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Credit Cards For College Age Students│5 Back To School Basics

Back To School For College Students

Do you remember what you did with the last credit card you closed out or cancelled?

  • Be aware of your surroundings at all times
  • Don’t skip class
  • Get involved/meet new people
  • Have fun, but not too much fun

College orientation can be a whirlwind and there are so many things that happen very quickly prior to the first day of classes. It is no longer as easy as grabbing the list at Walmart for school supplies and heading off for your first day.

I can recall my mother and I signing up for a checking account at a bank that was local in the town my University was at. I was extremely excited to start school and was ready for all these new responsibilities.

With that being said, there were also some things I didn’t know about as an 18 year old out on their on my own. I was not aware of what all went into good credit scores.

Here are five tips to educate your college age student when it comes to credit:

1. The Reality

As a student you may not know what shows on your credit reports.  Student loans are just one of the items that may end up on your credit report.

Other things that may show up on your report in a negative way can be

  • late payments on utilities
  • a landlord that you or a roommate doesn’t pay with the lease and fines
  • retail credit cards
  • late payments on a student loan

If your student is making payments on their loan themselves, stress to them that late payments are very serious when it comes to their credit. The same goes for any kind of credit card or bill.

A late payment on a credit report can drop a score up to 100 points. Rebuilding credit can take a while and although it may not seem to be a big deal to a student currently, good credit is important and should be emphasized to your student.

 

2. Find The Right Fit For You

If there is an absolute need for a credit card as a student, you want to be sure to do all research before taking the next step and signing up.

When you are looking into applying for a credit card remember these few rules

  1. Shop for low rates
  2. Try a credit union
  3. If you apply for a checking or savings account with a bank, look into credit card options with them as well

 

free credit repair consultation

3. How To Use The Cards You Get

A credit card should only be for emergency use or to build credit. Students should keep credit card balances as low as possible. If they are using the credit card, try to keep the balance below 30% of the limit.

Credit card balances are reported to the credit bureaus each month. Your credit score will reflect lower scores, if your balances are very high or are reaching maxed out or close to the limit.

 

4. Building Credit

If your student is using credit cards, encourage them to monitor their credit.

The myth out there about having to keep a balance on your credit cards is not accurate. Remind your student as well, that most of the credit cards will be acquiring interest.

There are many companies out there that will offer credit reports for free or you can enroll in credit monitoring.

When pulling a credit report, take note that any consumer score that you can view online is a vantage score not an actual FICO score. Vantage scores tend to be higher than what an actual FICO is. FICO scores can only be given to  you by a bank or lender. However, monitoring your credit at this time is more about what is showing on the report and the timely payments, etc on the report rather than the bureau scores.

5. Put A Lid On It

In an era where it seems there are so many awesome things going on whether you are on Facebook or Instagram, it can be hard to miss out on fun opportunities that maybe you just cannot afford.

Although your student may want to take that awesome Spring Break trip with friends or they have a hard time without the newest clothes, continue to help guide them and help them understand the importance of making good financial decisions.

How Can My Student Start Building Credit?
  • Become an authorized user on family member card
  • Look into a credit builder loan
  • Apply for a secured credit card

There will be many important life lessons that happen through this next time period in their lives. As parents it is important we both teach and model good decisions and long lasting lessons. We hope this sparks a conversation in your household about good financial choices for your high school graduate or soon to be graduate.

 

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.

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

 

Quick, Affordable, Credit Repair │Reviews and Recommendations

Quick and Affordable Credit Repair That Works

When you are interested in a product where do you normally go for feedback? If you immediately go to the review section of a product or turn to friends for their recommendations you are like most consumers out there!

With the device in your hand that you are probably reading this article on, you can easily search the internet for the “best of the best” of almost anything you may want to purchase.

