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Opting Out: Scams, Junkmail and Marketing Offers

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

Pre Approval Credit Offers 

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

  

Direct Marketing Offers/ Junk Mail 

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

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

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

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

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

  

Telemarketers 

Know Your Legal Rights Against Telemarketers | Puff & Cockerill

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

  

A Note From The Author: The opinions you read here come from our editorial team. Our content is accurate to the best of our knowledge when we initially post it. 

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

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

 

 

 

 

 

 

 

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

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

Don’t Panic!

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

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1- You Do Not Have Enough Active Tradelines

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

2- You Have High Amounts Of Debt

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

3- You Have Nothing Left Reporting On Your Account

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

4- You Applied For New Credit Cards or Loans

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

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

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

Author- Joe Peters

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

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

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5 Common Mistakes Consumers Make With Their Credit

How Could You Be Hurting Your Credit?

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

1. Close A Credit Card

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

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

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

3. Pay Off A Loan Early

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

4. Reject Higher Credit Limits

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

Paying off a debt partially does not put you in better standing with the debt collectors or the credit bureaus. You will still be reported as paying late and are at risk for a delinquency on your credit report. So, if you are struggling to pay your minimums every payment cycle, talk to a credit counselor before trying to appease the creditor by only paying partially.
Other Factors Causing A Drop
  1. Late payments
  2. High Balances
  3. Too many Inquiries
  4. Late reporting (possibly your credit cards reporting at different times to the credit bureaus. An easy fix to this is call your credit card and ask them when they report to the bureaus so you know when to make payments so your score reflects better)
  5. Paying an old collection (there is less than a 2% difference whether a collection is paid or unpaid, most weight is given to how recent the activity)
Do you have questions about your credit report? If you would like to speak with one of our attorneys or credit advisors  and complete a free consultation please give us a call at 1-800-994-3070 we would be happy to help. If you are hoping to dispute and work on your credit report on your own, here is a link that provides you with a few ideas on how to go about DIY Credit Repair.

Student Loans and Credit Scores

Student loans seem to be on almost everyone’s credit reports . They can positively impact your credit scores if you are consistent with your payments and aware of what is happening with your loan. As with any bill or loan you take out, it is extremely important to your credit score as well because it can also have a negative impact too. We will discuss some of the positive ways that your loan can impact your credit, as well as a few ways it can do severe damage if you are not careful.

The Positives

1. Payment History

A student loan, when paid correctly, can be a great trade-line for your credit report. If you make the minimum payments, this shows great repayment on your part that you can reliable and make on time payments. This part of the credit report makes 35% of the FICO grading scale. The difference with a student loan as opposed to your other monthly bills such as your car insurance is that they do not report monthly (only when you miss the payment or fall into collection) whereas your loan will report positively when you have positive payments. This is great for your credit!

For some consumers, building credit is hard to do if you do not have an auto loan or any credit cards, but your student loan can help start to establish that payment history.

2. Building A Credit Mix

For a while, there was a myth out that having “diverse” accounts helped your scores and provided for a healthy mix of credit. Only about 20% of your FICO score is made up of new credit and types of credit used. Typically, having two revolving accounts and two loans (home, auto,or personal) are sufficient enough in trying to build on your scores. Your student loan will also help you start to fill out a portion of that percentage of your credit mix while you continue to make positive payments.

 

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The Negatives

 

1. Late Payments on Loans

A good way to completely tank your credit scores quick, fast and in a hurry is to get a late payment. As much as on time payments can help your credit score, they can also harm them, sometimes up to 100 points.

These bad or derogatory remarks can stay on your credit report for up to seven years. If continue to miss your payments and they continue to roll over, your scores will just keep dropping and dropping. The other piece to this puzzle that is not good, is how long it can take for you to rebuild once you have fallen behind. Be aware of what is happening with your bills and other finances and communicate with your institution if you start to fall behind.

2. Defaulting 

If your accounts are sent to collections, this can also really impact your credit scores. Often times, creditors will not lend you any money unless you “correct” it and make it right with the lender of the money. If you go and apply for a home loan and they see collection status, it can be extremely hard for them to justify lending to you with a lot of derogatory marks on the report.

