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Credit Repair: How I Increased My Score 200 Points

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Credit repair is something many will have to go through at some point in their lifetime. Having personally gone through this, I have mastered the art and know with confidence this article will help boost your score. I know, you’ve heard this before from various websites offering advice on credit repair. Wouldn’t it be nice to hear from someone who actually went through the credit repair process? Do you want a perspective from someone who once had HORRIBLE credit and was/is now able to finance a newer model luxury vehicle with low interest rates? Would a 200 point credit score increase across all three major credit bureaus convince you to at least take a look at how I pulled this off? Here is graph to show just how much my score improved after taking a massive dive over a year ago:

Credit Repair

Since this graph was generated, my credit score has improved to above 700 points. I now have a lot more financial freedom than what I dreamed was possible in such a short time. Amazing isn’t it? I raised my score more than 200 points in a years time! Now let’s talk about how I made this happen. I’ll list what actions I took in order from most impactful to least (although each part is important). Before we start, check your score to see where it is at. The best free site with no hidden cost would be Credit Sesame. Click Here for more info and to get started with them.

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Credit Repair – Dispute Inaccurate Information

Disputing inaccurate information on your credit report is the quickest way to boost your score. Lenders will report your payment history typically to all three credit Bureaus. This includes both the good and the bad. But what if I were to tell you that not everything reported is accurate? In my case, there were quite a few items on my credit report that even I had never heard of. Also some accounts had inaccurate payment history information. So I went to the website of each of the bureaus and dispute all of the information that was not accurate to my credit profile. This alone led to a credit score increase of just over 100 points as it eliminated a lot of the payment and collection activity I had listed on my report that were not applicable to me or had inaccuracies.

To start a dispute, go to the following links for each credit bureau:

Experian Online Dispute Form

Equifax Online Dispute Form

TransUnion Online Dispute Form

I would not recommend disputing everything you see unless you know it is inaccurate. If the creditor cannot verify the debt, the credit bureau will remove it from your credit report. In my case, I had three inaccurate items on my credit report regarding missed payments. I dispute these items with all three of the major credit bureaus using their simple online dispute forms listed above. The result of the dispute was the credit item falling off of my credit report completely. This lead to a MASSIVE and permanent credit score increase.


Credit Repair – Resolve Collections

Collections can really hurt your credit score, especially if they are for a high dollar amount. I had quite a few through the years due to neglecting to check my credit and poor financial choices in college. This is not the end of the world; there are many ways to address collection accounts on your credit report. Here’s how I addressed mine.

Pay For Deletion

This would be the first option I would recommend after disputing the collection items that are inaccurate. If the collection item is valid and you know you’re liable for the full cost, simply reach out to the collection agency and ask for a “pay for delete” over the phone or through the mail. Be sure when doing this, you get the agreement in writing to avoid having the creditor/collection agency backtrack. If you would like a sample letter that you can use for this, click here.

Pay The Bill

I know, this is not what you came here to read, but this will look MUCH better on your credit report than having an open collection account with a high balance. This will show you are at least trying to fix your credit and set yourself up for a better financial future and better habits. Lenders will take note and this can be the difference between an approval or denial after a credit review.

Good Will Letter

Once the bill is paid, you can still reach out to the creditor through a goodwill letter. Basically, this is a letter explaining to the creditor what led up to the delinquent payment on the account that was sent to collections. Here you can explain your hardships or other major life events that contributed to you falling behind on the bill. Typically, creditors will show mercy if there is a valid enough reason for the credit accounts negative standing, and will remove the negative marks from your credit report. If you’re paying the bill, why not try this?


Credit Repair – Secured Credit Card

If you are unable to get approved for a traditional credit card or know your score is too low for a credit card approval, the next best thing is a secured credit card. You can easily get approved for a secured credit card loan with a small deposit. Depending on your credit score, you will either pay an amount equal to your credit line, or slightly below in some cases. In my situation, I cleared up enough items to only have to pay $50 for a $200 credit line. At the time, my score was in the VERY low 500 range (yes, I dipped deep into even the 400’s). Here are a few secured credit cards I would recommend:

Capital One Secured Credit Card

Discover Secured Credit Card

Citi Secured Credit Card

1st Premier bank Secured Credit Card

Once again, you have to start somewhere. This will help build both your payment history and overall credit worthiness. If you maintain this card well, it will be a lot easier to get a traditional credit card down the line.