Over the years, many consumers have tried to go to various companies for credit repair services and advice but have been disappointed by services that over promise and under deliver. Credit Law Center is an attorney based credit repair company built on a solid foundation of trust and commitment to their clients. The reviews from both clients and real estate agents and loan officer’s speak volumes. Not to mention, the company has been open since 2009 repairing credit as opposed to some companies that last in the industry for a few years or less.

Trusted Partners

At Credit Law Center, on average there are 600-700 new clients a month. Over half of these clients are referred over by loan officer’s and real estate agents from 46 different states.  If you were wondering what these referral partners and businesses receive from Credit Law Center in return, the answer is simple. Theses agents, after just a few months in credit repair, receive a client that is ready to purchase a new home or was able to close on a house. Both companies are in constant contact to ensure that the goal of closing on a home is met.

A client in credit repair with Credit Law Center can expect that they will be educated throughout the process on how to continue to raise their scores and learn more on the way credit works, so they can continue to build their scores long after they have left credit repair.

One loan officer, Drexel Swanson with USA Mortgage has been using Credit Law Center to refer his clients for several years. “I have closed 8-10 deals this year that would not have happened if Credit Law Center didn’t get involved, just three this October.” Drexel feels that Credit Law Center works at a reasonable price and goes above and beyond to educate his clients as well.

“One client signed up (less than 30 days before closing) and improved his score and saved $5,000 in closing cost because his scores increased by 55 points. He spent less than $1,000 with Credit Law Center,” Swanson says.

law firm vs credit repair

Credit Law Center’s Promise to Clients

There are many companies that will lock a consumer into a monthly program which means they are already collecting the clients money and have no real reason to improve the credit scores because they are being paid. At Credit Law Center, their promise to their clients is they will not pay unless items are removed. While there is a credit monitoring fee, this is strictly to show and monitor what items are actually falling off the credit report. Clients with Credit Law Center can go in and look at their accounts and see what is being removed. They also receive letters from the creditors and collectors with statements showing if their debts and items on their report are removed, updated or verified.

There are several complaints out there with various credit repair companies that the consumers were unsure of what really was improved on or where their money was actually going. Credit Law Center clients receive their updates and a list of the items that were gone after, and what was removed or not. Communication and expectation is set at the beginning of the consultation so the client is aware of the possibility of items to come off or not and realistic expectations are discussed, Deborah felt she receive great service from start to finish.

“My husband and I are extremely satisfied with both the customer service we have received and the results provided by the Credit Law Center! When we first contacted CLC we were in the process of trying to buy a house and we thought that this would be impossible due to my husbands horrible credit scores. My husband had been making strides on his own to improve his credit, but the process was extremely difficult because of all of his past debts and collections. After the first 45 days we were shocked! A lot of the items that were dragging his score were removed and his credit had improved dramatically! We are so grateful to have found a company that is so dedicated to what they do. They have such a great reputation because of their high success rate and also will not charge you unless they actually get items removed! Sincerely, thank you so much!”

 

free credit repair consultation

What do the scores mean?

If you are interested in what scores you are seeing when you pull your own credit report, you are looking at consumer or vantage scores. This is the score you have access to online that may show higher than what a lender or bank would pull for you. These are not true FICO score. These scores show higher so that you will start shopping around for products, or continue to spend. Your score may be significantly lower when you apply for a home loan with an actual bank or lending institution. Once you understand this, the frustration or mind game you feel that happens when your scores are so different won’t be so frustrating. So, what do your scores mean for you?

  • Very Good : 740-799
  • Good : 670-739
  • Fair : 580-669
  • Poor : 300-579
What are the fees associated with credit repair?
  •  $65 for collections, charge-offs, and repossessions.
  • Bankruptcies, foreclosures and short sales are $120.
  • Credit Law Center is able to also help in debt negotiation
  • Credit Monitoring

 

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.

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

Helping Your Borrowers│A Referral Program For Clients That Don’t Qualify

A Referral Program That Works

As a real estate agent or loan officer, are you finding that many of your potential clients are being turned away due to low FICO scores? What are you doing to help them once they are denied? Credit scores are a vital part of the home buying process. So, what do you do when your client can’t get financed? If you do not have a trusted resource in your toolbox and a great referral program, you should continue reading.

