Credit and Mortgages

Life events can effect our credit drastically.

We run into people everyday who had great credit at one time but now they find themselves in a situation where they cannot qualify for a home loan.

It does not take very long and a great credit score can go down quite quickly. Sometimes it is a job lay off (there are almost 7 million Americans drawing unemployment checks right now), an accident or an illness. These things many times come upon us without warning.

Many times people find themselves unprepared for these emegencies. The bills keep coming due every month and the income has been drastically reduced. Before long they start to fall behind and new lates begin to show up on their credit reports. We have seen one new late drop a credit score 100 ponts while the average is probably more like 30 to 40 points. The rest of the bad news is that it will effect their credit scores for at least two years.

Whether unexpected life events have lowered your scores or just bad past credit decision there is a way back to healthy scores again. There are certain prinicipals, if followed, that will cause your scores to climb fairly rapidly. You can rebuild your credit file so that it will be healthy, assuring you of a much better interest rate.

If you would like to know how you can improve your current credit situation contact us at Credit Restoration Advice.

Tips to improve your credit

1. Review your current credit report for accuracy. Everyone is entitled to one free credit report per year from each of the three credit bureaus-Experian, Equifax, and TransUnion. Get a copy of your credit report and look at it for accuracy. First, make sure that the information in your file is about you and only you, not someone who has a similar name or a similar Social Security number. It is very common for your credit reports to have mistakes or incorrect information. At a minimum, make sure that the information you are being evaluated on is current and correct.

2. Repair credit report mistakes. If you find something on your credit report that is incorrect or missing, you should dispute the mistake by contacting the credit bureaus directly. All credit bureaus have their dispute procedures on their website. They are also required by law to investigate any disputed items and these investigations will usually be done within 30 days of your request.

3. Pay your bills on time. Sounds like a no-brainer, right? Payment history accounts for roughly 35% of your credit score. Paying bills on time is the most important thing to do. If you’re struggling to catch up, contact your creditors to work out a payment schedule.

4. Increase the length of your credit history. This accounts for about 15% of your score. Don’t cancel your old card or get a lot of new ones in a short time span because this can hurt your score.

5. Keep credit card balances low. It’s a good idea to keep the balances below 25% of your available credit. Even if you pay off your credit cards every month, a high average balance will impact your score. This accounts for about 30% of your credit score.

6. Keep new credit requests to a minimum. This accounts for 10% of your score. Every time a lender runs your credit, an inquiry is recorded. If you are trying to get a loan, don’t apply for new credit cards first.

7. Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.

8. Pay off debt rather than moving it around. The most effective way to improve your credit score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.

9. Beware credit-repair scams. By all means, don’t pay someone to wipe away the negative items in your file. If they don’t follow through, the damaging items will reappear in two or three months.

10 Things To Look For When Getting Credit Advice

 

We are often asked what do I look for to be sure I get the best credit advice. We think there are at least 10 things to look for.

1. Be sure the company has a good reputation. Many companies over promise and under deliver. It is important that the company has a good track record. See what former clients have to say about the service the received.

2. Be sure the company did not just start doing business last month. Again a proven track record goes a long way toward being sure the company will perform well and will be around for some time in the future.

3. Ask how long it will take to help you achieve your goals. Some companies want to keep you in their program as long as they can to make more money off of you. Pick a company that will help you achieve your goals in the shortest amount of time possible.

4. Ask the company exactly how they are going to help you obtain a healthy credit report. Find a company that will do more than just put a temporary band aid on your credit. Find a company that will teach you how to obtain a healthy credit report and how to keep it healthy for the rest of your life.

5. Find a company that will keep you informed about the process all along the way. Communication and the ability to ask the company questions will go a long way toward helping you obtain your goals faster and with better results.

6. Find a company that will charge reasonable fees and is not out to gouge you.

7. Using a company that has been in business for years will help you negotiate and pay off accounts at great savings, sometimes thousands of dollars in savings. These companies will have contacts all over the United States that will work with you.

8. Find a company that will counsel you on making wise credit decisions. To maintain a healthy credit file you need proven and trusted professionals that know what they are doing so they can advise you properly.

9. Find a company that will keep you updated about current credit issues that will affect your financial future. Part of our credit education is staying on top of new laws and news that can benefit your total credit picture.

10. Find a company that reveals everything upfront with no hidden fees or rules that you will find out about later. Look carefully at the materials and web site to see if they disclose things clearly to you up front. Also be sure they do not pressure you to sign up today. If they are a reputable company there services will be available to you tomorrow, next week, next month and even next year. Be sure you feel comfortable and have confidence in the decision you finally make.

If you would like to know more please contact our Credit Restoration Team today.

What is a healthy credit card balance?

Your credit card balances will effect your credit scores quite significantly. The best balance is between $10 and zero.

When we let our credit card balances get over 50% it hurts our credit scores even though we are paying them on time. If you can get your scores below 50% you will get a credit score increase. If we get our balance below 30% we get another credit score increase. When we can pay the down to $10 to zero we get our maximum credit score increase.

It is important that you have the right number of revolving credit accounts as compared to the rest of your indebtedness. Many times people think that closing and paying offf credit cards will help their scores but usually this will cause a decline rather than an increase in scores.

Our Credit Restoration Team helps clients fine tune their credit so their scores will increase and be maximized. If you would like to find out more please give our staff a call at 704-849-2125

Credit Facts

A very important part of your credit education is staying on top of credit facts in the news. This week we will take a look at things that are happening right now that affect your total financial future.

According to Nurido News, There are a lot of myths about the credit score. Many people tend to think that some credit activities can lower their credit score. Here are a few facts about your credit score.

Checking your credit report does not deteriorate your credit score: Checking your own credit report goes down in the credit report as a soft inquiry and hence does not affect your credit score. However if a lender or a credit card company checks your credit report, it goes down as a hard inquiry and may cost you five points. But another important fact to be kept in mind is that all the inquiries in a 14-day period are considered as a single inquiry. The credit score rating system also does not take into consideration all the inquiries made within a period of 30 days before the day the credit score is to be computed.

Closing old accounts does not improve your credit score: Many lenders might tell you to close old accounts that are not in use. But doing this simply robs you of a long credit history and more percentage of your total credit limit is used up if you close your account.

Your FICO score is all you need: All the three major credit bureaus give you a FICO credit score rating formula. So your FICO score says all about your credit score and you don’t need to bother to look for something else to calculate your credit score. Using the FICO Credit Score Rating System, the credit bureaus give you a credit score. However the names for these credit scores are different at these bureaus. At Equifax, they call it Beacon credit score. At TransUnion, they call it Empirica. At Experian, it is called Experian/Fair, Isaac Risk Model.

The reason that you get different credit scores from all the bureaus is that reports of some credit activities performed by you is sent to one bureau and some to other. But more or less your credit score is the same.

Credit counseling does not hurt your score: The FICO credit score rating system does not take into consideration any reference to credit counseling in your report. In fact if you are facing troubles managing your finances then you can try credit counseling. It does not go down as a negative in a credit report.

The perfect way to improve your credit score is of course the simplest of them all – pay your bills on time. Rid yourself of credit score myths and start your credit improvement stint as soon as possible.

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