by Adam | Nov 22, 2016 | Credit Repair
Your credit score is important, and knowing your credit score can be a good indicator of whether or not you’re making responsible financial decisions or maybe headed down the wrong path. But there are a lot of factors that make up your credit score, and lenders are interested in specifics when it comes to approving a loan. But if you try to look up what specific numbers lenders are looking for, your search will likely yield a bunch of vague hypotheticals. So let’s take a look at some actual numbers and ranges that have proven to be good indicators of a financially responsible individual, based on FICO’s report of High Credit Scorers, and Capital One’s credit monitoring tool CreditWise, which uses TransUnion credit report data. Payment history Your ability to make payments on time is crucial, and accounts for 35 percent of your credit score. But will a late payment here or there hurt? Here is the breakdown of how your percentage of payments made on time look to lenders: 0-1% is below average, meaning you are almost always late. Approximately 12 percent of individuals fall in this category. 2-59% is average, and 17 percent of individuals fall in this category. 6-89% is good, and 9 percent of individuals fall in this category. 90-100% is excellent, and 61 percent of individuals fall in this category. Credit utilization Lenders want to know you live within your means and don’t rely on borrowed money to live, which is why credit utilization accounts for 30 percent of your credit score. This is calculated by comparing how much total credit is available to...
by Adam | Nov 10, 2016 | Credit Repair
Practicing sound financial principles may come easy for you, but you probably know someone who can’t quite seem to get the hang of managing their money. It can be frustrating and even heartbreaking to watch them make mistakes that can potentially be serious and life-changing, but you don’t have to just sit and watch. Chances are, they are just not informed about the tools and options available to them to help them manage their money, repay their debt, and repair their credit. Here are some ways you can help your family members in financial despair: Offer to review annual credit report It’s not something you learn in high school, and not something many parents teach their children. Don’t assume they know either – the next time you notice a family member struggling financially, maybe after being turned down for a loan or asking to borrow money, ask them if you could show them a few things to help them fix their credit. One of the first things you can show them is how to access their credit report. Show them the websites for the three credit bureaus and teach them how to access their free annual credit report. Suggest that you review their credit reports together. Show them how to read it Once you have a copy of their credit report, teach them what each area means, and its significance. Because the free credit reports don’t come with a credit score, you should also teach them how credit scores are calculated, and which areas of their credit report are most important in calculating the score. Identify problem areas, showing them how...
by Adam | Oct 24, 2016 | Credit Repair
Getting that dreaded phone call that there has been suspicious activity on your bank account, or checking your finances online and noticing charges that weren’t yours is a terrible feeling. And while that pit in your stomach may linger for a while, grit your teeth and buckle down, because it’s time to fight the perpetrators and hopefully regain your losses. Here you’ll learn how the breach likely happened so you can protect yourself in the future, what steps you should take immediately after noticing the stolen funds or information, and security measures to take to prevent this from happening again. How it Happened Here are a few of the most common scams that aim to steal your credit card and personal information. If you recognize any of this activity in your life, it is likely that is the source of the breach. Restaurant scam: A thief gets hired as a waiter or waitress in order to skim credit cards on a small, personal skimmer when the card leaves the presence of its’ owner. The information is stored on this device and then used or sold on the black market. Gas station, ATM, or parking meter skimmer: During less-busy times of the day, thieves will place skimming devices over the card readers at gas pumps, ATMs, or parking meters. These usually work via Bluetooth to send the information to the perpetrator, who is set up nearby with a computer to receive all of the information. Infected websites: Hackers will install malware on low-security websites that will steal any information you enter there, so you can imagine that shopping sites are...
by Adam | Oct 18, 2016 | Credit Repair
Life is unpredictable, and tough times seem to fall on everybody at one point or another. Whether you’re facing the loss of a job, the death of a family member, a car accident, medical issues, or any other life disruption, losing the ability to pay your bills can often add insult to injury during this time. Seeing your car get towed away may seem like rock bottom, but there are steps you can take to come back after a repossession and build your credit again. What is the credit impact of a repossession? Well, it’s likely that your lender has been trying to contact you for a while, to no avail. And the first lesson you must learn is that avoiding the problem is never the answer. When you first realize you can’t make a payment, call your lender first thing and see what they can do. But alas, life got in the way and here you are without a car. Your car is now going to be sold at an auction, but this doesn’t mean that you’re off the hook financially. It is likely to be sold for less than it’s worth, and if it is sold for less than you owe, you are still responsible for paying the difference. In the meantime, the repossession will be reported and added to your credit report, where it will remain for seven years. In addition to that ugly term hanging around, your credit score will also take a significant hit, anywhere from 60-240 points according to Bankrate.com. It depends on where your credit score was before the repossession. If you...
by Adam | Oct 5, 2016 | Credit Repair
A goodwill letter is a letter that you send asking a credit reporting agency to remove an account of a late payment on your credit report. Credit reporting agencies are required to provide accurate reports, but they do not have to report everything. A goodwill letter asks the reporting agency to remove the damaging account from your report, not to change it or to be dishonest. In the letter, you should explain the reasons why you made the late payment, and the surrounding circumstances. Essentially, you’re appealing to the credit card company’s better nature–a strategy which can be surprisingly successful. If you’ve made some poor financial decisions that have caused a dip, whether large or small, in your credit score, all hope is not lost. One option available to you that can help you improve your score is to write a goodwill letter to your creditor. What is a Goodwill Letter? A goodwill letter is a letter to a creditor asking for empathy based on your situation. By taking responsibility for your mistake and ensuring a clean record going forward, you may ask a credit reporting agency to remove an account of a late payment on your credit report. It’s important to acknowledge that a goodwill letter asks the reporting agency to remove the damaging account from your report, not to change it or to be dishonest.Credit reporting agencies are required to provide accurate reports, but they do not have to report everything. It is at the discrepancy of the individual agency what they will report. When Should You Send A Goodwill Letter? People who’ve dealt with especially trying...
by Adam | Sep 29, 2016 | Credit Repair
It’s more than likely that you’ve heard the advice to keep a balance on your credit card. Well-meaning parents, friends, even bankers and advisors may tell you that keeping a balance on your card proves financial responsibility and usage. But the truth is that keeping a balance is not necessary to build your credit. This is a huge myth that costs a lot of people a lot of money in interest, and also a lot of points on their credit. What is a “balance?” To make sure we’re clear, let’s explain what we mean by “keeping a balance.” A balance on a credit card is simply the amount you still owe. If you make the minimum payment, the balance is what is still owed after the payment is made. This is also the amount on which you’ll pay interest if a balance rolls over into the next billing period. Most people believe that keeping a balance shows that you’re using the card and keeping your utilization ratio low, proving good financial habits. And while this is true, it also doesn’t hurt your score to pay it off in full, after you’ve received the billing statement. Timing matters Paying the balance in full is less important than the balance at the time of a credit report pull. It’s about the debt utilization ratio, so while paying in full is a smart financial practice, if you’re maxing out your card each month but paying it off in full, you’re still damaging your score. However leaving it completely unused is also harmful to your credit, as it does nothing to prove your...
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