The Referral Process

This is no fly-by-night credit repair program. We are a law firm specializing in credit repair and we only charge our clients for the successful removal of an item from the credit report. At Credit Law Center we onboard anywhere between 600-700 clients a month. We have worked diligently with lenders and real estate agents to ensure we are educating and informing each one about what their clients are going through with poor credit and what they may be able to help them (things like mistakes on the credit reports they see, or as real estate agents, clients that want to buy but cannot) and what the next steps are for their client, whether that be a little credit education or a complete overhaul of the credit report. We also educate their clients about ways they’re impacting their credit scores and what their rights are as a consumer under the FDCPA (Fair Debt Collection Practices Act) and the FCRA (Fair Credit Reporting Act).

Actually, 53% of our business comes from agents and brokers all over, as we currently work in 48 states (excluding Georgia and South Carolina). Our referral program is exceptional and we work very closely with each agent and lender.

Real estate agents and loan officers are missing out on business by turning away borrowers with less than perfect credit scores. While you cannot change the lending process, you can invest in the potential of clients and partner with a referral program that works!  Let Credit Law Center be part of the missing puzzle piece.

Your Piece of the Puzzle

Give your clients the gift of a second chance. Each interaction you have with a borrower that becomes deflated due to not qualifying, you should attempt to turn the conversation around with the hope of “it isn’t a no, it’s just not yet.”

If you are looking at credit scores with a client and you see someone that cannot get qualified due to medical collections, repossessions, bankruptcy, student loans that have fallen behind or are at a 600 and below, those should be clients you send directly over to speak with a credit advisor. Clients in the poor and fair range will appreciate your effort in trying to aid them to get a home loan rather than turning them away and shutting the door on a better future for themselves and possibly their families.

  • Very Good : 740-799
  • Good : 670-739
  • Fair : 580-669
  • Poor : 300-579

As an agent or lender, you may rely on previous client referrals. How much more business could you bring in when you spend a small window of time with someone and refer them to a program to help them? You will soon become a trusted partner to them and to anyone else they may know that has gone through something similar.

The Return on Investment

The benefit to sending a client to Credit Law Center is that it costs you, as a lender or agent, nothing! We understand that building your pipeline and building relationships comes down to the people you refer business and how quickly they get back to you. The referral partners we work with can feel secure in knowing that their clients will only be charged for actual work that is being completed rather than a month to month service fee.

law firm vs credit repair

 

 

free credit repair consultation

The Perks to the Program

As a referral partner with Credit Law Center, you will have a credit advisor appointed to you and your clients. This is your main point of contact and someone you can rely on to send you industry specific education, updates on clients improvements and credit specific questions. We conduct monthly webinars that you can tune into with credit education or industry changes. You can tune into these or receive a copy so you can continue to use it for your office or client education. We believe that credit repair as a whole, has a negative connotation surrounding it. We have over 30,000 satisfied customers whose lives have been changed because someone referred them and they started the program.

Remember:
  • We can work with collections, charge offs, tax liens, judgments, bankruptcies, foreclosures, late payments and issues with some student loans
  • We only charge the clients for the removal of the items we dispute
  • They will become educated in how to improve their credit scores and useful tips on usage and good decisions financially
  • You will be updated on a clients progress
  • Turn around time for clients is quick, as we do not get paid unless we are making progress
  • You can rely on our company and your credit advisor for any industry, credit specific questions

If you run into a client that you have to turn down, you do not have to take any extra time trying to go over their credit report and help them; leave it to us! We are a trusted part of your team and will work alongside you and your clients. We look forward to helping you grow your business and helping changes lives with you.

 

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.