You may hope to open credit cards and start to establish credit but the creditor denies you due to the defaults on your credit report. All in all, if you are seeing collections/charge offs or have been denied financing, you may want to reach out to a credit repair company today.

What Resources Are There?

Having student loans and pursuing a degree is important in this day and age. We see so many student loans every day on credit reports that are doing great things for people and their credit report. Make sure you stay up to date on the payments and work as well on establishing credit.

For more information on student loans and second chance checking, please visit this site. You will find a lot of programs to help you out in regards to student loans if you have not been able to find any resources yet that work.

Saving At Closing Time

Are You Trying To Rent With Poor Credit?

Less Than Perfect Credit Scores and Living Situations.

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

Are you currently living a rental nightmare?

We understand that this is not the ideal living situation.

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

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

 

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

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

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

 

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

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

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

A Guide To Your Credit Mix

Your Fix of the Mix

We all know the importance of having a good credit score.With a high credit score, you can open to door to better interest rates, loans, benefits and more! Good credit can be the deciding factor in whether or not you get approved to rent a home or get a particular  job. Therefore, it’s  is important to  fully understand the various factors that make up your credit, including the credit mix.

To clarify, credit mix is not the most important factor in determining your score. Your payment history carries the majority of the weight, followed by your credit utilization rate and then your credit history and longevity. The good news is, your credit mix comprises  only  10% of your credit score! In the end, your credit mix determines your credit health and can be a beneficial indicator of your credit prowess!

What are the two types of credit accounts?

What exactly is credit mix you might ask? Credit mix refers the different types of accounts associated with your credit report and usually fall into two categories:

  1. Installment loans, in which you borrow a specific amount and have payments due each month for a specific amount of time.
  2. Revolving credit, in which you borrow as much you need and pay it back in either a minimum or full payment until the amount owed is fully paid.

Examples of installment loans are home loans, auto loans, and personal loans. Revolving credit refers  to credit cards; although home equity lines of credit are another example.

 

Understanding Credit Mix - Dollars And Points

What is a healthy credit mix?

If you are looking for a healthy credit mix you will want an even mix of both installment loans and revolving credit .Having a mortgage or auto loan along with a couple of credit cards should set you up with an even credit mix and will reflect positively on your report. On the other hand, if you have only credit cards listed on your report, it can reflect poorly and harm your credit report in the long term.

Now, what happens if you have a few credit cards, but have your vehicle paid off and are all set on your home? Should you take out a personal loan so that you have an installment loan in the mix?

Not necessarily. It is not usually a good idea to borrow money when you don’t need to.Remember, your credit mix makes up only 10% of your credit score.If you are doing well in areas of your credit that hold more weight, such as  credit utilization and payment history then you are more likely to maintain good credit even if your credit mix isn’t as developed as you would like. There is not reason for additional expenses to try and diversify your credit mix!

 

Should I worry about my credit mix?

Every aspect of your credit is important, but don’t fret too much over your credit mix! Not everyone  has that classic mortgage-car loan-credit card mix of accounts. If your score is already high, your credit mix is one of the last things you should worry about! Instead you should focus on keeping your payment history in line and avoiding applying for too many new credit accounts at once.

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Author- Joe Peters

Credit Terms

What Is A Mortgage Score

Buying your first home is a daunting milestone in everyones life and can bring both joy and anxiety when beginning the process. One large source of anxiety comes from the ever looming need of an acceptional credit score to aquire acceptable rates. For those that meet this criteria as displayed by your credit monitoring service; you may be surprised to know that everything may not be as it seems!

When Jennifer Bingham began house hunting back in 2019, she felt confident that her 740 credit score would secure her dream home when she came across it with an admirable interest rate. As jennifer began the preapprovla process, she was shaken when her bank disclosed that her mortgage credit score was only 700! This score still situated Jennifer in a good credit range, but was unable to get her the rates that she had origionally imagined.

This exact situation happens to many first time home buyers when they find out that they have a mortgage credit score -often showing to be much lower than their  primary score. Consumers have many different credit scores that they are unaware of with the mortgae credit score being only one of them! The difficulty lies with the the fact that it is difficult to view their mortgage credit score unlike their FICO 9 with help of credit information applications. It is not impossible however to track and build your mortgage credit score, but it is important to first understand why there is a gap between your regular credit score and your mortgage credit score.

