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5 Steps for Fixing Credit and Improving Your Score

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In April 2018, the average FICO® Score in the U.S. was 704, which is a good score.1 Comparatively the average VantageScore 3.0 score in 2017 was 675.2 And even though average credit scores are in the good or almost good range, they vary by age, state and other factors. So, there are still plenty of us with lower than desired scores and plenty of room for fixing credit issues. While fixing credit doesn’t happen overnight, there are steps we can take right now to get the process started.

The steps to fixing your credit and credit scores include getting a sense of your finances, looking for any errors and pinpointing problem areas that you need to address such as overspending.  When you break it down, the five steps to fixing credit issues are:

  1. Know your credit score and get copies of your credit reports.
  2. Fix any errors on your credit reports.
  3. Maintain healthy credit accounts and start building a positive credit historyto help reach credit goals.
  4. Control your credit utilization and lower high utilization if needed.
  5. Keep an eye on the age of your credit.

It won’t be super easy. And it won’t be as fun as using your credit, but the relief you’ll feel when you can take out new credit when you need it will be well worth the time and effort you put into fixing credit issues.

1. Know Your Credit Score and Get Copies of Your Credit Reports

The first thing you want to do when fixing your credit is to find out your credit score and get copies of your credit reports.

You can get your VantageScore 3.0 score free on Credit.com and your FICO score for just a $1 once enrolled. You also get a free credit report card and an updated score every 14 days, so you can track your progress toward fixing your credit.

Your credit score is separate from your credit reports. And your reports don’t include your scores. But, thanks to the Fair Credit Reporting Act, you can get free copies of your credit reports from the three main credit bureaus—Experian, Equifax and TransUnion—once a year. You can access all of your free reports thru AnnualCreditReport.com. Or get your reports directly from Experian, Equifax and TransUnion.

You want your credit reports from each of the major credit reporting agencies, because each one can contain different information that impacts your scores. You rarely know ahead of time which agency’s report a lender will pull, so it’s important to make sure each report is accurate and that you’ve corrected any issues.

What You’ll See on Your Credit Reports

Your reports contain basic details about you—your name, birth date, address, etc. It’s important to review this information to make sure it’s accurate. It’s okay if your past addresses are listed.

Reports also show any financial legal issues you have, such as a bankruptcy, liens, judgments or wage garnishment. If one of these issues is bringing your credit scores down, take comfort in knowing these negative items eventually age off your reports.

Beyond that is creditor information, which makes up most of your reports. This includes different accounts you have—loans, credit cards, etc.—and their status (open/closed, in collection), balances, credit limits and payment details. It can also include dates of missed payments or late payments and when the accounts were sent to collections. It’s this information that’s used to determine your credit scores, which are broken down into five major areas:

  • Payment history, which is 35% of your FICO score, and includes your history of repaying account debts (VantageScore doesn’t reveal the percentages it uses.)
  • Credit utilization, which is 30% of your score, and shows how much debt you carry in relation to your credit limit
  • Length of credit history, or credit age which is 15% of your score, and shows how long you’ve had active credit accounts
  • Types of credit, which is 10% of your score, and shows the variety of your accounts
  • Credit inquiries, which is 10% of your score, and shows the number of inquiries made to your credit profile

Now that you understand what your reports cover and what goes into calculating your credit, the next step in fixing credit issues is correcting any errors you find on your credit reports.

2. Fix Any Errors on Your Credit Reports

Once you’re looked at your credit reports, you want to fix any errors you find. For most people, the process of fixing errors on credit reports is known as credit repair. Credit repair is something you can do on your own. Or you can turn to the help of a professional credit repair company for help with fixing your credit. Whichever option you choose, start as soon as possible.

If you do find errors, you won’t be alone. From October 2016 to September 2017, the Consumer Financial Protection Bureau (CFPB) fielded 85,000 complaints about credit report errors.3 Fortunately,  federal law lets you dispute credit report errors with the credit bureau that’s reporting the error.

For details on fixing errors on your reports see How to Dispute Credit Report Errors on Credit.com. Or visit the Experian, Equifax or Transunion websites.