Credit Repair – On-Time Payments

Paying bills on time will help your score continually grow as your payment history score grows. For example, in the FICO formula your payment history makes up 35% of your credit score. That is a lot! making payments on time even for as little as a year can have a really big impact on your credit score. If you combine this with all of the tactics used to repair your credit, you will see a VERY big score increase literally within months of starting your credit repair endeavor.

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Follow these tactics and I know you will have a respectable credit score. You will finally feel financially enabled to apply for a loan or line of credit you’ve always wanted. Financial mistakes from the past become only lessons and no longer affect your life. Please do not abuse the system; try your best under any circumstance to pay your bills. But if you pay them and want to repair your credit, by all means try these tactics. You have nothing to lose! If you would like to learn more about how credit scores work, please visit my article discussing the FICO credit score. This article breaks down the components of your FICO credit score and explains it in depth. Having this information will help a lot during the credit repair process.

If you do not wish to repair your credit yourself, check out my review of our Top 3 Credit Repair companies. These companies have been reviewed by real people and feedback is based on actual customer experience (not just internet reviews). click HERE to see this article.

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Has Your Identity Been Stolen?

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Identity theft and data breaches are increasingly common threats to anyone who makes transactions online or shares their information with an online platform. Identity theft has evolved into various forms with fraudsters finding new ways to bypass security systems. Read this blog about data breaches on Facebook & LinkedIn.

A 2019 report put the number of identity theft victims at 13 million in the US. Attacks cost them $3.5 billion out of pocket. The risk of identity theft is higher for those on social media platforms. Identity thieves use automated software to scrape and aggregate public information from social media platforms creating a profile that can be used fraudulently.

327 million users in the recent LinkedIn data breach suffered such an attack. Facebook has recently come under fire over a misreported data breach that affected more than 500 million of its users’ personal information.

It seems we’re all at risk of having our data “pwned” in a breach or getting hacked. How can you protect yourself as a consumer? To better protect yourself from a data breach, you need to know what you’re up against.

The Most Common Types of Identity Theft Online

  • Account Takeover

    Account takeover occurs when someone gains access to your accounts and takes control of them without your knowledge or consent. They can transact and withdraw funds just as you would.

  • Debit and Credit Card Fraud

    This type of fraud occurs when someone makes unauthorized transactions using your card. They don’t need your physical card, the card number, pin, and security code are sufficient to do damage and even attempt hacking your other accounts.

  • Online Shopping Fraud

    This is most common when using public WIFI. Scammers will pose as fake merchant websites to collect your payment information when you check out.

  • Mail Fraud

    If your mail is intercepted, sensitive personal information like social security numbers can be acquired. Be vigilant and spot if any in mail statements you have subscribed to fail to arrive.

  • Tax Identity Theft

    Fraudsters file tax returns using your personal details and then keep your tax refunds. This type of identity theft has been on the uptick due to the new programs related to COVID-19 such as the direct stimulus check and tax due date extensions.

  • Senior Identity Theft

    Senior citizens are particularly prone to identity theft scams. Scammers get senior citizens to divulge personal information by pretending to call from the IRS or Social Security Administration.

    Often their social security numbers are used to create fraudulent profiles and take out lines of credit.

  • Medical Identity Theft

    This occurs when someone poses as you to get medical care in your name. You will get extra charges on medical services you didn’t use or your medical insurance premiums go up inexplicably.

  • Signs of Identity Theft

    These warning signs can be spotted through regularly monitoring your credit report and finances.

    1. Strange transactions on your debit or credit cards
    2. Credit card bills and statement fail to come in the mail without you opting into paperless billing
    3. Your credit score going up or down inexplicably without any different actions on your part
    4. Unrecognized social security number in your records
    5. Rejected electronic tax return
    6. Receiving an unrequested tax transcript
    7. You’re denied a credit card application or loan with no known reason
    8. New accounts and credit cards in your name that you didn’t apply for
    9. Debt collector calls about unknown accounts
    10. Inaccurate medical records

How To Check If My Identity Has Been Stolen

Here are the signs to look out for if you suspect that you’re a victim of identity theft.

