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The Roadmap to Better Credit

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How to Establish a Good Credit Score

 

Whether it’s finding a home for your growing family, financing your dream car, entering a career or even attempting to acquire a decent rate on car insurance, everything in our lives revolves around credit. No matter what you do, someone is going to be viewing your past choices to asses if you are a liability in your future endeavors and they could be the deciding factor in whether you are living your life or just surviving.  I’m not saying this to scare everyone or say that without good credit you can’t live the life you are meant to live, but that acquiring good credit could provide opportunities that may seem out of reach!

So, I guess its time to get a credit card and start building my credit! Before we get overzealous with the power we have been given with this seemingly divine piece of plastic, let’s take a look into a few ways to reliably start building and maintain our credit.

 

Good Credit Starts with Good Financial Habits

Many people are trapped in credit purgatory, looking for debt consolidators that can act as magical credit faeries to reset their credit scores after they have fallen behind on payments. If you can’t establish good financial management habits, then the attempt to establish better credit will be futile. When building a house, you must start with a strong foundation and the same goes for credit. Some great financial habits that can help you improve your creditworthiness are:

  1. Record every transaction. I know it seems like a pain to keep everything logged, but in the end, you can observe how much you spend down to the last cent. If you wait to record your transactions, you may lose details along the way.
  2. Round up expenses. Say you go out to eat and your bill comes up to $24.14, you should list the transaction as $25.
  3. Round down income. When recording your transactions, you should round down your income. If you got paid $483.23 for the week, round it down to $483.00. This way you’ll have a few extra bucks when you balance your accounts. If your hard-core round down to $480.00 to save a little more and build the habit!

Start with a Secured Credit Card

Now that you have a good record of your finances, you can show your bank that you have a stable income and can responsibly manage your finances. This puts you in a better position to apply for a secured credit card and shows that you are low risk.

When you acquire your secured card, the bank will require you to deposit the limit of the card into an account. So, if the discussed limit of your card is $500, then you will deposit $500 into the secured account. When you make a purchase with this, the $500 is not touched (unlike a debit card that allows you to withdraw the money in your account). The purpose of the money you deposited in the secured account is to provide collateral if you default on paying off your balance.

 

Pay it Off on Time

Now that you have your secured credit card and you have made a few purchases with it, make sure that you have your balances paid off on time each month. The credit card companies make money from the interest charged for late payments and we are trying to establish and raise our credit!

Since you are beginning to establish credit, your interest rates are going to be pretty high compared to someone with established, good credit. In the end would you rather pay the final $20 that was left on the account, or $200 after the absurd interest rates? Some credit companies could also charge you a late fee or reduce your limit if you fail to pay your balance in full when it’s due!

 

Don’t Use Your Credit for Emergencies

Now, an emergency is classified differently among different people. Some classify an emergency as not having gas left in the car a few days before pay day and they are running on empty. Others classify an emergency as a new plasma screen TV going on sale at their local department store and the sale ends before payday. Learn to use your credit card for when it would be more stressful to pay with cash, don’t have an ATM around and can’t pull out cash or small day to day transactions. If you use your credit card for just “emergencies” you may find yourself slipping into a situation where everything is an emergency and spur of the moment purchases will become more frequent. Not having an 80-inch plasma TV to watch “Stranger Things” on is not an emergency!

 

Strive to be Creditworthy

Credit cards can have quite a lot of perks and pros associated with them; however, it could send you into bankruptcy if you aren’t vigilant in how you handle them. Once you have acquired a good credit score it may be tempting to open many additional cards because it’s easy for banks to lend to you now.  You should strive to be credit worthy and push on till your financial freedom. If you are credit worthy, you’ll have a good credit score and can enjoy your transactions and purchases without having to pull out your journal to log everything. Just like working out to get fit or building your career for a future, establishing and maintain good credit does not happen overnight, but in the end will help you achieve the life you know you are meant to live!

 

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.

Check out Credit Law Center Reviews:
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What’s Stopping You From Borrowing?

Credit Law Center Credit Score

I Want To Buy, Now!

Are you preparing to purchase a home in the next few months? It seems that when we are not looking, a home just pops up and finds us, at a time when we were not even contemplating making a move. Then, boom!  The rush is on to beat the clock and make an offer before the next person does. With how quick homes are flying off the market, the best thing to do is be as prepared as possible right now, in the event you do find what you are looking for.

