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The Cost Of Low Credit Scores│How Your Score Is Costing Thousands

How Your Score Is Costing You Thousands

If you walked into a room full of people and asked them “Who would like to save more money this year?” I think each person would raise their hand extremely high. Whether you make great money, were born into money, or have little money to your name, credit still has a large role in your purchasing power.

Low FICO Scores

Your credit scores play a major role in the financial freedoms you have. There seemed to have been a misconception that if someone made great money, the credit scores didn’t really have too much pull. Credit impacts us all, from the moment we start to take on paying bills, buying cars, cell phones etc.

Your employer might even take a look at your credit report and deny you for a job if they are low.

Contrary to popular belief, FICO impacts us all, across all demographics.

So, how does a low credit score cost you more money?

 Higher Interest Rates

If you were to apply for a 60 month car loan with a credit score between 500-589, one could expect to be quoted around 15.2% interest rate. That means that your poor credit is costing you and holding you back from lower interest rates (home and auto) and you are actually seeing your money be used in a way that is not benefiting you or your credit score.

Denied Financing

If you have low credit scores, you may have been denied a bank account, credit cards, a home loan or worse. While you may feel defeated right now, there are several ways to start improving your score. If you are in a tight spot financially and are thinking of completing credit repair on your own, please visit our DIY blog to learn more. If you would like to speak with a credit advisor about how to improve your credit score quickly, please contact Credit Law Center today.

How Do I Make A Change?

It is a good idea to monitor your credit scores. If you have noticed that you have any the below items on your credit report, you might be in need of credit repair.

  • Collections
  • Charge Offs
  • Repos
  • Bankruptcies
  • Foreclosures
  • Tax Liens

If you are thinking about going and paying these items off in hopes that they will increase your credit scores, rethink that option. Your credit report will change, but not in the way you want. If you have a 10 year old medical collection reporting and you decide to pay that collection off, the last date of activity on your report changes to the day you pay it. FICO is looking at your activity and weighing it heavily. Your score may decrease significantly due to the last date of activity being updated. There is less than a 2% difference whether a collection is paid or unpaid, most weight is given to how recent the activity. This does not mean we are advising you to not pay your bills or let things fall into derogatory status.

 

free credit repair consultation

The easiest and quickest way to start seeing a change in your credit scores is to start paying down balances you may have on current credit cards in your possession. This will have a direct/immediate impact on the score. If you are planning to start paying down your cards, try to keep the utilization down below 30%. This will help you start to see a swing in a positive direction.

The largest factor on your credit report is your payment history. Late payments are huge when it comes to dropping the credit scores. At any given time, always try to make at least the minimum payment on your loans.

 

Facts on Fico

 

Saving Money Starts Here

Whether you are looking to get into a new home or buy a new car, your credit scores are vital. If you are hoping to make changes for your financial future, you can start taking small steps now to get back on the right path. If you are in need of assistance today, our credit advisors can help educate you on what you can be doing on your end while we work on derogatory items on the credit report that are hindering you from higher scores.

 

 

 

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.

 

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)

 

free credit repair consultation

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 Cards With High Balances and Interest Rates│Transfer Options

Credit Card Debt & Balance Transfers

Where is your credit card debt currently at? Are you making minimum payments that don’t make a dent once your interest rates kicked in? It may be time to weigh a different option now that you are hoping to make some headway on your current debts.

Your Balances and Interest Rates

While it is always important to take into consideration the best options for you and your financial situation, we have several people that want to know more on the option to do a balance transfer. Here is how in a few short steps:

  1. Check your current credit card balances
  2. Pick a card to transfer to
  3. Read all information and fine print
  4. Apply for the balance transfer cards
  5. Start paying debts

Below are the steps explained in detail. Before making any quick-second decisions, be sure to educate yourself on all of the pros and cons to the balance transfer.

1. Current Credit

When you are thinking about making a balance transfer it is important to figure out what your interest (APR) is on the current credit card. When looking for a balance transfer card, you’ll want to find one that has low (no) fees and will take the actual amount you would be transferring over.

2. What Cards To Transfer To

Researching what credit cards are best to balance transfer to is very important. Depending on the amount of debt you have, you may not be able to transfer all of the debt to the card you choose. Many balance transfer cards offer a 0% introductory period for an allotted time frame.

  • Check the promotional period
  • Check how long the low APR will last

3. Terms and Conditions

The most important part of this transfer is understanding what the fine print states. Although the balance transfer could help you out, many of the cards have balance transfer fees associated with them, and every time you transfer balances over.

Make sure that the transfer is really going to be financially beneficial to you before moving money around. Figure out what the balance transfer fees is and then you will want to calculate the transfer fee cost, how much you could potentially save on interest and go from there.

Some balance transfer cards won’t let you transfer within the same bank, such as Citibank. If your balance is already on one Citibank card, you cannot move it to a balance transfer card.