  • Check your credit card bill and bank account statements often and report any discrepancies immediately no matter how small.
  • Run your credit report or register for a credit monitoring service that can do it for you. Data breaches may affect your credit score.
  • Monitor your finances closely can help you spot trial transactions by identity thieves
  • Use trusted data leak check tools like HIBP or the one by Cybernews to verify if your email address, phone number, and domains have been in data breaches.

Here’s some more information on how to detect identity theft.

What To Do If Your Identity Is Stolen

  1. The first step is to report the instance of identity theft immediately to the relevant organizations such as your bank or credit card issuer. Have them cancel the cards and issue new ones. Most importantly, freeze your credit with the credit bureaus to make sure more damage can’t be done.
  2. Change account details associated with the cards such as usernames, pins, and passwords.
  3. File a police report and check out FTC’s identity theft site to report the identity theft and get a recovery plan.
  4. Regularly review your credit report. US citizens are entitled to one free credit report per year.
  5. Request the removal of the fraudulent activity from your credit report. You can also dispute
  6. Set up a fraud alert that has multiple-factor authentication before processing a new application. You can also freeze your credit which will bar any new applications. It will make credit applications more complicated for you but is well worth the hassle.

How To Protect Yourself From Identity Theft

It’s better to be proactive rather than waiting to mop up the mess after a data breach or identity theft attack. Here are safety measures you can apply:

  1. Use strong passwords with two-factor authentication or sign up for secure password managers like 1Password.
  2. Never share personal information over the phone since legitimate organizations will never call to ask you for these details
  3. Only use trusted WiFi networks especially when banking or shopping online.
  4. Check your credit report regularly and monitor your finances for discrepancies
  5. Keep your social security card in a secure place, never in your wallet.
  6. Review healthcare and insurance notices for any suspicious activity or dates that don’t add up
  7. Protect your mail by shredding any personal information. Monitor your mail to make sure no notices or bills are missing.
  8. Be mindful of anyone looking over your shoulder as you enter sensitive information.

The best way to combat identity theft is a combination of robust passwords and caution in your online transactions. Constantly monitor your credit report, your finances, and insurance notices to catch the fraud early.

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Data Breaches on Facebook & LinkedIn: Has Your Identity Been Stolen?

Article Name

Data Breaches on Facebook & LinkedIn: Has Your Identity Been Stolen?

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Read this blog about data breaches on Facebook & LinkedIn. Identity theft has evolved into various forms with fraudsters finding new ways to bypass security systems.

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Jason M. Kaplan, Esq.

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The Credit Pros

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How Does Mortgage Interest Work?

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Mortgage interest rates are a crucial determinant of whether a renter takes the leap into homeownership. Lenders will typically finance up to 80% of the buying price. It is important to understand how mortgage interest works and what goes into your monthly mortgage payments before you sign up.

The total monthly amount that you pay may have other payments tacked onto it such as:

  • Fixed-Rate Mortgages

    A fixed-rate mortgage is one where the interest rate is locked for the entire repayment period. Your monthly repayments are also fixed throughout.

    This type of loan typically has a long lifespan of 30 years. Shorter repayment periods of 10, 15, or 20 years are available at a lower interest percentage but higher monthly repayments.

    Example: A $300,000 mortgage for 30 years at an annual interest rate of 3.42% following a 20% downpayment breaks down as follows:

    • Monthly repayment for 30 years (360 months) – $1,577.85
    • Total mortgage size (principal) – $240,000
    • Total mortgage interest – $144,126.57
    • The monthly $1,577.85 = $ 1,067.02 (principal & interest) + $ 400.00 (property tax) + $ 110.83 (Homeowners Insurance)

    In the beginning, about 75% of your loan repayment is applied to the interest while 25% goes to the principal. As your interest accrued diminishes, more and more of your monthly fee is applied to the principal loan amount. This is called building equity.

    Eventually, by your last payments, the whole monthly fee will be applied to paying off the principal.

    A mortgage calculator can help paint a financial picture for you for the coming years.

    One financial tip for decreasing your interest rates over time is to apply lump-sum payments to the principal of the mortgage loan. A smaller principal equals less interest.