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

 

3 Ways You Could Be Hurting Your Credit│Changing Your Mindset

How You Might Be Hurting Your Scores

There are so many things that come into play to obtain a healthy credit profile. The hardest part of navigating the credit world however, is knowing what advice is accurate and possibly stumbling a few times in an effort to get back on track. Many times consumers think they have a good grasp on it all and then over night something changes. Have you been in this situation? Does it seem almost impossible to impact your credit scores in a positive way? Here are 3 ways you may not have known you were actually damaging your credit score, rather than helping it.

In order to keep your credit scores at the best they can be, there are a few things you can do on your own. While it may seem that the score is out of your control, you can manipulate it more than you thought!

  • Paying bills on time
  • Keeping balances below 30%
  • Only use credit cards for emergency or items you know you can immediately pay off
  • If you have a high balance, request your credit card increase your credit limits to get back down to the 30% utilization limits

Make Payments Too Late or Too Early

Late payments can damage your credit scores significantly.  Do you have your credit card payments set up on auto draft? For many people, the easiest thing to do is set everything up automatically after a pay period or a time when all other bills come out of their bank accounts. This is not a negative way to go about paying bills, but you can continue to work smarter and not harder in an effort to see an increase.

The credit card company that you are most likely using does not always report to the bureaus after you have made a payment. Knowing the cycle period on your accounts is vital. The credit card companies typically update a report once a month. If you want your credit card to look the best it can when you are applying for a loan and need your scores to look the best, pay the statement in full before the statement closing date. This will report to the bureaus as a zero balance which in turn, makes your scores look great because your utilization is down.

Please note: You can ask that your credit card company let you know when they report to the bureaus so you can be informed and make your payments accordingly.

Closing Cards Too Soon

Closing unused credit cards out seems to be a trend that many consumers follow. When you do this to a credit card with great payment history and low balances and several years on the length of history, you actually damage your scores.

 

free credit repair consultation

Do you know why that is?

When you close out a credit card with a low to no balance on it with a very high utilization ratio, you are telling FICO that your utilization amounts just went up significantly. Once the card is closed, it is not considered by FICO any longer. The longer the life on the credit card the better. If you have no use for the credit card, try to use it for a small purchase every 60-90 days.

Large Credit Card Balances

Your debts are heavily weighed by FICO and are a very large portion of the scoring model. If you have credit cards with large balances that you make payments on, on time that is great. However, the best way to really increase your credit scores is begin to pay down the balances on the cards as much and as soon as possible rather than the minimum payment.

If you have $20,000 in available credit and you have a $10,000 balance, your sitting at 50% of the utilization ratio which is not doing well for your credit scores. Just because you have a credit limit of $20,000, does not mean you want to push the balances out as far as you can to that limit. If you can, pay down the card as much as possible, rather than minimum payments on it. Once interest starts to kick in, you will want to start working that payment down quickly.

In Conclusion

If you start to make a change in these three areas of practice, you will start to notice a shift in your scores. Being smarter about your debt and understanding how FICO is working for, or against you will help you as you combat the credit world. 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.

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

 

Student Loans And Credit Scores│Available Resources For Consumers

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.

 

free credit repair consultation

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.

 

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

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’s info-graphic on 4 myths of collections reporting on credit reports.
credit collection myths infographic

credit collection myths infographic

 

Good, Better, Best │Understanding My Credit Ratings

Good, Better, Best and Bad

The internet and cell phones have now made it easier than ever to check your credit score as often as you’d like. Millennials are starting to check their credit scores more frequently than any other generation. This could be due to the fact that credit has become vital in many aspects of life. Whether you want to buy a house, car, or take out a loan, you can expect that your credit report will be scrutinized. Do you know what you are looking at when it comes to those numbers?

A Numbers Game

Your credit score is ever changing. While you may not suspect that things are moving and shifting, they are. Often times people think of their scores as either really bad or good enough. When you are browsing the internet and you start to check your credit scores, please take note that you are looking at a consumer score.

