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How Long Does it Take to Improve Credit Score?



Lenders, insurance companies, recruiters, and landlords use it to make decisions. Consumers with excellent status access the best offers, cheap borrowing, and premium services. So, what should you do if your current total is disappointing? There are two ways to improve it — by repairing or rebuilding it.

The indicator is based on three versions of your financial history. Reports from the nationwide bureaus (Experian, Equifax, and TransUnion) detail various aspects of your borrowing experience. These records are not always accurate, which is why credit repair companies are flourishing. You, too, may need their services.

Where You Stand

Begin by collecting and analyzing the score and the three versions of your history. Note that most negative items on a credit report stay on the records for seven years, so you should not let mistakes tarnish your status. To check the total, you may use My FICO or finance apps like Credit Karma.

The reports are available on Note that this is the only authorized source, and the documents are provided for free on a weekly basis. This is an emergency measure valid until April 2012. Previously, a consumer was entitled to one free copy per bureau per year.

Examine the documents closely to find suspicious entries. You may discover an account that does not belong to you or an event (e.g., late payment) that never happened. Positive information may be missing. The amounts may be wrong. Negative events are known as derogatories, and they include such items as:

  • missed and late payments
  • collections
  • bankruptcies
  • evictions
  • repossessions
  • charge-offs, etc.

If any of the details look suspicious, you may dispute them formally, or delegate this job to professionals. Unfortunately, reporting mistakes are quite common. According to the Federal Trade Commission, one in five Americans has some form of inaccuracies skewing their status.

Meanwhile, under the Fair Credit Reporting Act, the bureaus are obliged to provide only verifiable information, which gives grounds for disputes.

How Many Points Can You Gain and How Soon?

This depends on the number and the nature of the inconsistencies. Information about missing or late payments is the most consequential — it affects 35% of FICO and 40% of VantageScore calculations. A repair company should give you a tentative evaluation, but there are no guarantees, as this is not a science.

Duration also varies. Typically, repair companies work between three and six months on each case. The process includes several stages: a collection of reports, analysis, preparation of evidence, and disputes.

After receiving a dispute letter, a bureau has 30 days (sometimes, 45) to conduct an internal investigation. Then, it accepts or rejects the changes. Professional services reduce the probability of redisputes, as experts collect sufficient evidence.

Repair vs. Rebuilding

Repair is not the only way to achieve a rise, and it does not work for accurate histories. When the details are correct, or you want a stronger boost as soon as possible, rebuilding is indispensable. This method is based on the readjustment of different factors underlying the calculations. For example, here are the elements of the FICO formula:

  • Previous payments — 35%
  • The total amount owed — 30%
  • Age of History — 15%
  • New accounts — 10%
  • Credit mix — 10%

As you can see, each component has a particular weight. Aside from making all payments on time, you could work with your limits and balances to adjust utilization, which is included in the total debt. This is the proportion between the amounts charged across credit cards and the size of overall available credit.

Suggested Rebuilding Methods

To get results as soon as possible, consider changing your attitude to borrowing, adding more information to your reports, and limiting new applications. Here are a few ideas to help you.

1.    Reduce the Balances

Try to pay off some or all of the balances on your cards. The ideal target is 10%. This means that for several cards giving $4,000 in total, the ideal sum of balances is $400. Naturally, this method is not feasible for everyone. If you cannot afford to achieve it, consider alternative methods.

2.    Get More Credit

Ask for a limit extension. If the bank turns you down, try getting another card from a different issuer. Secured cards are the easiest to qualify for, as they require a deposit. Finally, you could become an authorized user on someone else’s account. If you have a family member or friend with an excellent history and they agreed to do you a favor, their limit will be included in your utilization. Thus, by reducing balances and extending limits at the same time, you may get to the 10% threshold.

3.    Use Experian Boost

This free online service from the bureau allows you to include additional information for the assessment. Your phone payments, utility bills, and streaming video subscriptions may be included. This results in a 12-point boost on average.

4.    Apply for Credit Sparingly

Avoid applying for different types of credit within a short period of time. Every time a financial institution accesses your records, this leaves a hard inquiry. A high concentration of these entries is a negative factor. Rate shopping, however, is fine, as applications for the same types of services are treated collectively. Thus, plan your applications.

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To Conclude

For quicker score enhancement, use repair and rebuilding methods at the same time. Reporting errors are not rare, but you can only rebuild your history when it is accurate. The fastest ways to get a boost are based on work with various components of the total. The duration depends on your current status and objectives. Improvements do not happen overnight, so plan well in advance.

Published August 10th, 2021

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Are Sallie Mae Student Loans Federal or Private?



When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances



Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit



Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.



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