When contacting the agencies, use these basic guidelines to help navigate the process.

  • Dispute a mistake with each credit bureau that reports the error. Just because the same mistake appears on all three credit reports doesn’t mean disputing it with one of the bureaus will fix the error at the other bureaus.
  • Dispute errors for different accounts separately. It’s not uncommon to find multiple errors for different credit accounts on a credit report. And you want to dispute each account reporting an error separately. However, if you see multiple mistakes on the same account, you can group all those mistakes into a single dispute.
  • Be thorough in your dispute. See How to Write a Credit Dispute Letter for insight.
  • Seek help if you want it. You can dispute credit report errors yourself, but for some people, the process is stressful. If you feel overwhelmed, you can hire a credit repair company or law firm to help. Note that a professional credit repair firm will charge a fee for its services. A good credit repair company will never promise a “300-point jump in your scores!” In fact, that’s illegal. Instead, the company should be upfront about what they can do and will take payment only after they’ve helped resolve your situation.

If you have errors, especially inaccurate negative information, on your credit reports, you can see changes to your credit scores fairly quickly. Credit reporting agencies have to respond to disputes within 30 days, although some can take 45 days. And if the credit reporting agency sides with you, it must remove the mistake immediately. In a 2012 Federal Trade Commission study on credit report accuracy, four out of five people who disputed an error on their credit reports had a modification made to their reports.

Not all credit issues though are about errors on your credit reports. So, the next step—whether you have to dispute errors or not—is to maintain healthy credit accounts.

3. Maintain Healthy Credit Accounts

Your payment history is the most important factor in your FICO credit score and accounts for 35% of most scores. VantageScore doesn’t provide percentages, but the percentages used are likely similar to FICO’s. And even just one late payment can drop your scores significantly. Having a good payment history is critical to maintaining healthy credit accounts.

Fixing inaccurate negative information on your account is fairly easy. But, if you have accurate negative information on your credit reports, it can take a long time for it to age off.

  • Late payments: 7 years from the late payment date
  • Foreclosures: 7 years
  • Collection accounts: 7 years and 180 days from the date of delinquency on the original debt
  • Short sales: 7 years
  • Bankruptcies: 10 years from the filing date; 7 years for Chapter 13 cases
  • Repossessions: 7 years
  • Judgments: 7 years for paid judgments, longer for unpaid judgments
  • Tax liens: 7 years once paid
  • Charge-offs: 7 years from the date the account was charged off

To avoid the wait for a better credit score, maintain healthy accounts by paying debt off on time whenever possible.

More Factors for Building and Maintaining Healthy Accounts

The mix of your credit accounts makes up 10% of most credit scores and is another critical part of showing you can maintain healthy credit accounts. Your mix of accounts shows creditors and the credit agencies that you’re able to handle different types of credit. The two main types are:

  • Installment accounts, such as mortgages, car loans and student loans
  • Revolving accounts, including credit cards and lines of credit

Creditors want to see you can handle both types of credit responsibly. If you’ve only had credit cards in the past, a car loan or a mortgage can improve your credit score. It’s however rarely a good idea to take out a loan just to build credit.

Another factor in proving you can maintain healthy credit accounts is your history of applying for credit. This accounts for 10% of most credit scores. If you apply for several credit accounts in a short period of time, it can hurt your credit.

When you apply for credit, it results in a hard credit inquiry on your credit report. And any hard inquiry into your credit slightly dings your scores. As hard inquires fade into the past, they have less impact. A year is generally when a hard inquiry begins to stop hurting your credit scores. Bottom line: Apply for new credit only when needed. Don’t be lulled by the offer of a discount to open a new charge card at virtually every store you shop at.

When you’re ready to shop for new credit, such as a mortgage or auto loan, a good practice is to rate shop during a 14- to 45-day window, depending on the scoring model. Most credit scoring models will group inquiries by type in that time frame and not see them as unique hard inquiries.

