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Credit Score

Financing A Vehicle II Where To Start

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.

Fact or Fiction? A Look At Hard Inquiries

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.

free credit repair consultation

       -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

Too Many Inquiries

Getting Ready For A New Car!

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.

freezing your credit

Closing Credit Cards? How Can It Affect You?

From a young age we were taught the importance of living debt free. When assessing your personal finance goals, you may find it tempting to close out some of your credit card accounts in an attempt to lower your debt. To many, it may feel good to close out an account that held negative payment history or feel at piece with one less credit card in your wallet to temp unneeded purchases. While the sense of accomplishment may be present, the effects of closing a credit card account can be a detriment to many aspects of your credit report.

 

When Should I Close my Credit Card

In terms of  your credit score; canceling your credit card can harm you in a few different ways. A large portion of your credit score is dependent on the length of your credit history. The longer you make on time payments on an account, the better impact it will have when building your credit score. The good news is, if you have established a positive credit history with a particular card and do decide that closing it is the best option; it will be ten years before that cards history falls off of your account. This means that even if the account is unused, it will still factor into your credit history length!

Your credit history length is not the only aspect of the report that can change when closing a credit card account; your credit utilization rate will also take a hit. Your credit utilization rate is based off of the available amount used out of the cards available limit. This means that the lower the balance, the more positive effect the account will have on your score! Depending on the amount available to you, cards removed with a higher limit will harm you more than a card with a small available limit.

If you are attempting to establish credit, then closing your account can be a harmful setback. If you have already established positive payment history and have other revolving account active, closing a card may not harm your your score or harm it at all.

Looking for help in deciding if you should close out one of your credit cards? 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 Credit Law Center a call at 1-800-994-3070 we would be happy to help.

CREDIT REPAIR CONSULTATION

How Does Canceling A Credit Card Hurt My Score?

A single credit card can be the deciding factor when it comes to achieving a higher score. The majority of your credit report analyzes how well you are able to manage your open accounts and how trust worthy you are with the funds you have been allotted. A exemplary credit score will mirror the individual who holds long term, well managed accounts.

Once you have closed an existing account, the amount of available credit to be reported and your credit profile becomes less diverse. It is important to know that opening too many accounts or applying for new accounts too frequently can also hurt your score. The key is to manage the accounts you have currently open and not apply for new ones if the current accounts are not in order.

As mentioned previously, your credit utilization is another factor that is effected when a credit card account is closed.  Say that you have 3 cards with $5,000  in available credit ($15,000 all together). If you utilize $3000 of your limit per month, you are sitting at about a 20% utilization rate among all accounts. If you happen to close out one of these cards and keep using $3,000 each month, you have risen your credit utilization rate to about 33%.

 

Should I Re-Open My Closed Accounts?

Once a credit card is closed, the only way to re open the account is to contact your creditor and attempt to negotiate a reopening of the account. Reopening the account can prove to be troublesome in many cases as the creditor will treat the reopening as a new account. The creditor will pull your credit report and evaluate your credit habits since closing the account when determining whether or not to reopen your card.

Instead of closing your card,  an alternative measure would be to keep the card off of your person in a safe place and use it only on rare occasions to keep it from going inactive. A small charge should keep the account active and avoid the cards automatic cancellation.

 

Always Remember

  1. Do not close positive credit accounts.
  2. Avoid opening a gratuitous amount of accounts (just a couple of cards should do the trick).
  3. Only attempt to reopen a closed account after you have established good credit practices and can show credit worthiness.
  4. Assess your personal credit situation before considering  closing a card.

 

Have you experienced a drop in your credit score after closing a credit card or a decrease in your cards limit and want to get your credit back on track? Follow us on Facebook or join us on our site for tips and tools to help get you back on the road to better credit!

 

 

Decrease In Credit Card Limit? What can I do?

How Does A Decrease In Credit Limit Effect Me? 