    Think end-of-year bonuses, tax refunds, and other auxiliary money coming in. Or you can add the lump sum to your monthly savings budget. If you need help saving money, here’s a short beginner’s guide on how to save money.

    The primary benefit of fixed-rate mortgages is predictability. You know how much you will pay monthly for the next 30 years. You’re protected from interest rate fluctuations.

    Longer repayment periods allow you to have the lowest monthly payments but cost more overall because you pay more interest.

    Shorter payment periods have lower interest rates but the monthly burden on your budget is much higher.

  • Adjustable-Rate Mortgages

    In this type of loan, the interest rate is variable. The lender will usually start you off on an initial interest rate that is lower than that of a comparable fixed-rate loan.

    As the repayment period progresses, the interest rate slowly increases. If left long enough, the interest rate may eventually surpass that of fixed-rate loans.

    Some of the considerations and terms to keep in mind for adjustable-rate mortgages (ARM) are:

    • Adjustment Frequency is the period between interest rate increments and is usually pre-arranged.
    • Adjustment Indexes are the benchmark on which your interest rate adjustment is based. The benchmark could be the treasury bill interest rate.
    • Margin is the amount above the adjustment index you agree to pay for your mortgage interest rate.
    • Caps refer to the limit on how much the adjustment is raised per period. In the case of a negatively amortizing loan, it is a cap on your total monthly payment.
    • Ceiling is the highest amount your interest rate is allowed to reach during the lifetime of the loan.

    Please note that in the case of negatively amortizing loans, the cap only applies to a portion of the interest. If the interest is left to accrue, it becomes a part of the principal resulting in a higher owed sum than what was borrowed.

    Example: A 5/1 hybrid ARM starts with a five-year period on a fixed interest rate. Thereafter, the interest rate rises according to the capped limit per period until you finish paying off the loan or the interest rate reaches the ceiling. Here is a breakdown:

    • A $200,000 loan for 30 years will be charged at 4% for the first five years
    • Monthly repayment for the first 60 months is $955
    • The next 12 months’ rate goes up by 0.25% to $980 then $1055 in the following year and so on.
    • These amounts don’t include insurance and taxes.

    The main benefits of ARMs are:

    • They are cheaper than fixed-rate loans in the short term up to seven years.
    • The borrower can qualify for a bigger loan due to lower initial payments
    • In a falling-interest market, the borrower enjoys lower interests and repayments without refinancing the mortgage

    The major downside of ARMs is the fluctuating monthly payment which can be a significant burden for large loans or if the interest rate doubles.

  • Interest-Only Loans and Jumbo Mortgage Loans

    These third and fourth loan options are mainly geared towards wealthy homeowners.

    Interest-only loans allow your monthly payments to be applied only to the interest for the first few years. The monthly payments will be lower but you will not be building equity. This type of loan is best for the homeowner who expects to sell soon and move on.

    Jumbo mortgage loans are those where the loan amount is higher than the conforming loan limit set by the Federal Housing Finance Agency. The US national baseline in 2021 is $548,250. In certain parts like New York, San Francisco, Hawaii, and Alaska, the limit goes up by 150%.

    Jumbo mortgages can be fixed-rate, adjustable-rate, or interest-only. In all cases, the interest rates tend to be higher.

  • Other Costs

    Even with a great interest rate, other costs associated with being a homeowner can bump up your monthly repayment.

    Real-estate taxes and homeowner’s insurance are sometimes included by lenders in the mortgage payment. The money is held in escrow for the lender to pay the bills as they arise.

    Homeowner’s Association (HOA) fees can also be quite steep depending on the property location and type.

    The type of mortgage you choose depends on how much you can pay monthly and how long you intend to live in the house. The interest rate forecast trends matter and whether you have sufficient cushion to finance ARMs.

  • Your main aim is to get an interest rate that is great for your pocket and will bring you closer to your financial goal of being a homeowner. Interest rates are determined based on the interest rate set by the Fed and your credit score. See how your credit score can affect your interest rates!

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    How You Hurt Credit Score

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    Most people have a general idea of how good their credit is. If you pay your bills, don’t borrow too much, and keep a good mix of credit, you’ll probably have very good credit… right? Get to know how you hurt credit score.