 

Why is it Different?

A mortgage score, unlike most other credit scores, is based on a formula that hasn’t changed in over 20 years! This is because Fannie Mae and Freddie Mac state these loans must be underwritten to be underwritten based on the FICO formula. Though there have been efforts to make changes to the mortgae credit score, the process has yet to see reults.

The issue with the old formulacomes down the the way it reports. Unlike the more consumer friendly formulas of other credit scores, the old formula may report lower scores for its consumers. Medical debt is one example of an item that is no longer conted toward newer fico scores, but is still taken into account when it comes to the mortgage formula. The same goes for collection debts that have been paid. These paid debs are not counted in the newer formulas, but hold weight when it falls to the classic FICO formula.

Mortgage credit scores are also more difficult to improve than their FICO 9 counterpart. While other FICO formulas have tools like Experian Boost to help to being building credit or suppliment thin credit profiles, mortgage credit does not take these tools into concideration when reporting. With theses reporting diffences between reports, it is not unlikely that there will be a discrepancy of 20 or so points between the two scores.

Another major difference that can be found within your mortgage credit score is the “shoppinh period allowed. Newer formulas allow for a 45 day window where multiple credit requests made by lenders will only count as one inquiry.  With your mortgage socore, that window is only 14 days, meaning more inquiries that will impact your score.

Recently, the Federal Housing Finance Administration (FHFA) has announced that it would concider alternative credit score formulas when it came to mortgages. Sadly, until the concideration leads to action, the old formula will remain in use.

 

How To Improve Your Mortgage Score

The first step to improving your mortgage score is to know what is listed on it by getting a copy. Sites like myFICO.com, though you will have to pay a monthly fee of about $20, will give you access to up to 28 different FICO scores! Another way to find your mortgage score would be to go to a lender and have them pull an informational credit check for pre approval from one of the bureaus!

The second step is to reguarly review your credit report and identify errors when they arrise. More than 70% of Americans have wrongful information on their credit reports that can be challenged for removal! You are legally entitled to one free copy of your report each year, but due to the pandemic, you can request weekly reports from all three bureaus until April 20, 2022!

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.

 

Are You Wasting Money

Is Your Credit Score Costing You Thousands?

How Your Score Is Costing You Thousands

Back when I graduated high school (a few years after dinosaurs walked the earth) I had absolutely no idea how detrimental my credit score would be to my  future purchases. My brother was sitting pretty with a 750 credit score and financed his new car at an extremely low interest rate!  On the other hand, I was sinking with a 580 credit score and financed an older Honda Civic for almost double the interest rate! No big deal, I saw this coming but what about insurance. My brother is only 3 years older than me, had 2 accidents on record and we had the exact same insurance agency providing our car insurance. Even with a good driver discount, an older vehicle, no accidents and basic liability coverage;  I was paying 40 dollars more a more a month than my brother for my insurance!  Why is it that I had to pay so much more than George and how can I get  the same payments as he does? The answer all comes down to our credit score difference!

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.

 

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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 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.

 

5 Common Mistakes Consumers Make With Their Credit

How Could You Be Hurting Your Credit?

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

1. Close A Credit Card

Just because you don’t really use your card does not mean you should close it. A lot of the time consumers will close a credit card because it is not getting used, but that actually will raise your credit utilization ratio, and thus hurt your credit score. So, keeping the card open, even if you rarely use it, can be beneficial. Make sure you use it at least every once and a while though in order to protect yourself from the card issuer closing the account for you due to inactivity.

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

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

3. Pay Off A Loan Early

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

4. Reject Higher Credit Limits

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

Paying off a debt partially does not put you in better standing with the debt collectors or the credit bureaus. You will still be reported as paying late and are at risk for a delinquency on your credit report. So, if you are struggling to pay your minimums every payment cycle, talk to a credit counselor before trying to appease the creditor by only paying partially.
Other Factors Causing A Drop
  1. Late payments
  2. High Balances
  3. Too many Inquiries
  4. Late reporting (possibly your credit cards reporting at different times to the credit bureaus. An easy fix to this is call your credit card and ask them when they report to the bureaus so you know when to make payments so your score reflects better)
  5. Paying an old collection (there is less than a 2% difference whether a collection is paid or unpaid, most weight is given to how recent the activity)
Do you have questions about your credit report? If you would like to speak with one of our attorneys or credit advisors  and complete a free consultation please give us a call at 1-800-994-3070 we would be happy to help. If you are hoping to dispute and work on your credit report on your own, here is a link that provides you with a few ideas on how to go about DIY Credit Repair.