Many borrowers hoping to apply for a home loan are unsure of what a lender might need because it is either their first time, or the process was so long ago. Let’s go more in depth here, about what you will need to get to the point that you are ready to purchase!

Here are 4 things you’ll want to start thinking about before you meet with your lender:

  1. Locating your W2, pay stubs and documents to provide proof of income
  2. Decide if someone will be on the loan with you
  3. How much money you may have/can save for a down payment
  4. Your credit scores
This list will start to prepare you for what your lender will want to discuss with you. More often than not, what is going to keep you from moving through the process as quick as you’d like, is if your credit scores are not where they need to be.
Facts on Fico

FICO is grading you on a few key factors:

  • Payment history
  • New credit
  • Types of credit used
  • Length of credit history
  • Amounts owed

 

If you are looking at your credit report and seeing several derogatory accounts, late payments or other items you will want to look at cleaning up your credit before you go in to a lender. In an effort to lessen the pain of a solid “No” next time you meet a lender, and miss out on your dream home, please consider the following points. If you feel you are a high risk borrower, there are a few things you can you do to ensure that you can lower your risk to lenders. The more prepared you are and the more education you have, the more equipped you will be to get approved and improve your buying power!

4 Challenges of a High Risk Borrower

1. Do you have a low Fico?

You can be sure that your lender will be taking a look at your credit report when you are thinking about purchasing a home. This score is a large portion of what they are using to determine your trustworthiness and the likelihood of you defaulting on a loan, based off previous loans, bank accounts, credit card payments, etc. As important as the scores are in this process, do not let this keep you from going in to see a lender.

If your FICO scores are low there are several things you can do to increase your scores on your own. Read more here, or speak to a credit advisor at Credit Law Center so they can look through your report and ensure you are mortgage ready before you find the home of your dreams.

2. What does your employment status look like? 

Your employment status and employment change are two very different things. Should you be changing jobs often, this may be cause for concern. If you are working a full-time job with regular, consistent pay, creditors prefer this. If you do not work on a set schedule with set pay however, or maybe are self-employed (with less than 2 years of verifiable income), a lender may be very hesitant to lend you any money.

 

 

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3. Are you lacking excess funds?

Although there are several programs in place for borrowers with little to no money down, it is a good idea to save and have some skin in the game for a down payment. Many lenders would prefer to work with someone that has shown financial responsibility and saved and set aside money. A lender may be hesitant if you  do not, and potentially feel like you still may be a risk.

4. Are you avoiding other responsibilities you have?

Late payments impact your credit score the greatest. If a lender sees you have been falling behind on responsibilities you already have, this can be a large red flag during this process. Again, they are considering the likelihood of you to fall behind on the loan, and if you are late on several bills, why would they feel your mortgage would be any different?

If the above apply to you, and you are potentially a high risk borrower, do not let that stop you from pursing a home. As discouraging as things might seem, there is hope for you after some time of getting back on track.

If your credit is not where it should be and your lender has expressed concern, you may look into a few different options within credit repair. If you are in a rush and are pressed for time, Credit Law Center can help you through a quick and affordable process. Each round with Credit Law Center lasts 30-45 days. If you have items on the credit report that have to be removed (collections, tax liens, bankruptcy, etc) allow a credit advisor to walk you through a consultation.

The credit advisors at Credit Law Center will let you know what you can work on, on your end as well as what you may be doing that is keeping you from higher credit scores. With a little help and a guide to walk with you, that new home may be closer than you expected.fund

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Fact or Fiction; A Look At Hard Inquiries

Credit Law Center Mortgage Pre- Approval

 

What's the Difference Between a “Hard” and a “Soft” Credit Inquiry?

Whether you are applying for a new credit card or a home loan, hard inquiries are constantly present when attempting to build credit. Although hard inquires are one of the most common items found on a credit report, there is still much mystery surrounding their effect on a credit score. In todays “Fact or Fiction” we will be taking a deep dive into hard inquiries to shed light on some of the most common misconceptions and answer some of your most asked questions!

 

What Is A Hard Inquiry?

It is a common misconception that in any instance that there is a request to pull your credit, a hard inquiry will be listed on your report. A hard inquiry will only occur when you inquire for financing with a lender directly. This does not apply when you are inquiring for pre approval or pulling your credit for informational purposes and is considered a soft inquiry. Unlike hard inquiries, a soft inquiry will not appear on your report and does not impact your credit score.