4. Examine Your Credit Utilization

Credit utilization is the amount of revolving debt you have relative to your credit limits. More specifically, it’s your available revolving credit, which is your available credit limit, compared to your total credit debt or the amount you’ve actually charged on your cards or credit lines. It’s also the second most critical factor in how your credit scores are calculated

Say you have a single credit card or home equity line of credit with a $5,000 credit limit—this is your revolving credit. If you have a balance on that card or credit line of $1,100, that is your total credit debt. In this case, your credit utilization is 22%.

To protect your score, it’s best to keep your credit utilization below 30% of your credit limits. A 10% credit utilization amount is ideal. An amount of 30% or less shows creditors that you can manage your available credit responsibly without maxing out your credit limits.

Hint: If you pay a credit card off on time regularly, your issuer will likely see you as a good credit risk and increase your credit limit. Don’t however start charging more. Simply charge the same basic amount. Doing so will keep your utilization lower! Say you started with a $2,000 limit and charged just $200 a month, you had a 10% utilization. If your limit is raised to $4,000 and you continue to charge just $200 a month, your utilization is now just 5%.

If you do go over the 30% mark, you can most likely undo any small decrease in your credit scores by paying off those balances and getting your overall utilization back to 30% or less as quickly as possible. It’s best, if possible though, to keep your utilization to the 30% cap at all times.

5. Keep an Eye on the Age of Your Credit

The age of your credit accounts is another factor in your credit standing. It accounts for roughly 15% of most credit scores. It’s also a part of your credit utilization, which makes some credit better than no credit.

The age of your credit is calculated by looking at the age of your oldest account and the average age of all your accounts. If credit age is hurting your scores, you can’t really do much about it. You do, however, want to avoid closing your oldest accounts if possible.

If you don’t have any credit history, consider opening a credit card that you don’t use or use very sparingly. The card will at least be reported on your credit history and build up a history of its own. One note: It may be best to have a card that you use a little bit and pay off in full each month. Why? This will prevent the issuer from closing the card due to inactivity. When you apply for a new card, you can also find out about the issuers policies on closing cards for inactivity.

Rebuilding Credit May Be the Only Way of Fixing Credit

If you’ve made some missteps and have poor credit, the best way of fixing credit is sometimes to start rebuilding it. If that’s your situation, here are some tips to consider as you fix your credit:

  • Stay mindful of the five steps for fixing credit, because they also help you maintain good credit as you rebuild your credit.
  • Pay down credit card balances if your utilization is too high and refrain from making new purchases. In fact, you may want to put your plastic on ice as long as you aren’t risking the issuer closing the account.
  • Refrain from closing old credit card accounts, since it can affect your credit utilization and make it harder to build a solid credit history.
  • Even if you’re denied one kind of credit, that doesn’t mean you’re shut out from borrowing entirely. If your payment history, credit utilization or a mix of accounts are hurting your scores, opening new credit may help you rebuild credit faster. There are credit cards designed to help, called secured credit cards.
  • If you’re worried about taking out a credit card or can’t qualify for one, consider a credit-builder loan.
  • Consider paying outstanding collection accounts. Some newer credit scoring models ignore paid collections entirely.

 

Fixing Credit with a Secured Credit Card

If you have a poor credit history or a lack of credit history, a secured credit card may help you repair your credit and raise your credit scores. These require a deposit that generally serves as your credit limit. If you don’t pay your bills, the card issuer can withdraw the deposit. If you open one of these cards, it’s important to make on-time payments and keep an eye on your credit utilization.

Depending on your situation, a secured credit card can help you start fixing your credit in as little as six months. However, it may take longer to see a marked improvement in some cases. If your credit history is limited and you have no credit, then a secured card may be your best route, because you have no negative information to start with.

The secured credit card is a way to build and establish credit to obtain higher credit scores. If you haven’t been able to get approved for a traditional credit card, you’re still likely to get approved for a secured credit card, because there’s less risk for the lender. The card issuer will report your ability to pay the credit card on time and how you manage and use the balance to the credit bureaus.