The In’s and Out’s of Medical Debt

What is Considered Medical Debt

With there being more than 45 different FICO scores in circulation there is bound to be some variances in how each score is reported. Each debt listed on a report holds different weight; from revolving debt to past due debt, each instance is judged differently across each scoring model when determining risk. With the emergence of the Covid 19 pandemic, many consumers have experienced a new type of debt over the past year, unpaid medical debt.

It is rare for a medical debt to appear on your report listed under your practitioners’ company or service provider. You will primarily see your medical debt appear on your report as a collection under a third parties’ agency.

Medical collections is one of the more daunting debts held by a consumer as they do not willingly place themselves in the situation unlike opening a tradeline with a credit card provider or loan officer. The dilemma sits with the morality behind paying off the debt. Medical service provides are entitled to payment for their services like any other provider. On the other hand, no one chooses to fall ill or succumb to injury. Regardless of the situation, there have been many changes made by the credit reporting and scoring communities to attempt to pad and reduce the impact of medical debt to the consumer.

Are you unsure what is on your report? You’re entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies but monitoring your credit on a regular basis is the best way to help protect your score! Sites like Credit Armor allow consumers to monitor all three bureau reports with monthly pulls, track how your credit score changes over each month, and provides helpful identity theft protection tools like fraud insurance!

 

NCAP

In March of 2015, the three credit reporting companies (Trans Union, Equifax and Experian) established a plan to provide more accurate and accessible information. The National Consumer Assistance Plan was set to help consumers better understand and correct errors found on their reports as to bolster their credit portfolio. This plan adjusted common practices in many beneficial ways:

1- Consumers who acquire their annual credit report and dispute information that causes the report to change will receive an additional free credit report after updates have been made.

2- The reporting time for medical debts has been changed to report after 180 days to allow insurance to be applied. Credit reporting agencies will also be removed from the reports that previously listed medical collections if they have been paid or are being paid by insurance. If the debt is reported by a debt collector, the account still needs to be noted as being a medical debt as stated by the Fair Credit Reporting Act in Section 623.

3- Traffic tickets, parking tickets or any other debt that didn’t not come from a contract or agreement will not appear on a consumer’s report.

4- Victims of identity theft will receive special attention or those that have another individual’s information listed on their report.

Do you have medical debt on your credit report? Do you have questions about your credit report or credit questions in general? f you would like to speak with one of our attorneys or credit advisors and complete a free consultation please give Credit Law Center a call at 1-800-994-3070 we would be happy to help.

 

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An Ever-Changing Reporting System

Every few years a new credit scoring model is developed in an attempt to make meaningful changes in how credit report entries are considered. Currently we are acknowledging almost 50 different FICO scores, each assessing different aspects of the consumers debt. VantageScore (another leader in the credit scoring community) has also faced many changes in their scoring model throughout the years when it comes to medial debts. In the past, VantageScore had ignored medical debts that were furnished by the original medical provider. Though the situation was found to be extremely rare, this meant that a medical facilities debt had no impact on any generation of the current VantageScore (1,2,3 and 4).

Now, with the later VantageScore 3.0 and 4.0, all paid collections are ignored and removed from the account. This had provided a more lenient scoring model that has been much more forgiving to consumers who face medical debt. Keep in mind that a medical debt that is paid by insurance is different from an account that is settled. A settled account is not applicable when it comes to removal and only paid collections made by insurance companies will be removed.

The most current and forgiving VantageScore (4.0) is the only scoring model that distinguishes medical collections from other accounts on your report. This means that medical collections are in a realm of their own leaving accounts such as credit cards and auto loans to be reported normally. This is meant to minimize the impact of a medical collection on consumers reports and better differentiate these accounts from all other types of collections.

Article by: Joe Peters