   -Soft Inquiries-

Soft inquiries are a little different from hard inquiries; while they do show up on your credit report, they are strictly for your personal reference and have no impact on your credit score. Soft inquiries are not visible to lenders as they are strictly made for informational and pre approval purposes and are only seen by the consumer. Soft inquiries will fall off of your report in anywhere from 12-24 months depending on their type!

How Long Do Hard Inquiries Stay On A Report?

Hard inquiries differ from other items on your report when it comes down to their expiration date. A hard inquiry will usually stay on your report for about 2 years but only affects your score for about 12 months! Hard inquiries are meant to serve as a timeline of when and how often you have applied for credit and can mean different things to different lenders. Multiple hard inquiries can portray a sense desperation to a lender as it shows that you have attempted to apply and were denied by multiple lenders. In some cases, like when inquiring for a home loan, there is a short window where multiple inquiries will count as a one!

 

How Much Do Hard Inquiries Hurt My Score?

There are many misconceptions about just how much a hard inquiry is “worth” when it comes down to affecting your score. It isn’t a case of “One hard inquiry amounts to 5 points and if I have 10 hard inquiries, that means I’ll drop 50 points”. Hard inquiries do not necessarily have a dedicated point value and their potency really falls to how healthy your credit score is prior. Someone with a long positive payment history and multiple open accounts with low credit utilization will not be as heavily affected by hard inquiries as someone who is new to building credit.

Can I Dispute Hard Inquiries?

Unlike other items on your report that can be disputed due to infractions in their listed information, legitimate hard inquiries are difficult to remove. If a hard inquiry  is pulled from your report without your knowledge, you do have the right to request its removal. This also applies in the instance of identity theft as the application is not legitimate to your inquiry.

Do you have hard inquiries on your report that were made without your knowledge? Do you have questions about your credit report or credit questions in general? f you would like to speak with one of our attorneys or credit advisors and complete a free consultation please give Credit Law Center a call at 1-800-994-3070 we would be happy to help.

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       -Disputing Inquiries Made By Car Dealerships-

How to Find the Best Car Dealerships in Los Angeles - Silverback Automotive

 

Disputing multiple inquiries made by an auto dealership is a rough area for many consumers. When submitting a loan application at a dealership, they will often inquire with multiple lenders to attempt to get the best financing opportunity for the consumer. This practice is referred to as shotgunning and is common in every auto dealership and when signing  a car loan application, is essentially giving the dealer permissible purpose to make multiple credit pulls. Depending on the FICO score used, similar to shopping for a home loan, there is often a window where the multiple inquiries will only count as a single inquiry on the report. The FICO score used will depend on which lender is being inquired with.

 

Article by Joe Peters

 

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4 Ways To Not Break The Bank This Mothers Day

Reporting Death of a Loved One

With Mother’s Day around the corner, it is time to start gathering some ideas on how we can really make the day special! It is no secret that everything is growing more expensive, and it is becoming increasingly difficulty to not break the bank when it comes to gift, but luckily Credit Law Center has you covered! 

1.) Thrifty Flowers 

One of the most traditional ways to tell someone you love them is to send them beautiful, vibrant flowers. Although this is a wonderful gesture, it can really add up once you consider everything that goes with a wonderful bouquet. 

A terrific way to help cut back on the cost is to bring your own vase or pick out a beautiful vase at a craft store. Floral shops can also become quite expensive as the bouquet is normally priced per flower, consider visiting your local grocery store and make your own small bouquet for as little as $10-$15. 

If you do decide you would like to go with a florist, be sure to ask when the flowers were delivered to make sure you get the freshest pick! 

2.) Creative Piece 

Hobby and craft stores are amazing places to find a Mother’s Day gift! You could find a beautiful piece of art or pick up a fun craft for you and your mother to complete together! Places like Potters Haven offer event days where parties can come in, have a glass of wine and paint together! Add that with a quick lunch and you have the better part of the day set aside to really make your mother feel special! 

3.) Good Eats 

After working in restaurants for several years, it is no question that Mother’s Day is one of the busiest days out of the year. Hour long waits and added stress is not something you or your mother need on her special day. Instead, why not fire up the grill and make a wonderful meal! In the time it would take to get into a restaurant, get seated and get your meal, you could be relaxing at home with cheaper drinks and better service! 