What is a consumer score? This is the scores you have access to online that may show higher than what a lender or bank would pull for you. These are called vantage scores and are not your true FICO score. These scores show higher so that you will start shopping around for products, or continue to spend. Your score may be significantly lower when you apply for a home loan. Once you understand this, the frustration or mind game you feel that happens when your scores are so different won’t be so frustrating. You should pay closest attention to what a bank or lender tells you your score is. So, what are all these numbers really saying?

  • Very Good : 740-799
  • Good : 670-739
  • Fair : 580-669
  • Poor : 300-579

Having scores higher than 799 is possible to obtain but can be hard. A 670 and up is considered exceptional. The better the score, the better the interest rates, among other things. If you are below a 700, there is definitely some room for improvement!

Increasing Credit Scores

If you have a low FICO score, you can bet that is due to a combination of factors rather than just one culprit. A credit score is made up of many different factors. If you are thinking your credit is low due to just inquiries, you are probably incorrect. The chart below demonstrates the factors that come into play with your FICO.

Facts on Fico

Positive Payment History

The largest section of the pie chart is your payment history. If you have been behind on bills, have late payments or cannot keep up current credit cards, your score will be dramatically impacted.

One late payment can potentially drop your score 100 points.

If the creditor sends your card into collection or charge off, we can take a look at your report and discuss what the next options are for your credit report or how you can try to make up for those late pays in other ways  to increase the scores. There is a method to the madness when it comes to your credit scores, you just have to know how to play the game.

 

free credit repair consultation

Credit Scores and Savings

If you take a look at the numbers above and fall into the category of poor or fair credit, you may notice how much you are having to pay on your auto or home loan. When your credit score is low, you’ll notice how much higher your interest is on your payments. While it is great that you may be able to get approved for a car loan or auto loan with a lower score, you would be better off waiting until you can improve your credit scores. We want to help you save!

Financially speaking, if you can wait and try to get your scores back up  you can be saving yourself a significant amount of money each month for your family.

Quick Ways To Improve
  • Become an authorized user on family member or spouse’s card
  • Look into a credit builder loan
  • Apply for a secured credit card
  • Invest in credit repair to get derogatory items removed

Your credit will be around for the rest of your days. While you may have made financial mistakes in the past, you can improve and learn from them. If you have found yourself in a huge hole, and have debt collectors and collection companies calling you daily, please get in touch with a company that can help you. At Credit Law Center we educate our clients on everything they may need to know, to continue to better their credit scores as well as represent them so that the calls can stop. We know the importance of great credit and what doors it can open when you reach that “very good” zone.

Open new doors today for your family, and invest in your financial future.

 

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.

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

 

Credit Cards For College Age Students│5 Back To School Basics

Back To School For College Students

Is your college student packed up and ready to start a new chapter already? At some point as a parent, you have probably discussed the do’s and dont’s during the first year when your student is ready to take off and start a new chapter on their own. You probably told them:

  • Be aware of your surroundings at all times
  • Don’t skip class
  • Get involved/meet new people
  • Have fun, but not too much fun

College orientation can be a whirlwind and there are so many things that happen very quickly prior to the first day of classes. It is no longer as easy as grabbing the list at Walmart for school supplies and heading off for your first day.

I can recall my mother and I signing up for a checking account at a bank that was local in the town my University was at. I was extremely excited to start school and was ready for all these new responsibilities.

With that being said, there were also some things I didn’t know about as an 18 year old out on their on my own. I was not aware of what all went into good credit scores.

Here are five tips to educate your college age student when it comes to credit:

1. The Reality

As a student you may not know what shows on your credit reports.  Student loans are just one of the items that may end up on your credit report.

Other things that may show up on your report in a negative way can be

  • late payments on utilities
  • a landlord that you or a roommate doesn’t pay with the lease and fines
  • retail credit cards
  • late payments on a student loan

If your student is making payments on their loan themselves, stress to them that late payments are very serious when it comes to their credit. The same goes for any kind of credit card or bill.

