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Should You Hire Someone to Repair Your Credit?

May 30, 2013 By Leave a Comment
Should you hire someone to fix your credit?

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One question that people frequently ask when working to pay off debt and rebuild their credit is “Should I hire a credit repair company to get the job done faster?”

I have seen plenty of ads on TV and websites on the Internet that promise to repair your credit quickly. Is it possible to pay a few fees and repair your credit just like that? Unfortunately, if it were that easy, more people would have much higher credit scores.

The fact of the matter is, YOU can repair your credit yourself without hiring a company to do it for you. Don’t fall into the trap that someone else can do it faster, because that simply isn’t the case. There’s no quick way to repair your credit – it takes time and work, but if you put forth the effort, you’ll see results in the end.

So what can you do to rebuild your credit?

Get a copy of your credit report from www.annualcreditreport.com, the only official site for checking your credit report for free. Every year you can view one copy of your report from each of the credit reporting bureaus for free. Check it for inaccurate information, and report any false information to the bureaus. Unfortunately, only false information can be deleted, not negative notes.

Keep paying off your debt on time every month. It’s always the best idea to pay your credit card debt in full, but even if you can’t pay the whole amount, do not skip payments. A big part of your credit score is having a history of on-time payments.

Likewise, don’t use you credit cards to their limit. A higher debt-to-credit ratio (using a higher percentage of the credit that’s available to you) can lead to a lower credit score. Paying off your balance in full every month not only creates a history of on-time payments, it also increases the amount of available credit.

If you have a collection account on your credit report, paying the balance off won’t remove it from your report. If you pay what you owe, make sure they agree in writing to notify the credit report that the balance was paid in full. It’ll still be on your credit report, but at least it will show up as paid in full.

Avoid opening new accounts to increase your credit limit. When you apply for credit, the issuing company will check your credit report, and those inquiries can cause your score to drop a few points. Applying for multiple cards in a short period of time will hurt you much more than it will help. Try to focus on improving the accounts you already have open.

On that line, avoid closing accounts too. The length of your credit history plays a role in your score, so the longer your credit history the better. Closing your oldest accounts, even if you don’t use them anymore, will shorten the average length of time your accounts have been open. This can hurt your score as well, so leave those old accounts open even if you don’t use them.

Remember, you don’t need to pay expensive fees to a company to repair your credit quickly. There simply is no way to do it quickly. As with most things in life, if you put in the time and work hard, you’ll see results with a better credit score in the long run.

Filed Under: Credit, credit cards, Credit Reports and Scores, Featured, Financial Education

Why You Need a Free Credit Report For The New Year

December 29, 2011 By Leave a Comment

Here is a must-have New Year’s resolution – get a copy of your credit report and score! If you’ve ever tried to take out a loan, buy a car, or even apply for a job, you know that your credit score determines what opportunities are available to you.  Companies don’t just judge your financial health by your credit score, they also judge your reliability as a person: people with bad credit don’t make good impressions on their potential employers, landlords, or mortgage companies.

Having good credit will save you money in the long run.  Not only will you have access to the opportunities you want, you will be eligible lower interest rates.  A low interest rate on a home mortgage has the ability to save you thousands of dollars during the life of the loan.

What affects your credit score?

  • Payment history, including late payments or delinquency
  • Length of credit history; the longer you’ve had established credit, the better your score
  • Total debt.  The more debt you owe for credit cards, loans, or outstanding bills, the worse the impact on your score can be
  • Lines of credit.  If you have several loans or credit cards active at one time, that will negatively impact your score

If you don’t know your credit score, you should take the time to obtain a free credit report. You can easily obtain it by visiting AnnualCreditReport.com – the only government authorized distributor of free Credit reports. You can certainly obtain your credit report from other sources, but it may not be free. Sometimes they claim to offer “free” credit reports at other sites, but they catch you in the fine-print and often you will end up enrolled in a credit monitoring service or some other service that you didn’t realize you were signing up for! Also, it’s important to realize that your free yearly credit report will not contain your credit score. The credit score can easily be obtained for a small fee, but you will have to pay for it.