Additionally, the security deposit you use to obtain the card is used if you default on your payment. Using the security deposit means that, even if you default, the card is paid because it’s secured by your funds. As such, the account won’t in collections due to nonpayment. However, this isn’t the case if the balance on which you default is higher than the amount of your security deposit.

Why Fixing Your Credit Is Important

There are many reasons to start on the path to credit repair. The biggest reason is that credit affects you every day. It affects the interest rates you pay on credit cards and loans, including mortgages, and can result in higher security deposits for rentals. It can also affect what you pay for insurance rates and what credit limits you qualify for. Good credit can also mean financial freedom where you don’t have to depend on cosigners to help you make purchases and secure loans.

So, if you need to fix your credit—or want to maintain your existing credit—use the five steps outlined here. And, no matter what your credit is today, don’t give up! If you build good habits over time, fixing your credit will be automatic, ongoing and not even needed because you’ll maintain good scores all the time.

This article was originally published January 29, 2016, and has since been updated by a different author.

 

1 https://www.experian.com/blogs/ask-experian/what-is-the-average-credit-score-in-the-u-s/

2 https://www.experian.com/blogs/ask-experian/state-of-credit/

3 https://www.fool.com/credit-cards/2018/07/07/are-there-errors-on-your-credit-report.aspx

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Credit Repair Companies

How to Get Help with My Credit?

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A low credit score does not only make loans costly or inaccessible. It may affect your employment, and even prevent you from renting the best apartment. As an indicator of creditworthiness, it is checked by lenders, insurers, employers, and landlords. If the total is far from perfect, there are several ways to fix it. The best repair companies will do it on your behalf. 

Why Scores Go Down

In the US, the most popular scoring systems are FICO and VantageScore. They use a similar combination of factors to assess data on credit reports. Three major bureaus — TransUnion, Equifax, and Experian — document your payments and all events related to borrowing. For example, the three most important elements for FICO are:

From this, you can deduce the conditions for the best scores. You need to have an impeccable record without missed or late payments, and the total amount of debt should be as low as possible. The longer your history — the better. You may also raise the score by using more credit products (credit mix accounts for 10%) and opening new accounts (10%).

Do You Need Repair? 

This term refers to the correction of official records. Today, affordable credit repair services help you clean the reports fast. These measures are not always necessary. The accuracy of the records determines whether you need repair. You may need to rebuild your history, not fix it. For example, you will see the credit score go up after paying debt

Every year, you may request a copy of your reports. There is no need to contact the agencies individually. Until April 20, 2022, www.annualcreditreport.com allows you to get them for free once a week.

If the documents are accurate, there is nothing to fix. However, you may still raise the score by rebuilding your credit history. There are several ways to do this, such as:

  1. Increasing limits on credit cards or paying off the balances (this lowers the credit utilization ratio);
  2. Getting a new credit card (to bring down the same indicator);
  3. Taking out new loans and paying back diligently;
  4. Adding more data to your reports through Experian Boost, and more. 

How Repair Works

Mistakes on official reports are not uncommon. You may find errors in spelling or completely false entries, such as judgments, evictions, or bankruptcies. These derogatories will tarnish your records for a long time. Most negative entries affect the score for 7 years, and some bankruptcies influence it for a decade, depending on the chapter.

Every consumer has a right to dispute such errors on their own. This is a challenging and lengthy process. Not only should you navigate consumer credit laws. It is necessary to liaise with bureaus, lenders, and collectors. Communication involves formal letters of specific formats. If you lack the expertise, a credit repair company is your best bet.

Professional Services

Overview of Professional Services

These providers have teams of weathered experts. They will collect your data, identify the most damaging mistakes and have them removed. This process involves four key stages and takes several months on average. The company will:

  • collect your reports from all major bureaus;
  • scrutinize the documents to identify inaccuracies;
  • develop a strategy to fix the score as quickly as possible;
  • collect evidence to prove that the items are false;
  • send formal dispute letters to credit bureaus to have the mistakes deleted. 

Most providers offer different tiers of services. The cheapest packages include five disputes per billing cycle on average. The core services are analysis and disputes. In addition, you may access score monitoring tools, personal budgeting apps, identity theft protection, and other extras.