Your credit utilization rate is one of the most important factors when it comes to your credit score. Depending on how much of the available balance you use will reflect what kind of borrower you are and can be the deciding factor in a substantial credit boost. The lower your credit utilization rate, the better impact the account will have on your credit report. 

It can be frustrating to hold a lower credit utilization rate of 15% on an open trade line, but find that with a drop to your allotted limit, you have almost doubled your original rate. This can lead to lower credit scores and curbs one’s buying power substantially! A sudden change in your credit habits can also portray you as a risky borrower and can spur other lenders to reconsider limits as well.

Can They Do That?!

Just as a card issuer can raise your credit limit as a reward for your continued loyalty or due to your personal request, they can also lower the amount you can access when borrowing from them. This can happen for a multitude of reasons but primarily is due to the cardholder being seen to have a higher risk of default.  An example can be seen with holders that have added an authorized user onto the account; if one has a substantially lower credit score, the lender may see the account as being at risk. Another example comes with the recent dealings of the Covid 19 epidemic. With many borrowers experiencing financial difficulties in the last year, lenders have had to take protective actions with the exponential rise of credit utilization from their borrowers. 

Though federal laws provide some protections related to credit limit decreases, banks usually have free rein to edit your credit limit as they see needed. This can be seen as an unfavorable or even shady tactic, but as they are the ones lending the money, the ball rests in their court. 

What Are My Rights? 

If the credit changes do not breach your cardholder agreement or federal credit regulations, issuers can make changes to your card’s terms as they see fit. Currently, there are no laws that can protect consumers from a credit limit decrease or the damage that will potentially occur with the change. 

The Fair Credit Reporting Act does require the issuer to send an adverse action notice to the consumer when they take an action based on your credit report. This does protect you from misinformation if another person’s poor account history is added to your report; you will receive notice of that change and can take appropriate action to correct it! 

The good news is that it is extremely rare for an issuer to reduce your credit limit lower than the amount you have already charged to your card (IE: if you have a credit utilization rate of $2000 and you have charged $1500 to the account, it is extremely unlikely for the issuer to lower the limit below that $1500). If there is a rare case of the issuer decreasing the amount below the current borrowed amount, there are CARD Act provisions that can protect you from any fees that may come from maxing out the account. With this law in place, your issuer is unable to charge the “over the limit” fee within 45 days from the credit limits change.

Has your credit score dropped because of a recent cut to your credit limits? 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 Credit Law Center a call at 1-800-994-3070 we would be happy to help.

CREDIT REPAIR CONSULTATION

 

How Can I Get My Old Limit Restored? 

Now that your limit has been cut, what are some steps you can take to begin restoring it? If you have had your credit limit lowered, the first thing you need to do is verify with your card issuer and ask a representative for an explanation for the credit limit drop. Depending on the reason for the limit cut, there are a few things you can do!

If the cutback was caused by a financial setback that prevented you from making your payments or keeping your balance in good standings, just explaining the situation can make all the difference.  This could be going over what exactly happened that threw off your standing or an explanation of what steps you are going to take to get everything back in order! Many issuers would be more than happy to work with you to restore your credit limit if certain criteria are met! This can be anything from making on-time payments over an extended period of time or paying down your balance to a certain number.

Another way you can potentially help your situation would be to write a goodwill letter to the issuer! A goodwill letter can also prompt the issuer to remove a late payment from the report depending on your credit history. This option can take substantially longer to take effect and is only valid if you held prior positive payment history.

Your issuer is not required by law to make changes to restore your previous credit limit and these prior attempts may not show results. If you are denied and you believe that the card company is neglecting to assist you in any way, you can file a complaint with the Consumer Financial Protection Bureau to attempt to provide urgency to the situation.

 

Don’t Put Yourself At Risk

It is not common for card issuers to make changes to your credit limit, but there many cases where it does happen. There are a few ways that can help ensure you are never the target of a credit limit cut. Be sure to monitor your credit report for any changes, errors, and fraudulent accounts that could lead to a credit limit cut. You are entitled by law to one free credit report per year from each of the major credit bureaus, and it can be obtained at AnnualCreditReport.com. There are many other monitoring services out there like Credit Armor that take a deep dive into your credit report and provide helpful tools to help dispute and correct misinformation on your report.