A late payment on a credit report can drop a score up to 100 points. Rebuilding credit can take a while and although it may not seem to be a big deal to a student currently, good credit is important and should be emphasized to your student.

 

2. Find The Right Fit For You

If there is an absolute need for a credit card as a student, you want to be sure to do all research before taking the next step and signing up.

When you are looking into applying for a credit card remember these few rules

  1. Shop for low rates
  2. Try a credit union
  3. If you apply for a checking or savings account with a bank, look into credit card options with them as well

 

free credit repair consultation

3. How To Use The Cards You Get

A credit card should only be for emergency use or to build credit. Students should keep credit card balances as low as possible. If they are using the credit card, try to keep the balance below 30% of the limit.

Credit card balances are reported to the credit bureaus each month. Your credit score will reflect lower scores, if your balances are very high or are reaching maxed out or close to the limit.

 

4. Building Credit

If your student is using credit cards, encourage them to monitor their credit.

The myth out there about having to keep a balance on your credit cards is not accurate. Remind your student as well, that most of the credit cards will be acquiring interest.

There are many companies out there that will offer credit reports for free or you can enroll in credit monitoring.

When pulling a credit report, take note that any consumer score that you can view online is a vantage score not an actual FICO score. Vantage scores tend to be higher than what an actual FICO is. FICO scores can only be given to  you by a bank or lender. However, monitoring your credit at this time is more about what is showing on the report and the timely payments, etc on the report rather than the bureau scores.

5. Put A Lid On It

In an era where it seems there are so many awesome things going on whether you are on Facebook or Instagram, it can be hard to miss out on fun opportunities that maybe you just cannot afford.

Although your student may want to take that awesome Spring Break trip with friends or they have a hard time without the newest clothes, continue to help guide them and help them understand the importance of making good financial decisions.

How Can My Student Start Building Credit?
  • Become an authorized user on family member card
  • Look into a credit builder loan
  • Apply for a secured credit card

There will be many important life lessons that happen through this next time period in their lives. As parents it is important we both teach and model good decisions and long lasting lessons. We hope this sparks a conversation in your household about good financial choices for your high school graduate or soon to be graduate.

 

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.

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

 

Saving Money At Closing Time│It Pays To Be Patient

Patience Pays Off

While going through the home buying process, the word patience for most may be a sore subject. Between the pre-approval process, the home search and offer, it can become a stressful time. Not to mention if you get caught in a bidding war or the home you want has issues after inspection. The laundry list of things goes on and just when you thought you had enough…we are asking you to pack on even more patience? Yes!

Pack your patience… and then pack some more!

Ways To Save

With such a large investment and risk, hopefully you are working with a great team that is advising you and leading you in the right direction throughout the home buying process. Just in-case you didn’t know, interest starts accruing the day you close and won’t end until the loan is paid off.

So what are some ways I can save?

Push It Back

Pushing your closing date to later in the month can help you cut down costs. Although this doesn’t mean anything towards savings through the life of the loan, it does help at the initial time, which we will break down later in this post.

If you are moving into a community with HOA fees associated, paying near the end of the month can reduce the amount of upfront cost there are due to the cost usually being prorated.

Interest, again is accruing and if you close early on in the month, you will be paying that accruing interest from the closing date until month end.

Ways You Benefit

We will set the scene for you. You are about to purchase a home where the purchase price is $300,000. You are set to close on June 15 and are ready to go!

Saving on interest may seem insignificant but look at the numbers:

Interest: 5%

Daily Interest ($3,000 x 5%) 1/365 =$41.10/day

Closing date June 15, prepay 15 days interest (15 x $41.10= $616.50)

If you would close on June 29, prepay 2 days of interest (2x $41.10 = $82.20)

 

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So What Did This Save?

A savings of about $535 just by changing the closing date. This is more of a cash flow preference than actual true savings.

How about HOA?