On average, repair takes between 2 and 6 months. This depends on the number of mistakes you want to eradicate. The more derogatories — the longer you (or your hired experts) need to collect the evidence and initiate the disputes.

How to Find a Reliable Provider

In the United States, credit repair is a big industry. Dozens of companies offer to raise your total quickly, but choosing the right one is tricky. Pay attention to the following:

  • reputation and BBB rating;
  • range of services;
  • pricing;
  • support;
  • money-back guarantee.

Your provider may or may not be accredited with the Better Business Bureau. Still, this platform offers crucial insights (e.g., the number of complaints in the past 3 years and any pending lawsuits). Feedback is also available on sites like www.consumeraffairs.com and TrustPilot. In addition, check expert reviews from reputable sources like Investopedia. 

In terms of pricing, learn about the ‘first work fee’, or ‘setup fee’. It is paid upfront. Subsequently, the company will charge you every month as long as you need its services. On average, you may pay between $79 and $129 per cycle.

Pay close attention to the refund policy. Some companies will not return your money even if they fail to delete a single item from the records. At the same time, there are unconditional policies. These allow you to get a refund for any reason within the first 90 days.

You need convenient access to progress tracking. Most providers allow you to check the status of your case on their web portal. The biggest companies have proprietary apps. You may reach their office by phone on any weekday, and support is also available during shorter weekend hours. 

Final Words

If you need help with repair, choose trusted providers in your area. Check their reputation, legal status, and feedback from customers. Beware of scammers. With professional assistance, you may see the first results in just over a month.  









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La Reyna Del Credito Helping People Defeat the Financial System by Improving Their Credit Scores

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La Reyna Del Credito Helping People Defeat the Financial System by Improving Their Credit Scores

Financial freedom is somewhat an alien word where Ivonne Arvizu comes from, and she made a solemn promise to make it happen for herself and as many others as possible. With a work rate that has cut across different clients with varying professions such as medicine, entertainment, business, legal, real estate, financial professionals, police officers, and thousands of other people who needed credit report at one time or the other, Ivonne Arvizu has created a strong impression about La Reyna Del Credito. Ivonne acquired her credit repair knowledge a long time before she established her credit repair company, and she started helping people fix their credit while she worked at a bank. The bank was against her offering such services due to a conflict of interest. Ivonne, not willing to let herself get tied down in some banking bureaucracy she didn’t agree with, resigned from the bank and made her company into a full-fledged, official credit repair business.

Ivonne Arvizu has always been about excellence and flying the flag high all her life. Despite coming from a humble background and a poor family that never fulfilled the American dream, Ivonne set out to make a difference. She became a homeowner at the age of 20 and has dedicated more than 18 years of her life helping the Latino community elevate its financial status. Ivonne has been featured in Spanish programs on television networks like Telemundo, Univision, Radio Nueva Vida, Radio Inspiracion, and other broadcast services educating the public about financial freedom. Through La Reyna Del Credito, Ivonne is changing lives and shaking things up in the financial world.

La Reyna Del Credito was established on the premise of “Life happens, and anyone can get into a bad credit situation.” In Ivonne’s words, “Nobody ever hopes to have bad credit. It just happens, and it does not discriminate. There are so many variables that cause people to have bad credit and fortunately for them, ‘La Reyna del Credito’ exists.” Beyond fixing bad credit scores, La Reyna Del Credito helps people get their mortgage credit within days so they can buy their dream homes without stress. The company established a FICO program that ensures this guarantee, and it has boosted La Reyna Del Credito’s credibility in the Latino community.

La Reyna Del Credito has proven to be a game-changer for the Latino community and has pushed its members to focus on becoming more financially stable in their retirement age.  With more than 1,087 real estate deals closed in 2018 alone and a money-back guarantee on all credit fixes if the company does not deliver the score, La Reyna Del Credito has given people more confidence in its services as it continues to deliver excellent results. The bulk of the company’s clients are Spanish-speaking Latinos who migrated to the United States without knowledge of how credit scores work, and they need guidance. Ivonne Arvizu has built something outstanding, and she’s willing to see it through till she has fixed the finances of hundreds of thousands of people.