When looking at your report, it’s important to look for errors and mistakes.   There may be inaccurate information on the report from identity theft or mistaken reporting.  Or, your credit may have been damaged more by debt than you realized.  How can you ever start repairing your credit score if you don’t know what it is?  With the ease of checking your credit online, there’s no reason not to get a credit report right now; it’s the first step to securing your financial future.

Filed Under: Credit Reports and Scores, Featured Tagged With: , ,

Credit Score Rating – 10 Ways to Improve Yours

July 12, 2011 By Leave a Comment

 

credit score rating

If you have a low credit score rating, chances are you’ve looked for ways to improve it. You’ve probably seen lots of companies claiming to do “Credit Repair”.  In fact, I just did a quick Google search which turned up thousands of results – many of them from companies who promise to fix bad credit score rating (for a fee, of course)

 

While I certainly wouldn’t go so far as to claim that every individual or company out there that works in the industry is a scammer, there are certainly those who deserve that title. In fact, I firmly believe that improving a credit score rating is something that can be done by anyone without paying a dime.

If you don’t believe me, here are 10 ways to get you started improving your credit score rating – and all of them are free!

[Read more...]
Filed Under: Credit Reports and Scores, Featured Tagged With: , ,

Credit Report Errors? Learn How To Dispute Them.

July 8, 2011 By 1 Comment
disputing errors on your credit report

photo credit enviropolitico

Credit Report errors are not uncommon.  In fact, a report by CBS showed that 4 in 5 Credit Reports contained an error of some type. If those odds don’t make you rush out to check your report, I don’t know what will!

While you can’t stop credit report errors from being made, disputing and correcting errors on your credit report is easier than you might think. Here are some easy tips to get you started:

1. First you need to obtain copies of all three credit reports – one from each credit reporting agency (TransUnion, Experian and Equifax). AnnualCreditReport.com is the official distributor of free credit reports.

2. Carefully examine each report for errors. Some common mistakes to watch for are:

  • wrong balances
  • inaccurate collection accounts
  • missing accounts (the good ones that will help you!)
  • inaccurate personal information (such as account opened by someone with a similar name, similar social security number or misspellings of your name)

3. If you do find information that is wrong or a mistake, dispute it immediately with the credit reporting agency. You can sometimes handle the dispute process online, but you may be better off handling i it the old fashioned way – with a letter.It’s always a good idea to follow up directly with the creditor in question as well so there isn’t any miscommunication.

4. For help disputing a credit report error, check out this excellent resource on the Federal Trade Commission Website to guide you through the process.

5. Keep good records! If you are sending any information via US mail, be sure to obtain proof of receipt (such as sending it certified mail) for your own protection. The credit reporting agency and the creditor in dispute have 30 days under federal law to investigate the item being disputed, so it’s important to keep track of all documentation including letters sent, times and dates of any phone conversations and proof of mailing for anything you send regarding the dispute.

Errors on your credit report can have a serious impact on your credit score, so it’s important to keep a careful eye on those reports. Check your credit score at least once every year to make sure problems don’t crop up!

Filed Under: Credit Reports and Scores, Featured Tagged With: , , , , , , , , , , , , , , , , , , , , ,

Using Credit Wisely – Build Credit and not Debt

January 19, 2011 By Leave a Comment

You don’t need to be afraid of credit cards if you know the keys to using them wisely. You CAN build great credit without accumulating debt!

Many people are afraid of the responsibilities of credit so they avoid using their credit card whenever possible.  However, building good credit is an important part of being able to obtain a loan if you ever need to do so for the purchase of a home or new car.  Credit checks are also often performed when you become a tenant at a new location or apply for employment at a new job.  Therefore, simply not using a credit card will not provide you with the results you are looking for.  You need to know about using credit wisely so you can reap the rewards of responsible use of a credit card.