When I was younger, we would have a big family BBQ where everyone would stop at our Aunt Cindy’s house and cook a amazing spread for everyone. Grab the radio, set up the yard game and sip on an ice-cold drink with some of the most important people in your life and have fun! 

4.) Acts of Service 

Sometimes, something as simple as help around the house can be a great gift! Finishing the laundry, completing some house chores, or just helping by going above and beyond during the day is a lovely display of appreciation! Even if it isn’t flashy, acts of service are still quite a viable gift! 

From the Credit Law Center family  to all those special ladies on Mother’s Day, we appreciate all you do!

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Opting Out: Scams, Junkmail and Marketing Offers

Inboxes full of spam and junk mail, texts coming from unknown numbers alerting you to new investing opportunities, “urgent” mail with pre approved credit and loan offers, and new marketing practices are just some of the annoyances the average consumer must face on the daily. In todays blog, we will go over how to opt out of several of these annoying inquiry services and get your inbox cleaned up for good! 

Pre Approval Credit Offers 

Best Credit Cards for Free Travel | April 2022 | Travel Freely

 

With your information readily available to creditors and  insurers from lists provided by the main three reporting bureaus, credit offers can flood your mailbox at any time without warning. Even though these offers are screened and sent to you due to the fact that you meet their criteria, you may not always be looking for a new line of credit or just don’t need one in general. Luckily the FCRA allows for consumers to opt out of these offers easily with just a few simple steps. To opt out, all you have to do is either; call  888-5-OPTOUT (888-567-8688) or submit  the request online at OptOutPrescreen.com. All you have to do is enter some personal information (SSN, birthdate and name) and you are on your way to opting out! The next step is to follow the prompt and either request a temporary or permanent opt out. Note that you will only be able to use the permanent opt out option if done through the website, but you can do the temporary option through the website prompt or over the phone. 

  

Direct Marketing Offers/ Junk Mail 

Stop junk mail | Metro

 

Even if you have opted out of the credit offers, your information will still be listed on mailing lists. To opt out of these lists, there are a few things you are going to have to do. 

1- Visit DMAchoice.org and set up an account with the Direct Marketing Association (DMA) and decide which mail you want to receive from DMA members. There will be a  $2 processing fee, which will cover you for the next 10 years. 

2-Visit the DMA website and set your email preferences to stop email marketing. 

3-Send a request by mail to the DMA Mail Preference Service, P.O. Box 643, Carmel, NY 10512 

Keep in mind, even when following the procedures listed above, there is no way to completely eliminate direct marketing offers, but it will drastically limit the amount that you receive. 

  

Telemarketers 

Know Your Legal Rights Against Telemarketers | Puff & Cockerill

All you need to do to stop unwanted telemarketing calls is to put your number on the national do not call registry. To do so, just call 1-888-382-1222 or visit www.donotcall.gov to register. Take in mind that the Do Not Call rules will not apply to every telemarketer. Non-profits,  many charities,  polling companies, and recent business endeavors are just a few unaffected by Do Not Call rules . The Do Not Call Registry will also not stop scammers who are operating illegally or committing fraud. To file a complaint against someone who violates the Do Not Call list, call 1-888-225-5322 (888-CALL-FCC). You can also complain online at https://consumercomplaints.fcc.gov/hc/en-us. If you are unsure if whoever is calling you is a debt collector or scammer, take a quick look at our blog to learn the difference Here 

  

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. 

 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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Is It Possible For Your Score To Drop After Credit Repair?

When beginning credit repair, many consumers hold high hopes of ending their  repair process with a clean report and a high credit score. Removing a few items here and there can really make your positive credit shine through and can give you the push you need to acquire financing; but that may not always be the case. The topic of todays blog goes over how and why it is possible that your credit score can actually drop after removing negative items from your report.

Don’t Panic!

So what does it mean when your score is lower than it started after finishing your credit repair process? There are several reasons that can lead to a drop in your score, but remember, a lower score is not always a bad thing!

What to Know About Buying Credit Tradelines - Self. Credit Builder.

