit score. High car insurance payments, poor rates and high monthly payments on my car and home were just the tip of the iceberg and I knew something had to change!

“OK… but how do I build credit” I thought to myself as I scoured the internet, looking for a referable source of information. Well, after much trial and error and the help of Credit Law Center I happily present my 5 Easy Steps To Building Credit!

Step 1- Acquiring A Credit Card and How To Use It Safely!

So,  to start building credit I got 15 credit cards and…. I’m kidding! No lender in their right mind would set me up with anything other than a secure card.  A secure credit card is the perfect way to start establishing credit while with very little risk. A secured credit cards works the same as any other credit card, but it is backed by a cash deposited. This is a great way to get you begin building your credit and get it to a point where you can acquire an unsecured card later down the line! Once you can acquire the sweet unlimited power of the unsecured credit card, you can begin the task of keeping the over all usage to about 30% of the spending cap. A 30% utilization rate is still about a C+ rating and you really would like to get the utilization rate to around 10-15% in the long run to really build a positive trade line. Just be sure to make your payments on time!

Step 2- Find That Special Someone, Your Co-Signer!

Acquiring a trusted Co-Signer can really get you on the right foot to build credit safely. You need to be extremely diligent however because your co-signer is affected by the positives and the NEGATIVES the same as you. So make sure that both you and your co signer are aware of the consequences of delinquency when dealing with credit, lest you both end up with a credit score in the low 400s.  Attempting a co signer can be difficult for many people attempting to build credit, but a co signer is not the only way to passively grow your credit score!

Step 3- “The Buddy System” -Becoming an Authorized User!

If possible, become an authorized user on a family members or significant others card. This adds their payment history for that card onto your credit files…just make sure they are a responsible cardholder. You don’t need to use the card to reap the benefits as an authorized user most of the time, but please, if you end up using the card, be sure to pay your fair share!

Step 4- You Work for the Bills, Make the Bills Work for You!

Rent- Reporting services like RentTrack take a bill you are already paying and put it on your credit report, showing off how responsible you have been with those on time payments. Not every credit score takes these payments into account, but those that do could be the deciding factor for a car loan! This will be a slower way to build up your credit, but it is a steady

Step 5- Establish Positive Trade Lines and Keep Them Positive!

Paying your accounts on time, low credit utilization, keeping your accounts open and keeping positive credit history is paramount in establishing perfect credit. I say this as one of my steps to building credit because it is important to acquire these habits early! Your credit is an investment, the more that you put into it early, the better off you will be in the long run!

 

Slow And Steady Wins The Race

Though your credit score will not sky rocket from 400- 800 over night, these 5 steps will help you climb! If you can make your payments on time, establish positive trade lines, establish a positive credit history and keep your card usage below 30% then you will notice your score climb. After that, it is only a matter of time until you are sitting high at the fabled 800 credit score! Your credit is like a garden, you need to give it plenty of attention, take care of it and occasionally pick out the weeds for it to flourish!

 

Author- 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.

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There’s More To Credit Than Meets The Eye

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.

free credit repair consultation

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.

How Military Families Can Improve Their Credit

Credit Building Without Credit Cards│3 Ways To Build Your Fico

Building Up Your Fico

Understanding and building credit in a positive way takes discipline and some education. Do you recall being taught in school, how to build your credit scores? Did your teachers let you know how big of a role credit would play in your life as you got older? Honestly, it is probably likely that even while going through the process of applying for a credit card or car loan, you were still unsure of what your credit scores really meant.

So what is a credit score made of?  Your FICO is determined by the categories below on the pie chart. Payment history and amounts owed on your credit make up the two largest portions of your scores. What if you do not have credit cards? There are a few other options for you, so that you can still fulfill parts of the FICO scoring model.

Facts on Fico

The Importance Of Credit

Can you imagine not having access to a bank that could lend you money for your home or car? Credit is so important for everyone, whether they have a credit card or not.  A lender or banking institution pulls your credit in order to see how reliable and likely you are to default on your loan. If your payment history is bad or you are lacking credit history, it is hard for them to lend to someone that they cannot be sure of. If you are someone that has no credit score, that is almost as bad as having bad scores. It is hard to justify lending to you when they are not sure how you use your money or pay your bills.

The Typical Way To Build Credit-Credit Cards

If you are opening your first credit card, your bank is usually open to issuing you a credit card with them. This credit card is not to take on your next shopping spree, but small purchases like filling up your vehicle. Many people open up credit card for “emergencies” only, while some use them and live outside of their means. Credit can end up getting you into large amounts of debt if you are not careful and capable of setting limits for yourself. So what are a few other ways to start getting a score, without the card in hand?

Other Options Besides Credit Cards

Become an authorized user

Parents trying to help their children build and establish credit usually allow for them to become an authorized user on a credit card. Prior to adding your kid on the credit card of your choosing, take a look at the length of history and the payments on all of the credit cards you have. If you have an old card, with no late payments and great credit history this is the best one to add your child to.

Young adults trying to establish credit should talk to parents or family members that will allow them to be added to a card as an authorized user. Understand that at no point do they give you access to the credit card but rather, you are just now benefiting from their positive history while having to make no effort or open up new credit lines.

free credit repair consultation

 

Report Monthly Bills

Are you currently renting and paying your bills on time? There are now many companies that will allow for you to have your rent reported. It can be very frustrating to constantly pay bills that are not showing up to show your credit worthiness, so many companies have listened to consumers and now are helping them out in an effort to eventually get a loan.

Join A Credit Union

A starter loan at the credit union works about the same as a secured credit card does. In order to build, the consumer deposits their own money to get started. The funds are not immediate but secured in a savings account until the term is complete. Making payments on this credit building loan are most important as again, positive payment history makes up 35% of the FICO pie chart. These are usually shorter terms (12-36 months) just to begin building credit. Often times, proof of income is required as well.

While it may seem a credit card is the only way to build credit quickly, that is not always the case. There are other avenues to take rather than signing up for the first credit card that is dropped in your mailbox. If you don’t trust yourself to avoid those credit card solicitations visit this site to keep from receiving junk mail and credit cards filling up your mailbox.

 

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

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

Check out Credit Law Center’s info-graphic on 4 myths of collections reporting on credit reports.
credit collection myths infographic

credit collection myths infographic

 

5 Big Factors Facing New Graduates

Congratulations to the graduating class of 2018!  Whether you are the first one in the family or have come from a long line of alumni, the stress and excitement of what comes next is no different.

First, relish in your accomplishments and celebrate! There is something to be said about your tenacity and drive to set and achieve a goal such as graduating from college. Once the excitement has died down, you can really nail down what that next step looks like. In order to prepare for future endeavors, it is vital to break down what success look