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.

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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.

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.

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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 looks like for you! Here’s a list of 5 things you may have to deal with as you transition from college life, into adulthood.

Your First Big Kid Job

Are you looking for a fun culture? The highest pay? Something that allows you to work from home? Making a mental note of what kind of job you are searching for may be the best place to begin. If you walk into a job interview and you dislike everything but the pay is great, are you willing to take it? You may not know exactly what you are looking for, until you walk right into it. Go through a few interviews and ask questions. Learn more about the company before you make a decision.

Maybe you majored in something that you know you may not want for a career (sorry mom and dad). That is okay too! On average, a person will switch careers four or five times over the span of their life. Just because you have the degree doesn’t mean you are tied to it for good.

Furthering your education

In some instances, graduate school and beyond is a great path to follow. If you have your heart set on furthering your education, job hunting may not be something you are pursuing yet. Many jobs now require both work experience and a degree. Weigh the options of taking a few years off of school when you have a better idea of what you want to do, or that solidifies the field and path you want to follow and then head back. In the mean time you may find your dream job, or save money for the program you want to enroll in.

Good things come to those that wait.

Let’s Be Roommates (Again)

Where are you planning to live post-graduation? The freedom you have had for the last several years may come to an abrupt halt if you move back home but the pros may outweigh the cons! Did you enjoy having roommates that sometimes couldn’t pay rent or left dishes in the sink? There are some definite advantages of living at home such as home cooked meals, utilities paid for and possibly free rent which all sound great! Again, evaluating what is most important to you will cut down the headache of figuring everything out all at once. What are your goals and aspirations? If you have buckled down and found a job and have some friends moving to the same area as you, maybe renting is your best choice. Did you want to save more? Moving back home again may be a wise choice for you for now.

free creidt repair consultation

Hit the Road

Before you take off to chase your dreams, you’ll need to check a few things off your list.

First-Changing your address and having your mail forwarded is important. Your credit card company, student loan provider and any other subscriptions you have you’ll want to follow you where you go.

Second- If you are moving to an unfamiliar area, you’ll probably want to do your research on your surroundings. Are you going to have a vehicle? Are there places within walking distance if you do not? Check out the local transportation, grocery store, mall movies, church, gas stations, etc.

Third- Check out the local community engagement activities! Hop on Facebook and find the local community center or parks and recreation and find a group or club activity to get involved in.

Final- Start thinking about your budget. Check out the cost of living in your area (prior to moving) and start to prioritize and take into account all the outstanding bills you have that are a must.

Save or Spend

Retirement may seem way far off but saving for things that may come short term are important too. At some point you may want to purchase a car or a home. Talk to your employer about their investment and retirement options. Do they have a 401K?

Nothing good ever came to people making quick, drastic decisions. Think everything through and go with your gut (and some of the advice your parents left you too). A round of applause for your current success and good luck in your future endeavors! This is the beginning of anything you want.




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

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

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

A Credit Builder Loan Can Help You Create, or Restore Credit – Credit Law Center

If you have never established credit before, or you are recovering from bad credit, there are ways to help build or rebuild your credit. If you are unable to get approved for a personal installment loan, one great option is a credit builder loan. Consumers seeking a credit building loan to rebuild or build a stronger credit profile, usually have a larger goal in mind. Whether your goal is getting an unsecured credit card, buy a new car or even purchase a home a credit builder loan is a great place to start.

Credit Builder Loans

A Credit builder loan is particularly offered by credit unions and a few banks, they are typically offered in modest amounts, ranging from $500 to $1500. Many credit unions and banks certain requirements you must meet before they approve the loan. For example, they may require you to be a member for X amount of years, have been employed at the same job for six months, and reside at the same location for six months to a year.

Each Credit Union or Bank offer different Structures

Credit Unions or banks may offer a different type of credit building loans and can vary in interest rates. Here are a few examples of the different types:

  • A loan secured by loan funds: This type of loan is when the lender puts the loan amount in a locked savings account and gives it to the borrower after the final payment has been received. This type of credit building loan is safe and secure for both the lender and the borrower, and the major advantage is the borrower doesn’t need to come up with a lump sum payment to start building credit.
  • Secured Loan: This is when a consumer gives a lump sum amount of money to the lender using it as collateral for a loan. The lender typically puts the lump sum in a secured savings account or a certificate of deposit. The collateral is frozen and the funds are released incrementally as the loan is paid down. The interest rates are typically lower on a secured loan, but the major disadvantage is coming up with a large amount to use as collateral.


How A Credit Builder Loan Can Help

If you are starting fresh and do not have credit a crediting building loan will take time to build on your credit profile. Once the loan starts reporting on with the credit bureaus it may take up to six months before you start seeing an increase in your FICO Score. FICO needs enough information on your credit file to determine your creditworthiness. Making your payments on time and in full will help build a strong credit profile. Depending on your history you may see your score go from zero to 600’s and in some cases 700’s.

If you had bad credit and are trying to reestablish your credit, it will be important that you remain current and on time on any previous obligations, you may have had. You will also want to make sure everything on your report is reporting accurate and is verifiable. A Credit building loan can help you increase your score by 20 to 25 points over the life of the loan.

A small increase in points can help you go from poor to fair, or fair to good. Credit Builder Loans can help move from a risky borrower to a less risky tier.