The best way to prevent a decreased credit limit and keep your credit in good standings is to make sure to keep your credit utilization as low as possible, pay your balances on time and monitor your report for any inconsistencies that may pop up!

 

 

credit card debt

Is Your Credit Card Company Helping You During the Virus?

 

Many businesses have shut down during the coronavirus outbreak, and a lot of people are wondering how they will be able to pay their next, mortgage or credit card payments. This article will help guide you on what you can do and where you need to go to find some help. At the bottom there is a list of  most of the major credit card companies in the country with what they are doing and their contact info!

 

Image result for credit cards

 

Some consumers have financial concerns about emergency savings and being able to keep up with the bills.

The social distancing programs have shuttered restaurants, bars, gyms, movie theaters and other places where people like to gather. This has a lot of people wondering how they will be able to afford their next mortgage payment or even credit card payments.

For many Americans, their primary source of income has been called into question (for a period of time). Consumers are nervous because they don’t know how long it will last and how they will stay up with all there bills until they can get back to work.

Banks are stepping up to offer relief amid virus

Some credit card companies are allowing customers to skip their next monthly payment (some are willing to do more than  just one) without charging interest. These include Apple CardAmerican Express and Capital One.

The key here is without interest accruing – many other issuers are offering temporary relief like reduced minimum payments or forbearance, but interest is continuing to stack up, which can add up.

Most important part here is if you’re having trouble, contact your credit card companies and ask for help. Consider using online chat or social media, because many call centers are light staff and very busy. So while you are quarantining and watching Netflix reach out to your credit card companies and see what they will do for you. Remember if you are having trouble making the payment reach out to the creditor communicate with them and evaluate what they have to offer and always ask how it will be reported on your credit report. If you run into questions you don’t understand please reach out to us we are here to help.

See list below from creditcards.com is your credit card company on it?

 

American Express

Cardholders who are having difficulties paying their bills can contact American Express by calling the number on the back of their card or by online chat or the Amex app to discuss their situation.

Solutions are tailored to an individual’s situation. These might include offering flexibility in paying bills or directing them to American Express’s financial hardship program. Under the financial hardship program, consumers might be able to have reduced monthly payments, get temporary relief from late payment fees, get a temporary reduction in interest rates or prevent their accounts from going past due.

In a March 17 report, CreditCards.com sister site The Points Guy noted some of its readers were getting relief from Amex in the form of refunded interest charges and waived or refunded late fees on both personal and business credit cards. However, one reader reported that if you accept the assistance, your account is frozen until it’s paid off and you can’t use your Membership Rewards.

Bank of America

A customer who has trouble paying their credit card bill related to the coronavirus is encouraged to call Bank of America customer service at (800) 732-9194, visit a bank branch or connect via online banking or mobile application for assistance. The company also has a hardship program in place to provide assistance to consumers and small business clients.

Barclays

Barclays urges credit card account holders to call for assistance if they have problems paying their bills because of COVID-19. Barclaycard’s number for general inquiries in the U.S. is (866) 928-8598.

Capital One

“We understand that this is a time of uncertainty for many people, and we know that there may be instances where customers find themselves facing financial difficulties. Capital One is here to help and we encourage customers who may be impacted to reach out to discuss how we might be of assistance,” Capital One said in a statement.

Because each customer’s situation is different, the bank encourages customers to call it directly. To contact Capital One customer service about an existing account, call (800) 227-4825. Options might include reduced minimum payments or fee waivers.

A March 17 report by the New York Times suggested Capital One is allowing cardholders to skip payments without incurring interest if they request it. (The same report noted Barclays and Bank of America are allowing some customers to pause their payments while still accruing interest, while Discover “would not commit” to stopping interest charges.)