Learn more about La Reyna Del Credito on the company’s official website.

Media Contact
Company Name: La Reyna Del Credito
Contact Person: Ivonne Arvizu
Email: Send Email
Phone: (213) 434-9873
Country: United States
Website: http://www.lareynadelcredito.com

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Improve Your Credit Score with a Credit Repair Company

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Securing a loan for your home or business investment can turn out to be quite overwhelming for individuals and businesses out there. People with poor credit scores often struggle with their loan applications, as it gets a bit challenging to have your loan application approved at a low interest. In fact, a credit score happens to be the first thing a bank or a financial institution is likely to notice when reviewing your loan application.

Sometimes, simple things such as late payments and irregular bill payments can lower your credit score significantly. Even if you manage to find a private lender who’s willing to approve your loan application, there is a good chance they will charge you a high interest for the loan.

Why Do I Need to Hire a Credit Repair Company?

It isn’t always your utility bills or debt payments that lower your credit rankings, but sometimes, you might end up with a bad credit score because of a small error on your credit report. Regardless of the complexity of the issue you are facing, you can’t deal with the problem on your own. It is important that you seek help from a credit repair company to look into the matter and fix the issue quickly. As the name suggests, the credit repair company is in charge of fixing the errors in your credit report and removing the items that might be lowering your credit score. This includes charge-offs, late payments, liens, debt collections, and so on.

With a large number of credit repairing companies claiming to offer high-quality and cost-effective services, the decision of choosing the most reliable company could be a little overwhelming. Each company offers a set of unique services that are designed to improve your credit score in different ways. You might have to apply for a loan to finance emergency health requirements, your dream home, a startup, business capital, child’s education, and other requirements. Here are a few other reasons why you must hire a credit repair company:

·      Fix Inaccuracies on Your Credit Reports

Research shows that more than half the population of the United States report inaccuracies and unnecessary errors in their credit reports every year. These errors occur due to the miscalculation is wrong information. As mentioned earlier, it isn’t always your debts and late payments that affect your credit rankings.

Sometimes, small errors in the report could have a profound impact on your credit score. It is, therefore, important for businesses and individuals to get their credit reports reviewed once in a while. Only a credit repair company has the expertise and skills it requires for reviewing the credit reports thoroughly and fixing the errors. The sooner you get these errors fixed, the faster you will be able to apply for a home loan.

·      Job Opportunities

Many reputable companies ask applicants to attach a copy of their credit reports with the job application so that they know their staff is trustworthy. A good credit score increases your chances of getting hired by a reputable company.

·      Insurance Policies

You can’t secure the best and low-priced insurance policy with a bad credit score. It’s important to work on your credit score to get the best deals on insurance policies. That’s because a majority of insurance providers offer insurance plans based on your credit reports. A reliable credit repair company will help fix your credit score, saving you a significant amount of money on an insurance policy.

Best Credit Repair Companies

There is no denying that good credit repair companies can help improve your credit reports by erasing the negative items and fixing the inaccuracies. Here are a few popular credit repair companies you can count on for premium services.

·      Credit Saint: With more than 10 years of experience in this industry, Credit Saint tops our list of the best credit repair company. The Better Business Bureau has rated it A+ for the variety of services it offers. The company has undoubtedly improved the credit rating of a large number of customers successfully over the past few years. It reviews your FICO credit score, evaluates the negative items, and fixes the damaged credit score.

·      Sky Blue Credit: If the price and quality of the services are your main concerns, Sky Blue Credit is your best bet. The company has kept a fixed price, which is $79 a month, for an extensive range of credit repair services.

·      The Credit Pros: With over 200,000 customers based across different parts of the world, The Credit Pros is a 12-year old company that has received an A+ rating from the Better Business Bureau. You can enroll in its monthly plan that costs a flat fee of $49 or choose the prosperity package – whatever fits your preference and budget.

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