When was the last time you took a look at your credit report? If you’re thinking about applying for a mortgage, car loan, or credit card facility, then the lender will view your credit report before they approve your facility.
If your credit score in the 500s, then the chances of your getting approved are slim. Even if the lender does approve the facility, chances are it comes with unfavorable terms, such as a high-interest rate.
Many of us never look at our credit report, and we wonder why we get turned down for a personal loan or credit card.
So, how do you check your credit score, and how do you repair bad credit? This process is not as challenging as it sounds.
How to Check Your Credit Report
There are three main credit bureaus in the United States; TransUnion, Equifax, and Equestrian. These bureaus collect data from credit agencies to determine your credit score. If you want to remain in good stead with lenders and receive the best rates on your loans, then you’ll need a credit score over 700.
The credit bureaus allow you to check your credit score once a year for free. All you need to do is request your report on their website, and it’s available for download in a few seconds.
Your credit report shows outstanding accounts, as well as collections or judgments filed by creditors. Americans should check their credit score at least once a year to look for any mistakes or discrepancies.
If you don’t ever view your credit report, then now is a good time to start. Log on to a bureau, and check it as soon as possible.
It’s a common occurrence for people to find that they have collections on their credit report for debts they didn’t even realize they owe. However, ignorance is no excuse.
Although you may not have known that you had a mark on your credit report, that doesn’t stop lenders from viewing it as a blemish against your name.
Collections and Judgments
It’s reasonably common for people who are viewing their credit report to notice they have collections from various creditors. A collection notice occurs when a creditor does not receive payment for money, products, services, or credit loaned or issued to you.
If you fail to repay the creditor, then they issue a collection with an agency to recover the debt. In many cases, your creditors will sell the outstanding debt to a collections agency that specializes in recovering outstanding debts from the consumer market. This debt is then resold from agency to agency, in the hopes that you will pay back the money you owe.
However, in many cases, the collector will not attempt to contact you about the outstanding monies. Instead, they prefer to issue a collection notice against you on your credit report, in the hope that you pick it up, and make the payment to settle the debt.
One of the most common examples of collections you may not be aware of comes in the form of unpaid medical bills. In many cases, the healthcare provider may run into an issue with your insurance, where your insurance refuses to pay the full outstanding amount.
As a result, the healthcare provider goes after you to recover the funds and not the insurer. This sad reality happens to more people than you can imagine.
If you’ve loaned money from financial institutions in the past and failed to pay them back, then you may have a judgment on your credit report. Collections and judgments are detrimental to the health of your creditworthiness, and no lender will take a risk on loaning you funds if you have a history of non-payment that led to a judgment filed against you.
Collections and judgments can prevent you from attaining car finance, insurance, or a lease agreement on an apartment. Therefore, it’s vital that you view your credit report for any judgments or collections, and take the appropriate actions to clear your credit report of these issues.
How Collections Work
To understand how to get rid of these notices, it’s vital that you know how they get on your report in the first place.
When you default on a payment, it doesn’t go to the collections department on the first day after the payment is due. In most cases, creditors will wait for anywhere between 60 to 180-days before sending your debt to their collections department.
Private companies and financial institutions have in-house collection departments that pursue outstanding debts during this time. However, if your contact information changes or you block the number on your cellphone, then it’s challenging for them to get hold of you and notify you about your outstanding account.
If the company or institution can’t get hold of you, then they typically write off the debt after 6-months and no longer attempt contacting you for the outstanding funds.
However, if the company or institution writes off the debt, it doesn’t mean that they let you off the hook. Writing off the debt means that the creditor removes your outstanding debt from their books. Companies do this to make their annual financial statements look better to investors and shareholders. No investor will want to put their money into a business that has significant amounts of outstanding debt.
In some cases, lenders may have insurance against any defaults. This strategy allows them to recover a partial amount of the money you owe from an insurer.
After the write-off, the company typically sells the debt to a collection agency, along with all of your personal information. It is now the responsibility of the collector to start the procedure of filing against you. The collection agency gets in touch with the credit bureau, who then issues a collection notice on your credit report.
The debt collection agency will make numerous attempts to contact you, in the hope that they can intimidate you into paying off the money you owe. Some collection agencies can be very self-righteous and demanding, to the extent that its borderline harassment on their part.
However, if they cannot get hold of you, or you still refuse to pay, then the collection agency may sell the debt to another collection agency, and the cycle begins again.
Each time the agency sells your debt, the amount owed typically reduces, until it becomes an insignificant amount, and the company writes off the debt, and you won’t experience any more threatening phone calls asking you to repay the money.
However, the non-payment collection notice will remain on your credit report, until you either query the validity of the collection with the credit bureau or contact the debt collector to arrange payment.