See related: The Fed’s rate cuts won’t help much if you’re in credit card debt

Chase

Chase encouraged its customers to call the number on the back of their cards if they’re affected by COVID-19 and need help with their accounts.

Citi

The bank said it is offering a range of assistance to impacted credit card customers, including offering increases in credit lines and forbearance from collections. Cardholders can call the number on the back of their cards to find out about assistance programs.

For those with bank accounts, Citi is offering waivers on monthly service fees and penalty waivers for early withdrawals from CDs. Customers can contact the bank for assistance with their individual or small business needs.

“We continue to monitor developments closely and will evaluate additional actions to support our clients and communities as needs arise,” Selva said.

Discover

Discover will be extending relief to qualified customers who are experiencing financial difficulty caused by the spread of COVID-19. Discover customers may receive assistance that can include support related to payment timing, fees and late payments.

“We encourage them to contact us by calling, and are directing them to www.Discover.com/coronavirus for phone numbers for each product line and other FAQs,” Discover said in a statement. “We also can provide relief through our mobile text app, which connects a customer directly with an agent.”

Goldman Sachs

Apple Card customers were sent an e-mail offering enrollment in an an assistance program that will allow affected cardholders to skip their March card payments without incurring interest charges. If you have questions, contact an Apple Card specialist at (877) 255-5923 or via chat in the Wallet app.

Synchrony

The bank said it is monitoring the situation to determine what action is needed.

Truist (formerly SunTrust and BB&T)

Truist is offering payment relief assistance to customers with personal and business credit cards, among other products. The bank is also offering 5% cash back when SunTrust and BB&T consumer credit card holders use their cards for qualifying purchases at grocery stores and pharmacies through April 15, 2020.

Truist encourages customers to call (800) 786-8787 or visit SunTrust.com if they’ve been negatively affected by the coronavirus crisis.

“As we assist clients and businesses who may be affected by the coronavirus situation, we’re also listening and learning from those conversations to help us evaluate and possibly implement additional client relief measures as they emerge,” the bank said in an e-mail to customers.

Wells Fargo

The bank encourages consumers to call customer service at (800) 219-9739 to discuss options to aid in their specific situation.

 

Blog- Bo Thomas

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 Credit Rating, Not A Character Rating

The People Behind The Credit Score

At Credit Law Center we fully believe in the people behind the credit scores. A company is only as good as its “Why” and what matters to us most, is our clients. We recognize that bad things happen to great people and wish to help improve individuals buying power, like the client testimony below.

 

A Credit Rating, Not a Character Rating

“After 15 years of marriage, I began an 18 month long divorce. In my marriage, my main job was to care for our 4 kids and maintain the home. We puchased 2 homes during our marriage, a few rental properties, and vehicles. I assumed I had credit, as anyone would but figured out quickly that wasn’t the case. Because I had been a stay home mother, and only working off and on during that time, I wasn’t on any of the loans, everything was in his name.

Hope (2)

I was unaware that he emptied the checking and savings accounts. So there I was, not a dime to my name, absolutely no credit to speak of, and four little mouths to feed. I started a new job quickly after the separation but that income wasn’t enough to pay for day care cost and all the other expenses that go along with life. Within 60 days I had 3 jobs while trying my best to be a great mom to my kids. I was exhausted. That Christmas I had $85.00 to spend for 4 of my kids!

Nine months into the divorce when I thought things were already bad enough, my car was repossessed. Months later I found out my ex-husband had not filed taxes in a long time, so I then had a huge tax lien on my credit. At this point, I had no where to turn. I couldn’t rely on my family financially, and began to fall deeper and deeper into an emotional and financial hole. Establishing credit was impossible. I had a huge tax lien, and didn’t have any extra money to do anything about it.