1- You Do Not Have Enough Active Tradelines

One reason that your score can drop after credit repair could be that you do not have enough open lines of credit reporting to  help establish your score. Each open account is meant to show how well you are able to manage your borrowed money and the more accounts you have that are reporting positively (low balance/ low credit utilization rate) the better your score will reflect your responsible actions. If you only have one or no active tradelines reporting after credit repair, there is a good chance you will see a dip in your scores.

2- You Have High Amounts Of Debt

High amounts of debt listed on your account and high credit utilization is another reason your score could drop after credit repair. With fewer accounts reporting, just like positive accounts, negative accounts can hold more weight with a clean account. Paying down your cards and keeping them below a 15% utilization rate will help negate a score drop and can greatly improve your final credit score. It is imperative that you monitor total utilization because it impacts 30 percent of your credit score! Experts frequently recommend consumers to keep their credit utilization rate below 20% to positively effect your credit. It is a good habit to keep your ratio as low as possible since high utilization is very off-putting  to lenders. A high utilization ratio tells lenders that you’re having a hard time managing your money and they are at risk to losing their investment.

3- You Have Nothing Left Reporting On Your Account

This situation is a little more rare but is entirely possible after credit repair. In some cases, a clean sweep of a credit report can drop the score due to the fact that there are no accounts left to report. When you first start building your credit, you technically start out at a credit score of zero. When a “clean sweep” occurs and you have a 100% removal, you are essentially back at square one. This is actually beneficial to you when it comes to building credit  as it means that any positive credit you accrue will impact your score much more than new tradelines and positive payment history would on an account with multiple derogatory items.

4- You Applied For New Credit Cards or Loans

During the credit repair process, it is imperative that you practice good credit habits to maximize the results after items are removed. One common mistake consumers make is applying for new lines of credit with the belief that opening a fresh tradeline will add positive credit to the account immediately. When you apply for a new card or a loan, you trigger a hard inquiry. Hard inquiries one their own are not terribly impactful on their own but multiple hard inquiries while repairing your credit can be detrimental to your score.

Credit Counseling & Credit Repair: What's the Difference?

Navigating through the Do’s and Don’ts of credit repair can seem overwhelming at first but avoiding a score drop after credit repair is not as hard as you might think. Our seasoned credit advisers will always audit your report prior to starting the program and provide instructions to maximize your return for your credit report specifically. A drop in your is avoidable as long as you follow the direction of your repair specialist and stay away from poor credit habits during the program.

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.

Check out Credit Law Center Reviews:
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5 Common Mistakes Consumers Make With Their Credit

How Could You Be Hurting Your Credit?

The more you know about how credit works, the better your score will be. This is because, without a lot of background knowledge, your own logic and reasoning will oftentimes fail you. There are a lot of factors that go into creating your credit score, so trying to make decisions when it comes to your credit without studying up first can be tricky. There are five big mistakes a lot of consumers often make because, without any background knowledge, they all sound perfectly reasonable.

1. Close A Credit Card

Just because you don’t really use your card does not mean you should close it. Closing a credit card will stop any subsequent reporting of positive credit and payment history and positive credit utilization. Keeping a card open, even if you rarely use it, can be beneficial. Be sure to use your card every once in a while, be it for a cup of coffee or a drive through sandwich. This will keep activity on the account and keep the card holder from deactivating the account.

2.Believing that Paying on Time is All You Need for A Good Credit Score

Yes, paying off all your credit card debt on time is good for your credit score, but that is not all it takes to have what is considered a quality credit score. If you are using a huge portion of your credit limit every month, even paying it off completely and on time will not be as beneficial as lowering your credit utilization ratio would be. Your credit utilization ratio is one of the biggest factors that goes into creating your credit score, and the lower is it, the better your credit will be. So, keeping your utilization ratio under 30 percent per credit limit will benefit you even more when it comes to your credit.

3. Pay Off A Loan Early

It definitely can benefit your finances to pay a loan off early, especially if you are paying a very high interest rate on the loan, but this can also hurt your credit score. It would be very easy to think that paying a loan off early would help your credit, but in reality, it lowers your credit mix and therefore lowers your credit score. So, if the interest rate on your loan is not burdening you financially, then you will actually benefit from not paying a loan off early.