How Judgments Work
If you have a judgment against your name on your credit report, it’s a far more severe case to handle. A judgment occurs when a creditor wins a lawsuit against you in court, proving that you owe them money. Judgments may come from landlords where you absconded from the terms of your lease, or it may occur from you failing to pay your mortgage, and the lender goes after you in court to force you to pay the outstanding amount after foreclosing on your home.
In most cases, judgments occur after a collection notice is still outstanding for a given amount of time, depending on the policies and procedures in place by the creditor concerning collections. Judgements are typically for large amounts of money, if you owe a few hundred dollars to a creditor, you can expect that they won’t file a judgment against you for this amount.
The reason why not all collections reach the judgment phase is due to the high legal costs involved in filing a judgment. Creditors need to hire a lawyer and pay for the court appearance, along with other legal fees surrounding the paperwork and consulting required to finalize the judgment proceedings. It’s for this reason that most creditors won’t file judgment for amounts under $500.
The creditor presents their case to a judge in court, and the court decides on whether or not to issue a judgment against you. Creditors are obliged to notify you of a court date in which you have to appear to defend your side of the case. In most cases, the debtor does not show up to the court date, and the judge rules in favor of the creditor, making you liable for the outstanding amount.
Steps to Remove Judgments and Collections from your Credit Report
It’s a tedious process to remove collections from your credit report, but when they are gone, it’s a rewarding feeling. Follow these steps to remove collections from your credit report.
Review Your Credit Report and Check for Mistakes
The first step in removing collection notices from your credit report is to collect all of the information on the collection notice. Log on to a credit bureau and download a copy of your credit report.
The collection notice will have all of the relevant information on your outstanding debt owed. If you can manage to find the original invoice, then you can cross-reference this information to ensure that it’s correct.
Should the information differ, then you have the right to protest the collection notice with the Fair Debt Collection Practices Act. If not, then carry on with the rest of the procedure outlined below.
Ask the Creditor for Proof of the Debt
If a debt collector contacts you concerning the outstanding account, then you have the right to ask them for proof of the debt. The collector needs to provide you with relevant documentation of the amount owed.
If they fail to provide this information, you have cause to ask for dismissal and removal of the collection notice from your credit profile, as per guidelines set by the Fair Debt Collection Practices Act.
The FDCPA provides consumers with the right to have the information surrounding the debt issued to you within 5-working days from the date of issue of your request.
The debt collector must be able to prove the following for the debt to be considered valid.
The debt collector must issue verification of the debt or a copy of the judgment against you within 30 days. This verification must include the address and name of the original creditor.
If someone contacts you about a debt you owe, then it’s a prudent strategy to secure the proof of the debt before taking any action.
If the debt collector cannot produce the original documentation, then they cannot validate the debt, and you will have a far easier time removing the collection notice or judgment from your credit report in the dispute phase.
File a Dispute with The Credit Bureau
After gathering the relevant information regarding your collection or judgment, you’re ready to dispute the filing with the credit bureau. You’ll need to file each dispute individually with the credit bureaus, and you can do this online, without physically visiting the bureau’s offices.
The bureau may ask you to send them a copy of the bill dispute, as well as the details of the inaccuracies involved in the credit report. They may also ask you to submit supporting documents to serve as evidence in your case as well.
Determine the Statute of Limitations on Your Debt
Depending on the state in which you reside, the creditor has a limited time frame to execute on the option to sue you for collection of the funds. However, even if the creditor does not take the opportunity to sue, the collection notice remains on your credit report.
Make Arrangements to Pay
If you file a dispute with the credit bureau, and if the creditor does not reply to the bureau’s request for information within 30-days, you have the right to ask then bureau to remove the collection notice from your credit report.
Many creditors ignore these requests from the bureau, and there is a good chance that they won’t pursue the matter. This lack of follow-up on their part plays to your advantage, and you may get the collection or judgment removed from your credit report, even if you still owe the creditor the money.
If the creditor does respond to the bureau’s request, then you can make arrangements to pay the balance. After paying off the amount in full, you can apply to the bureau for removal of the collection notice from your credit report.
Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank or credit card issuer and have not been reviewed, approved or otherwise endorsed by any of these entities.
Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.
How to Get Help with My Credit?
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:
- history of payments (35%);
- the total amount of debt (30%);
- age of credit history (15%).
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:
- Increasing limits on credit cards or paying off the balances (this lowers the credit utilization ratio);
- Getting a new credit card (to bring down the same indicator);
- Taking out new loans and paying back diligently;
- 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.
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;
- 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.
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.
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.
Improve Your Credit Score with a Credit Repair Company
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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