It is also possible that when the creditor runs your credit and is deciding if you are approved, you may not become approved for the amount you are trying to switch over.

 

free credit repair consultation

4. Application Process

As with any other credit card, you must become approved first. If you have completed the above steps and are ready to make the switch, go ahead and apply for the balance transfer card.

More than likely you can complete a balance transfer online or by phone. You will be giving your account information and the amount of the balances you wish to transfer over to them.

On average, the process takes 7 to 10 business days. Most importantly, it is important to continue to make your payments until you have been given confirmation that the transfer successfully went through.

 

The Pros Of A Balance Transfer
  • Streamlining all credit payments onto one card
  • Start fresh with low APR
  • Get ahead on paying debt
  • Lower interest than previous credit card
The Cons Of A Balance Transfer
  • If you do not conduct research, you may end up with higher interest rates
  • Transfers can be expensive
  • Could drop your credit scores (due to opening a new line of credit)
  • Risk of more debt-likely that your credit limit increases and more credit is available to you if you can’t control spending habits

Your Final Decision

We understand that life happens and the average consumer does own credit cards. In an effort to set our clients up for success, we want them to understand and become more educated about the way the credit world works. As always, continue to educate yourself and always read the fine print! If you are using the balance transfer card for what it is, and in an effort to pay off your debt, not get into more, you will eventually get there. Keep chipping away at the payments you are making and always try to keep your balances low and payments on time.

 

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.

 

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.

 

free credit repair consultation

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

 

Credit Scores Across States│Where Do You Rank?

Battle of the States

Have you ever wondered what part of the United States has the best/worst credit scores? It may come as a surprise to you but, the highest scoring state, Minnesota has an average credit score of 709. What may come as even more of a shock is that yes, they do have credit cards! On average, folks in Minnesota have 2.9 credit cards with an average balance of $5,911. You read that right! The take away from these numbers is that yes you can have great credit, while using and maximizing the credit cards you do have to obtain great credit scores.

Credit Scores across the states

We do not condone racking up credit cards by any means but there are several misconceptions out there about how one obtains good credit. Unfortunately, there is no snap of the fingers to make scores jump 100 points over night but we do know several tricks in an effort to get to the point that you may be trying to get to.

If you are looking for

  1. A home loan
  2. An auto loan

There are several factors that come into play with your credit. Many people do not even know or understand how a FICO score is made-

35% of your FICO is your payment history, 30% amount owed, 15% length of credit history, 10% new credit and the credit mix

So what is the trick?

Is there a trick to better credit scores?

Is there at trick to these high scores? One could argue that there are tricks to the trade.

Imperfect credit scores do not happen over night, the same goes for scores like people in Minnesota with 709. In order to obtain great credit scores you need to know what a good credit mix looks like. At Credit Law Center we advise that a consumer should have two great revolving credit cards and two installments. We also advise a few other steps in order to obtain great scores:

  • Authorized user- a spouse or family member with a credit card with a low balance and several  years of history is a great way to get a quick boost in scores
  • Pay for deletion-asking a creditor/collector to remove an item from the report if you pay a certain amount
  • Lower utilization-paying down a card more than the minimum payments will dramatically impact your credit
  • Inquiries on your credit report can bring the score down

Your Next Step

If you have completed the above steps and don’t see a change in scores, you may have negative items on your report that are weighing heavily like collections, too new of credit cards, or something as significant as a bankruptcy, tax lien, or judgment. Have you looked at a credit report lately? We can go through the credit report with you and discuss what steps you may need to take in an attempt to maximize your efforts.

free credit repair consultation

Did you know?

  • It is actually better for our economy for consumers to have lower FICO Scores. The higher the interest rates, the more money circulating through the economy as well as the increase in the value of currency.
  • There is a misconception that you will have better credit if you do not use credit cards. That is inaccurate, as FICO needs you to have/use credit to have the ability to grade you to come up with your FICO score.
  • Having only installment loans (auto, home, personal) and no credit cards, or only having credit cards, and no installment loans keeps your credit score down 10% then what it could be if you had a good credit mix.

Are you hoping to increase your credit scores and get on the track to better credit? Contact us today and one of our credit advisors  will complete a free consultation or 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

 

High Utility Bills & High Temperatures│5 Ideas for Smart Summer Savings

5 Ideas for Smart Summer Savings

The first day of Summer officially arrived although it seems we have skipped most of Spring this year!  Have you noticed your bills are much higher than the previous Summer? It’s no surprise that while the days are longer and hotter, utility bills are headed on up too. We don’t expect that anyone would choose to sit inside with the air off, so with that, we have a list of some ways to save so you can stay cool while keeping your costs at a minimum.