4. Reject Higher Credit Limits

The only reason you should reject a higher credit limit is if you know you will not be able to stop yourself from overspending because of it. Otherwise, keeping your spending at a consistent rate while also increasing your credit limit will raise your credit score because your credit utilization ratio would then be lower. So, accepting a higher credit limit will in most cases raise your credit score if you can keep yourself from overspending.
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5. Send in Partial Payments

Paying off a debt partially does not put you in better standing with the debt collectors or the credit bureaus. You will still be reported as paying late and are at risk for a delinquency on your credit report. So, if you are struggling to pay your minimums every payment cycle, talk to a credit counselor before trying to appease the creditor by only paying partially.
Other Factors Causing A Drop
  1. Late payments
  2. High Balances
  3. Too many Inquiries
  4. Late reporting (possibly your credit cards reporting at different times to the credit bureaus. An easy fix to this is call your credit card and ask them when they report to the bureaus so you know when to make payments so your score reflects better)
  5. Paying an old collection (there is less than a 2% difference whether a collection is paid or unpaid, most weight is given to how recent the activity)
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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Financing A Vehicle II Where To Start

Credit Score

Time For A New Car?

Several years ago 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 so I don’t have to deal with this gain!”  I knew 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. I was quite ambitious for a boy with little to no credit reported or open trade lines.

Fast forward to later that evening; I sat in the Nissan dealership for hours, hoping one lender would overlook my credit score and provide me with anything! Spoiler: No lender would even consider me and my abysmal credit score. At that moment I knew that I would have to go about this a different way if I ever wanted to even be considered for financing and began my research over how exactly credit worked.

 

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.

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Student 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.

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Are You Trying To Rent With Poor Credit?

Saving At Closing Time

Less Than Perfect Credit Scores and Living Situations.

Many families deal with tough situations when it comes to rentals and the landlords that come with them. According to the Business Insider, more Americans are renting than at any time in the last 50 years.  I can recall a time when I rented a home that had mice so big, that even the neighborhood cats didn’t try to catch them. My roommate and I had to put our fear and phobias aside and get rid of all the mice on our own. Maybe this is your current situation now, and your credit scores are forcing you to rent.

Are you currently living a rental nightmare?

We understand that this is not the ideal living situation.

At some point I lost track of the number of mice we ended up finding and shortly after, we were able to end our lease. Such is not always the case. Breaking a lease can be extremely difficult and some landlords are not as understanding. After many times of reaching out to our landlord with little to no help, we figured out a few things:

  1. Slumlords, as we call them, are only interested in the rent being turned in on time. (No, not all landlords are this ruthless, but you find while renting that few really care about the tenants residing in them).
  2. Quick fixes and patch jobs are ways they are able to make temporary fixes at little to no cost to them.
  3. With the demand and price being very high for a place to live, the quality of homes can be very, very low.
  4. Whether you are renting in a college town or a nice area in the suburbs, you meet less than perfect landlords. It is bound to happen!

 

So why are people renting more now, than they ever have?

These are just a few of the pain points that have been expressed:

  1. Poor/Bad credit-The inability to get approved for a home loan/mortgage.
  2. Lack of excess funds-Unable to make the down payment or fix things in the house once it is purchased.
  3. Lower expenses-Included in rent such as water or electric in most cases.

 

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These are just a few reasons why more people are currently renting. If you are in a position where renting is your only option, here are three things to take into consideration in an effort to make a change:

  1. Look into your state laws and know your rights as a tenant. Is your landlord hard to get in touch with? Do they fail to repair things in a timely manor? Each state has their own requirements when it comes to repairs on a rental. There is such thing as ‘repair and deduct’ which just means if you as the tenant pay for a repair, it can be documented and deducted from the rent. The landlord must know about the problem and it must be proven that the landlord failed to repair it within a reasonable time. If you are dealing with a lazy landlord or one that is hard to get in touch with, this may be something you deal with. Continue to reach out and attempt to communicate with them via email/phone. Document everything that happens and try to keep everything in text and email so there is written communication.
  2. Credit Repair with a Law Firm: A bad rental situation may have you interested in looking into buying a home. With a poor credit score, you may be far off from moving if you don’t take action now. With attorney-based credit repair, you can expect to see results between 30-180 days.  If you are unsure of what your current credit score is, you can pull a credit report here. Talk to a Credit Advisor today about what you can do to get out of your current rental and into your own home soon.

If low credit scores are keeping you from improving your living situation, please contact us today for a free credit consultation. We have helped over 30,000 clients improve their scores. Let us get you back on the path toward financial freedom.

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