Your Guide

Luckily, I met a credit advisor from Credit Law Center and he thought he may be able to help me. I felt like it was a huge waste of his time, there was NO way he could do anything for me. We devised a game plan within 30 minutes and he took the time to give me info for a CPA that would help me with the IRS on my tax lien. The cost for credit repair was not as expensive as I had thought and he offered to work out payment arrangements with me! I appreciated being treated like a person and it was clear that my advisor was taking my situation seriously and that he truly did want to help. That was the first time in over a year I had any kind of hope. I began to establish credit in my name, Credit Law Center successfully removed all my medical collections with in 6 weeks and the CPA he referred me to came up with a compromise with the IRS. Before I met them, I had no idea of where to start or how I was going to do it on my own. I am so grateful now to have good credit, financial freedom, and my life back.”

Are you unsure what the next step is for you? Let one of our Credit Advisors guide you back to financial freedom today! 816-994-4600

Article by Breana Washington

Credit Repair- Credit Builder

The 5 Easy Steps To Building Credit

I Have No Credit History!

“I’ll just pay cash for everything.”

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

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

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

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

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

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

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

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

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

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

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

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

 

Slow And Steady Wins The Race

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

 

Author- Joe Peters

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

If you are hoping to dispute and work on your credit report on your own, here is a link that provides you with a few ideas on how to go about DIY Credit Repair.

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Denied! Millennial’s Battle With Credit

Combating Credit in this Era

Let’s start out by saying what everyone already knows, the credit system is flawed and predatory in many ways. The concept of paying back what you have borrowed is pretty straightforward and  providing an incentive to pay back your debts is needed, but how credit affects your life outside of your initial purchases is where we encounter some of the initial issues. Combating fraud, data entry incompetence, lack of history, credit discrepancies and general ignorance of the system stand between us and the life we are meant to live. If life is what you make it, then the person that is financing the jet ski under my name has been living my best life! 

The Necessity of Credit

Credit seems to be this metaphorical door that when opened, can lead us down a road of wonderment and bliss, but can also send us to the brink of financial destruction. When I thought of credit when I was in highschool, I believed that credit cards were to be used when an emergency arose and you didn’t have the money to handle the situation and was a factor in acquiring a home and vehicle . Now I understand that credit makes up a little bit of everything in our life; jobs, car insurance, renting an apartment, bills, the list goes on and on. Are we really living our own  life here or just borrowing pieces of it from one another until we are unable to borrow anymore? Am I just going to be stuck in a constant wage grind to keep everything paid off and my scores high? Why didn’t schools teach us how any of this works instead of the symbolism in Moby Dick and square dancing? Sit down, be quiet and stop asking questions that don’t pertain to the rich world of Geology! 

You Need Credit to Build Credit.

Is anyone else getting sick of the catch-22 that “you need credit to build credit?” As a millennial, I think I have heard this more than the phrase “You need 5 years of prior experience for this entry level position.” According to Bankrates latest survey  58% of millennials have been denied some sort of financial product due to their credit score and the rate of denial seems to increase as the years go by. I swear I haven’t been using my credit to finance avocado toast and Ricky Martin vinyls, so what is really going on and why are denial rates so high? Well, this failure rate may partially be due to legislation enacted in the last decade. “An unintended consequence of the CARD Act, which went into effect in 2010, is that it has become much harder for people in their early and mid-twenties to obtain credit,” says Ted Rossman, industry analyst at Bankrate. “Establishing credit is a lot like getting started in your career. Everyone wants you to have experience, but it’s hard to get that first experience.” Considering that the length of credit  history makes up a little over 15% of your overall credit score, lacking this “experience” is detrimental to personal credit progression.

How Am I Supposed To Build Credit?

Building credit with no credit can seem like a daunting task due to the “you need credit to build credit” motto that resonates like nails on a chalkboard, but this is not an impossible feat by any means. My time at Credit Law Center has taught me that building credit is like building a home and that you need to form a sturdy foundation before you can begin to think about anything else. In this case, our foundation starts with a secured credit card acquire from our bank. Keeping a low utilization rate of your card and making payments on time are the first step in building this house and getting on with your life of working 2 jobs to afford basic essentials! Next, acquiring  an installment loan and an actual credit card can really get this ball moving. Don’t forget, the second verse is the same as the first, “make payments on time and hold card utilization below 30%!”. 