    Well, not necessarily. There are ways that we inadvertently harm our own credit without even realizing it. Here are 5 things that could be hurting your credit, even if you’re not aware of them.

  • You haven’t checked your credit report recently.

    Your credit report will tell you all of the information that lenders use to determine your creditworthiness and your credit scores. (As a matter of fact, you actually have multiple credit scores all used for different purposes). The information that they need to know in order to decide whether or not to lend to you is all in your credit report. If you don’t know what’s on your credit report, then you’re left in the dark. You don’t know if you owe something that you forgot about or if there’s a mistake on your report that’s causing you problems.

    Many Americans don’t know how they can check their credit report, or if it costs money. Normally, getting access to your credit report will cost some money; however, the US government has made it so that anyone can check their full credit report once a year, from each of the three credit bureaus (Equifax, Experian, and TransUnion), completely free. In order to access your credit report, go to https://annualcreditreport.com (an official US government site) and follow the instructions.

    By checking your credit report, you’ll know what items are on there that could be hurting your credit score. Some of those items might be fraudulent, or they might be on your report by mistake. If you find items on your credit report that shouldn’t be there, you can dispute them by contacting the credit bureau that issued your credit report. Finding and eliminating these items is an important part of what credit repair companies like The Credit Pros do.

  • You never closed that phone plan, cable plan, utilities plan, or some other account.

    Many telecommunications and energy companies make it very difficult to cancel your subscription, which can cause undue payments to make it to your credit report. Not only that, but sometimes we forget to cancel our subscriptions before we move. As a result, we end up getting bills sent to our old address and we never see them.

    Since payment history is an important part of determining your creditworthiness, some of these contracts will be reflected on your credit report. If you miss a payment and the debt becomes past due, goes into default, or goes into collections, this information will be reflected on your credit report and your credit score will be dinged.

    You might have no idea if you still have these debts, and the only way to know is to check your credit report. Unfortunately, much of the damage would have already been done, however by settling the debt (preferably with a lump sum payment) you can see that item disappear from your credit report after seven years. You may also be able to arrange something with the company where they agree to get that item removed from your credit report, however this is up to the company’s discretion.

  • You’re not receiving statements from ALL your credit cards (even the ones that you’re sure should have a $0 balance)

    Similarly to the situation above, many people don’t receive credit card statements from all their cards. The average American has 3 credit cards, and many Americans have more than three. However, there’s rarely a reason to use all of those cards, so you may be only using one and keeping the others open.

    While keeping your credit accounts open is generally a good idea (and you don’t need to have a physical credit card for these accounts in order to do so), you want to make sure that you continue to receive statements for these cards. This is because, in simple terms, stuff happens. A fraudster may get a hold of one of those credit card numbers and start buying things online. Or, you may have made a purchase long ago that you had forgotten. Or, interest charges that accrued later may have stayed on the card. Whatever the case, you need to know whether or not you actually owe anything on ALL the credit accounts you have!

  • Your credit card balance is too high, even if you’re making payments toward it.

    One aspect of your credit score is your credit utilization ratio, which is the ratio of credit used over credit available. What does this mean? Let’s say you have a $10,000 limit credit card and your balance is $3,000. This means you have a credit utilization ratio of 30%.

    A credit utilization ratio of over 35% is generally considered a negative, as it means you’re using a large chunk of your available credit at one time. Even if you’re making all your payments on time, a high credit utilization ratio could harm your credit score over time.

    We recommend asking for a credit limit increase and setting a limit on spending with your bank or credit card provider. This way, you can guarantee that your credit utilization ratio never goes too high.

  • You avoid using credit cards or borrowing money because you’re concerned about debt.

    This one is less about hurting your credit, and more about preventing your ability to build credit. However, the hard truth about credit is that bad credit is BETTER than no credit. There is no credit score that is so low that you’d be better off by having no credit history whatsoever.

    There are Americans who swear off the use of credit cards and debt entirely in order to avoid potential problems with debt. This is a fine approach if you never intend on buying a home with a mortgage, or securing an apartment for rent in some places, or getting a job that requires a credit check. However, what’s more common is that there are Americans who use credit very sparingly and, as a result, they don’t have enough of a credit history to use debt that could potentially improve their standard of living, secure a business loan, or give them access to leveraged investments such as real estate.

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