 

Air Dry Your Clothing

Do you have a place to hang your clothing outside? Cutting back on your electric bill by letting all your laundry air dry is a great way to save this Summer. Although the time it takes to dry your clothes does take longer, it will keep your clothing looking brighter and actually extend the life of the clothing rather than tossing it in the dryer every time.

Find A Pool

Pack a snack and spend the day by the pool. This is a great way to give your AC a much needed break for the day. After you leave the pool, find a spot for a shaved ice or ice cream cone and soak up some of the air and cool off.  For parents, this is a great way to get the kiddos tired and settled down for a quiet movie and bed time!

Here are a few other awesome ideas for your kids to do this Summer that are free!

 

free credit repair consultation

Unplug

We tend to leave all of our phone chargers, laptops and other devices plugged in at home when we finish using them. Before you lock the front door, walk around your home and unplug any devices that are not being used. One way to eliminate this head ache is plug everything in a power saving strip so that when you are in a rush, you just turn the strip off and can head out the door or invest in an outlet timer.

Clean Up

The refrigerator is one appliance you cannot unplug but you can still cut costs by keeping the back side of the fridge clean! Once you move all the toys, goldfish and crumbs out of the way, you’ll see the coils on the fridge in the back or bottom of the fridge. They need a good cleaning each month which can help you save money as well. Just a quick once over with your vacuum each month can help you save.

Are you a renter?

It can be hard to cut cost on a unit that you can’t fix some of the issues that cause your bills to be higher, like the front door needing to be weatherized so the air does not escape. Here are a few ways you can save without calling up your landlord:

  1. Change air filters on air conditioner/furnace
  2. Thermostat settings-can cut costs 3% each degree over 75
  3. Cold Water-wash your clothes in cold which can save you about 50 cents/per load of laundry you do

Get out and enjoy your Summer to the fullest with your friends and family! Whether you are hoping to save up for a new vacation, a new home or just to put money back into savings, we hope these tips will help you get there this season!

 

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.

 

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

 

Constant Calls From Debt Collectors│Illegal Practices vs Scam Callers

How To Deal With Debt Collectors

I have recently been receiving strange calls from someone trying to collect money from me, what do I do? As a consumer, it is important to be educated about the process by which an actual collection agency attempts to collect debts as opposed to scam callers asking you to meet them at the nearest CVS with no real explanation and for a large sum of money. It is not uncommon that if you are receiving phone calls, it will continue to happen until you can do something to make them quit.

 

Your Rights Under the FDCPA

The FDCPA (Fair Debt Collection Practices Act) has been put into place for the consumers protection. Though they don’t always follow the rules, harassment is illegal and will not be tolerated. There are many avenues as far a legal actions you can engage in should a debt collector call and harass you. While it is legal for a debt collector to call you and attempt to collect a debt, it is not legal for them to harass or threaten a consumer such as many scam callers and a few debt collectors do. There is a major difference and it is hard to track scam calls down. Many legitimate debt collectors take correct steps when making their phones calls however, should you continue to receive calls this is what you should look for:

They must

  • Identify themselves in every form of communication
  • Address what the call is in regards to “This is an attempt to collect a debt”
  • Verify the name and address of the original collector
  • Advise that you have the right to dispute the debt

If you receive a phone call and the company calling you does not do provide the information above, do not pay them or agree to met them to provide any money. You will want to contact an attorney to see if there are any steps that can be taken.

Taking Legal Action

The FDCPA has set rules in place for the way communication is to be handled by the debt collectors. Should a debt collector or agency not abide by those regulations, you may be able to take legal action moving forward.

  • Collector cannot call outside of the hours of 8am and 9pm on your local timezone
  • Auto dialing or numerous calls in the effort to annoy, abuse or harass the consumer is not prohibited
  • Profane or abusive language is not allowed
  • Calls to family, friends, or place of employment is not allowed
  • A Collector cannot call and threaten to report falsely to credit reporting agencies
  • Once a consumer discloses they are working and represented by an attorney, communication must stop

A few examples of harassing phone calls are on our website, you can access them here.

free credit repair consultation

Suing the Debt Collector

If you feel you have been dealing with harassing collectors, please contact Credit Law Center so we can help you build your case. We have sued all three of the credit bureaus and are constantly helping consumers become more educated about their credit as well as their rights under the FCRA (Fair Credit Reporting Act). This can be a fairly lengthy process, but in the grand scheme of things, having those calls come to an end are worth moving forward and pursuing legal action.

Continued Harassment and Next Steps

The best thing you can do to help yourself in a scenario like this is document and never throw anything away that may help an attorney out. We advise our clients to document everything such as the time and date you spoke, who you spoke with and what company they work for and any of the phone call details that you may be able to remember. Some other things that will help in this process are:

  1. Collection Letters you received
  2. Any voicemails left, save them to a storage device
  3. Telephone Bills
  4. Notes and contact info taken during call
  5. Take screenshots of your caller ID info

 

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