Consider a card as cash

When you use a credit card, you should never allow yourself to spend more than you would if you were handing over a bundle of cash.  The best method of using credit wisely is to treat it in this way.  That means if you want to make a $200 purchase, think it over for an adequate amount of time to determine if you can afford to pay it off in full the next month along with all your other expenditures.  That is the key to using credit wisely—pay off your total each month so you are never carrying a balance from month to month.

Limit your credit

A tactic that will help you adopt this method of spending and prevent overspending is to limit the amount of credit you have on your card.  You should never have a higher credit limit than you could comfortable pay off.  Consider all your credit cards in this calculation.  Some people believe that having the highest amount of credit available to spend on their cards is best, but it could become a temptation for you to spend more than you really should.

The bottom line is to stay on top of it all.  If you find yourself falling behind one month because of unexpected financial spending, make some sacrifices the next month to get yourself back on track quickly.  The last thing you want, and what millions of Americans are dealing with, is to carry a hefty balance from month to month that simply earns more and more interest and becomes increasingly difficult to pay off.  Using credit wisely is not difficult if you understand the simple methods for keeping yourself out of debt while building credit at the same time.

Filed Under: Credit, Credit Reports and Scores, Debt, Financial Tips and Tricks

Thinking About Closing Your Credit Cards To Improve Credit?

December 15, 2010 By Leave a Comment

Closing out your credit cards is not always the best strategy to find relief from your credit woes. Here are a few things to consider if you are thinking of closing out a card.

In an effort to bring yourself some credit relief you may be tempted to grab a pair of scissors, slice up your credit cards and toss them away. But before you do, you’ll want to make sure that you not only close out the correct cards, but you also close out those credit cards in the correct manner. You do not want to inadvertently lower your credit score.

Because closing credit cards does not erase that card’s history, nor does it ever raises your credit scores, it is important to close out the cards that will still keep your credit score in good standing.

Make sure the card has no balance

It is important to remember that if the credit cards you would like to close have a balance or have become delinquent, closing them will hurt your credit score. When you close a credit card that still has a balance on it, the available credit limit drops to $0. Because you have a balance and no credit limit, it will appear that you have maxed out this credit card. This can have a negative impact on your credit score.

Do not close out a credit card that has available credit or close out your only credit card. In an effort to build your credit score, keeping a credit card will add points to your credit score. In the future, if you really need a credit card, you could get turned down because it will appear to the creditor that you do not have any experience with credit cards.

Don’t close old cards

You also don’t want to close out your oldest credit card. This will shorten your credit history. You will appear less risky if you have a longer credit history. It may not affect your credit score immediately but once it falls off your credit report, you may see a drop in your score. It is best to close out newer credit cards, ones you never use or ones that do not have a balance.

How to properly close a card

The correct way to close a credit card is to first contact the customer service of the card you want to close. Let them know you’d like to close your account. Don’t be pressured into keeping it open. They may come up with clever incentives if you keep it open. Just remain persistent and record the date and time that you made this request. It is always prudent to follow this up with a letter. Include your name, address and the last four digits of the card you are closing. State that you have previously made the request by phone (giving the date and time) and you would like this record to show that the closing of this was done at your request.

Keep a copy of this letter for your file and mail it in by certified mail. You will now have the proof that the letter was not only mailed, but also received.

Being selective about the credit cards you close as well as any new ones you may open is sound advice that will help you to not only improve your credit score but also bring come credit relief to your financial situation.

Filed Under: Credit, Credit Counseling, Credit Reports and Scores, Financial Tips and Tricks

Thinking About Settlement?—Not So Fast

November 12, 2010 By Leave a Comment

When dealing with a large amount of debt it can be tempting to believe the promises you see everywhere to “settle your debt for pennies on the dollar.” Here is a breakdown of the pluses and minuses of doing a settlement program to pay off your debt

In the course of our counseling sessions, we often get lots of questions about doing a settlement program in order to pay off debts. There are lots of companies out there advertising that they can arrange with your creditors for you to pay back less than what you actually owe. These programs sound like great deals financially, and in some limited situations they can make sense for people. But you need to be sure you ask a lot of questions about how they work, because there can be quite a few side effects from doing a settlement.