HOA Fees/day ($300/30) = $10/day

Closing June 15, you will be paying $150 ($10 x 15 = $150)

Closing June 29, you will be paying $20 ($10 x 2 = $20)

My New Mortgage Payment

With all of this in mind, you are probably also thinking about when your first mortgage payment will be due. Your mortgage is paid in arrears. If you had been paying as a tenant, you were paying in advanced, for the upcoming month. Whereas your mortgage payment is made toward the end of the month.

The home you closed on at the end of June in order to save money, means your first payment wouldn’t be due until the end of August.

Be Prepared

Although these ideas may save you money at the beginning, it is very important to know financially what is going to be right for you. Whether you are leaving a rental property, or selling a previous home, talk with your trusted lenders about the options you may have and how each one will play out. As a buyer, remember that you do have the power to negotiate and make sure everything pans out in a way that will set you or your family up for success.

 

 

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

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.

 

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

 

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

 

Credit Scores Dropping Quickly│How Can I Recover?

Credit Scores Dropping

Have you noticed a random decrease in your credit scores recently? There are many factors that can cause your credit scores to fluctuate. Many consumers do not understand that a credit score has no memory and can change immediately due to activity or changes that can happen as soon as you make a payment or use a credit card.

Can I recover from a drop?

Do not panic. Your scores really do change so much, so there is no reason to worry unless you have done some significant damage to a report like went late on a payment. A few things to know ahead of time, prior to calling your credit card companies or bank about your report-

  • If you are pulling credit scores on consumer sites like Identity IQ or Credit Karma, you are looking at consumer scores or vantage scores. These are not your FICO scores. These scores are more of a suggestion of what is going on but not always right or exact.
  • If you want to know your true FICO scores, the only place you can get the real FICO score is an actual lender or banking institution.
  • There are 56 different versions of FICO. Your home loan is going to be using a different version of FICO than the dealership that ran your credit. Don’t expect to see the same scores because they will be off.

 

What Do Inquiries Do To My Credit?

Your scores can be decreasing due to one too many inquiries on your credit report. A good rule of thumb is to only inquire about 10 times for every 12 month period.  Once you start shopping around for vehicles or homes and having your credit pulled more than the suggested number, you will start to notice your scores dropping.

 

How Does A Late Payment Hurt My Credit?

Unfortunately, late payments have a dramatic impact on your credit scores. This is the hardest thing to get removed from a credit report but we still try to go after late payments and try to get them removed.

These late pays can potentially drop your score 100 points.

If the creditor sends your card into collection or charge off, we can take a look at your report and discuss what the next options are for your credit report or how you can try to make up for those late pays in other ways  to increase the scores.

 

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What If I Don’t Have Any Credit?

Not having any credit cards or installment loans will also keep you at low scores. In order to have good credit scores, FICO has to have something to grade you on. We advise 2 credit cards and 2 installment loans (auto, home or personal). There is a misconception that no credit keeps you from having bad credit. That is not true and in order to qualify for a car loan or auto loan, if you are not showing that you can make payments on time and be trusted with a loan, a lender doesn’t know how trustworthy you are to loan to. If you are hoping to get a loan, it is important to start establishing credit for at least 6 months to a year and build and show positive payment history. If you are in credit repair and have noticed that your scores are dropping but derogatory items are falling off, it may be due to the lack of credit you have established, or that the credit you do have is not being utilized the right way i.e. high card balances above 30% utilization or recent late payments which will keep your scores down.

 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)
How Can I Start Building Credit?
  • Become an authorized user on family member or spouse’s card
  • Look into a credit builder loan
  • Apply for a secured credit card
  • Invest in credit repair to get derogatory items removed

Above all, be patient. Building and establishing credit takes time. If you are thinking about buying a home or vehicle, start planning ahead and looking at your credit now. Credit impacts many factors like interest rates, your insurance and many other things. Great scores mean more savings in your pocket!

 

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

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’s info-graphic on 4 myths of collections reporting on credit reports.
credit collection myths infographic

credit collection myths infographic