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Ok, I’m Building Credit…What’s Next?

Now that your credit is slowly climbing it is time to STALK. YOUR. CREDIT. I mean we are talking white radio van in the neighborhood kind of stalk, creepy phone calls and obscure photographs of that 750 score in the background! Ok, that may be a little much, but you really do need to monitor your credit with vigilance and poise if you want to keep those numbers up. According to the Fair Credit Reporting Act, you’re able to request one free credit report per year from Experian, Equifax and TransUnion. OK, one pull a year is really not going to cut it in this case so we need to get a little creative in how we acquire our information. The good news is that many credit card companies offer free tools that allow you to view your scores and the items associated with them monthly.

The Bottom Line

I wish I could say that I have been able to provide you with every tidbit of information that you will need to navigate this post apocalyptic  credit wasteland we are all attempting to survive in, but I have only scraped the surface of this beast. The bottom line is that credit is not always fair and we are stuck in this together without any sight of a “No Borrower Left Behind” law gracing us in the near future, but having a strong understanding of your score and knowledge over how to build credit in a healthy fashion can be the defining factor in a successful life  or a stressful one.

Article by Joe Peters

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

If you are hoping to dispute and work on your credit report on your own, here is a link that provides you with a few ideas on how to go about DIY Credit Repair.

A Credit Rating, Not A Character Rating

The People Behind The Credit Score

At Credit Law Center we fully believe in the people behind the credit scores. A company is only as good as its “Why” and what matters to us most, is our clients. We recognize that bad things happen to great people and wish to help improve individuals buying power, like the client testimony below.

 

A Credit Rating, Not a Character Rating

“After 15 years of marriage, I began an 18 month long divorce. In my marriage, my main job was to care for our 4 kids and maintain the home. We puchased 2 homes during our marriage, a few rental properties, and vehicles. I assumed I had credit, as anyone would but figured out quickly that wasn’t the case. Because I had been a stay home mother, and only working off and on during that time, I wasn’t on any of the loans, everything was in his name.

Hope (2)

I was unaware that he emptied the checking and savings accounts. So there I was, not a dime to my name, absolutely no credit to speak of, and four little mouths to feed. I started a new job quickly after the separation but that income wasn’t enough to pay for day care cost and all the other expenses that go along with life. Within 60 days I had 3 jobs while trying my best to be a great mom to my kids. I was exhausted. That Christmas I had $85.00 to spend for 4 of my kids!

Nine months into the divorce when I thought things were already bad enough, my car was repossessed. Months later I found out my ex-husband had not filed taxes in a long time, so I then had a huge tax lien on my credit. At this point, I had no where to turn. I couldn’t rely on my family financially, and began to fall deeper and deeper into an emotional and financial hole. Establishing credit was impossible. I had a huge tax lien, and didn’t have any extra money to do anything about it.

Your Guide

Luckily, I met a credit advisor from Credit Law Center and he thought he may be able to help me. I felt like it was a huge waste of his time, there was NO way he could do anything for me. We devised a game plan within 30 minutes and he took the time to give me info for a CPA that would help me with the IRS on my tax lien. The cost for credit repair was not as expensive as I had thought and he offered to work out payment arrangements with me! I appreciated being treated like a person and it was clear that my advisor was taking my situation seriously and that he truly did want to help. That was the first time in over a year I had any kind of hope. I began to establish credit in my name, Credit Law Center successfully removed all my medical collections with in 6 weeks and the CPA he referred me to came up with a compromise with the IRS. Before I met them, I had no idea of where to start or how I was going to do it on my own. I am so grateful now to have good credit, financial freedom, and my life back.”

Are you unsure what the next step is for you? Let one of our Credit Advisors guide you back to financial freedom today! 816-994-4600

Article by Breana Washington