Settlement will reflect on credit report

First of all, with a settlement you are not paying your accounts back as you originally agreed and that will be reflected on your credit report. Your credit report is going to take a hit from doing a settlement. And if you try to get credit after doing a settlement program, future creditors are going to be very skeptical about giving you that credit. After all, if you didn’t pay back your original debts in full, why should they think you are going to pay new debts back?

Next, the way the programs typically work is that you pay a monthly payment into a “holding” account until you have the full amount of the settlement to pay to your creditor. In the mean time, nothing is typically going to your creditors, your accounts are going delinquent and your credit is taking a hit because of the delinquency as well. Not to mention you are likely to hear from your creditors trying to collect what you owe.

Affects tax

Also, one little known consequence of settlement programs has to do with the tax ramifications. The IRS is going to consider the difference between what you originally owed your creditors and what you settle for as taxable income to you, so be ready for a tax hit if you do one of these programs.

Settlement may be the best option

Again, in some limited situations, doing a settlement program can make sense. If you simply can’t afford to pay your creditors what you owe them but do want to pay them something, are not concerned about your credit rating, and aren’t concerned about the extra tax hit you may take, a settlement could be a way out for you without having to do a full blown bankruptcy. If you decide to look into settlement companies, do as much research on the companies you are dealing with as possible. Make sure they are reputable by at least seeing if they are listed with the better business bureau. And ask lots of questions. Legitimate companies should be laying out all the potential negatives for you along with the money they are claiming to save you.

And, finally, never be afraid to call your creditors directly if you are getting behind on payments. They are often willing to deal or settle with you directly. In some cases, even if you pay back less than what you owe, you may be able to get your creditors to give you something in writing saying they consider you paid in full, which could be to your benefit. It’s always worth it to call and negotiate directly with your creditors.

It can be overwhelming and confusing to figure out how to handle debt as it piles up on you. That is what our financial counselors are here for. Call us today at 1-866-635-7121 for a free financial assessment and a breakdown of what all the options might be for your particular situation.

Filed Under: Credit Reports and Scores, Debt, Debt Management Program, Financial Education, Financial Tips and Tricks

Credit Score myths that you can put to rest.

October 29, 2010 By Leave a Comment

This blog post will highlight some of the most popular credit score myths and put them to rest. We’ve probably all heard some of these myths. Lets separate the facts from fiction!

You are your Score

Many people don’t know what their credit score is. They often don’t find out until they go to apply for some type of credit. If they find out the score is good then they feel good about themselves, as they should. And if their score is bad they think that it reflects that they are bad people. This is just not the case. Your credit score is a number that lenders use to determine your ability to pay for what you are applying for. By no means does it mean you are a bad person or would not be able to pay that debt.

Build your credit with a Balance

I have heard many people say that you have to use the credit card and carry a balance to build your score. This is simply not true, your creditors report your balances to the credit bureaus and whether or not you are paying on the balance. To build your credit pay on your balances on a timely basis and keep your payment history up because that accounts for 35% of your FICO score. Having high balances may actually hurt your credit.

Checking you score hurts

There are two types of inquiries, hard and soft. The hard inquiries are what hurt your credit and that is when you are actually applying for credit. But if you yourself pull your credit through a site like www.annualcreditreport.com then it is a soft pull and does not count against your credit.

Your demographics affect your score

Absolutely false, your age, gender, religion, etc. have nothing to do with your credit score. Check out www.myfico.com to get a full list of things not included in your FICO score.

To boost your score, dispute the negatives

This means that if you see a derogatory account on your credit report then to dispute it and if the company does not reply in 30 days then it can be removed from your credit report and boost your score. This only works if it is an account that does not actually belong to your or its an error. If you try and dispute an account that is valid then it may come off but it will just show back up in a couple of months so this tactic doesn’t work.

A marriage merges credit reports:

Simply put, when you get married you do not have a merged credit report. If you apply for accounts jointly then that account will show up on both credit reports but if you separate then you still have your individual credit reports.

I hope this will put all those credit score myths to rest for you. If anyone has any additional myths that they would like to share please comment for us.

 

Source: http://finance.yahoo.com/banking-budgeting/article/110471/six-popular-credit-score-myths?mod=series-m-article-c

Filed Under: Credit, Credit Counseling, Credit Reports and Scores, Debt

Debunking Credit Score Myths

October 20, 2010 By Leave a Comment

There are a lot of confusing “Facts” floating around out there about credit scores. Some of what you here may not be true. Here is a quick look at some of the more common credit score misunderstandings

I ran across a good article that covers some of the most common myths surrounding your credit and credit score. The line to the article is below if you want to read the whole thing. But I thought a lot of what it had to say was worth reminding everyone, so I thought I’d address some of it here.

Timely Payments Are Key

One of the biggest myths that I hear people ask about is that you have to carry a balance on your credit cards in order to build credit. The article correctly points out that this just isn’t true. Your payment history makes up 35% of your credit score, but this has nothing to do with your balance. Your creditors are going to report your balance at the end of your statement cycle, as well as whether you paid on time or not. The key to your credit score is timely payments, not whether you have a balance to prove you “use” your cards. In fact, carrying balances can in some cases hurt your score since using too much of your available credit can bring your score down.

Soft Inquiries Don’t Hurt Credit

Another common misunderstanding surrounding your score is that any time your credit is checked, your score will go down. There are two main types of credit checks. A hard inquiry, where a lender checks your credit in connection with an application for credit, can bring down your score. This can happen particularly if you apply for lots of different loans in a short period of time. But a soft inquiry, for instance if you simply check your credit yourself to see what is on your report, will not hurt your score.

Age, Race, Marital Status, etc.

You also need to know that your age, gender, race, etc have no bearing on your score. True, length of credit history will affect your score, so generally if you are younger you will have a shorter credit history, but age itself is not a factor.

Marrying someone does not automatically merge your credit. Naturally, if you open joint accounts, those accounts will show up on both spouses’ credit reports, but you will each still have your own separate reports and scores.

And, finally, while it is not necessarily a myth, one point the article makes I think is a very good one. Your credit score does not define you as a person or whether you actually will pay back a loan. So many people don’t know their score and when they find out, they are hurt by what they discover. But don’t let it define you. You can change your score going forward with the right behaviors, particularly by paying down your accounts and being smart about your use of credit.

 

http://finance.yahoo.com/banking-budgeting/article/110471/six-popular-credit-score-myths?mod=series-m-article-c

Filed Under: Credit, Credit Reports and Scores, Financial Tips and Tricks

Things to watch out for on your Credit Card Statements.

October 12, 2010 By Leave a Comment

This blog post will focus on some of the new tactics credit card issuers are using to increase profits. The information contained is based on a study conducted in March by Pew Health Group.

Thanks to a new study released by Pew Health Group’s Safe Credit Cards Project we have good news that much of the “deceptive” practices that were used by Credit Card companies have been eliminated. However, the study found that there are still some areas to watch out for:

The fee for cash advances has risen on most credit cards from an average of 3% to 4%.

And the penalty fees and interest rates are now averaging $39 for a late fee and 29.99% interest rates for consumers behind 60 days or more on payments.

So pay close attention to your credit card statements and be aware of all the costs involved with using the credit card so that you can stay on top of your finances. If you are behind or struggling with your credit card debt you may want to look into a Debt Management Program to gain control once again.

Filed Under: Credit, Credit Reports and Scores, Debt, Financial Tips and Tricks
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