Are you thinking about buying a new car or going house-hunting? The chances are you don’t intend on paying cash for these items. We live in a credit consumer society, and we rely on credit from financial institutions to fund our large ticket purchases.
Imagine if you had to purchase your new house with cash. If that were the case for every American, then most of us would be stuck renting our home for the rest of our days. Credit makes it possible to acquire anything we please, enabling us to take monthly bite-sized chunks out of our promise to repay.
Credit built the modern world. Everyone from private citizens to banks and governments relies on a steady flow of credit to manage finances.
What if You Have Bad Credit?
Everyone experiences a time where they couldn’t afford to pay off their debts. Life is full of financial ups and downs, and we rarely see financial misfortune before it arrives. If you get retrenched from your job, you’ll probably rely on credit to fund your lifestyle, while you find a new position with a company.
People use a revolving line of credit to fund their monthly purchases, and then pay off their credit card balance at the end of the month, before starting the credit cycle again.
What if you can’t afford to pay your bills? Credit cards, auto loans, student loans, mortgages – Most Americans have these types of debt. In most cases, we don’t give a second thought to mounting debt loads – until we can no longer afford to pay our monthly installments.
If you fail to meet your payment obligations, then the chances are that the creditor will give you a few months grace to catch up on your outstanding debts.
However, there comes a time when they will try to recover their money from you. If they believe you can’t pay your debts, then they’ll file with a credit bureau like Equifax or TransUnion, and lodge you as a non-payer.
The credit bureau places your name of a list of non-payers and adjusts your credit score to suit your financial position.
Failing to pay your debts is not the only reason why you may end up with bad credit. Americans that try to obtain too many credit facilities, or experience multiple enquires on their credit score from lenders, may also end up with a poor credit score.
What is a Credit Score?
The United States has four major credit bureaus that act as watchdogs over the credit market. TransUnion, Equifax, and Experian, and Innovis. These four bureaus rely on credit reporting agencies to collect information from consumers regarding their credit health. These reporting agencies look at your financial and legal health.
How you pay your bills, lawsuits against your name, criminal records, and bankruptcy filings – all play a significant role in determining your financial health.
The credit bureaus collate this information from credit reporting agencies to create your credit profile and issue you with a credit score. Your credit score is a vital component of your financial health. If you have a credit score below 500, you’ll find it challenging to get any credit facility.
A low credit score means that you might not be able to rent an apartment. You may struggle to lease a car, apply for a personal loan, or obtain a credit card facility. Insurers may deny you coverage, and you can forget about applying for a mortgage with a lender.
A low credit score significantly reduces your opportunity in life. Some employers don’t like to hire people with low credit scores, as they see these individuals as desperate. As a result of their financial position, they may do something that harms to the company. Selling information to competitors or stealing assets from the business are real concerns for business owners.
Credit Scores: The Numbers Explained
If you have never checked your credit score, then visit one of the online credit bureaus. Most of these institutions allow you to obtain a free copy of your credit report once a year.
Your credit report contains all of your outstanding debts, as well as any judgments or non-payment issues creditors lodge against you.
All of these factors determine your credit score.
The bureau issues you with a credit score between 0 to 850, which lenders look at to determine your creditworthiness.
- People with a credit score of 500 or under, are in seriously poor financial shape. Individuals with this score can forget about applying for credit, as most lenders refuse to open accounts with individuals who have this low score.
- If your credit score is between 580 and 640, then the lenders consider you as an average to moderate risk. You may find that most lenders are willing to open credit facilities for you, but they often come with unfavorable terms, such as high-interest rates.
- Credit scores between 680 and 750 are considered good, and you won’t struggle to open any credit facility.
- If you have a credit score of 750 to 850, then lenders will do anything they can to obtain your business. They see you as the lowest risk, and offer favorable terms with the lowest interest rates, on any credit facility you desire.
Top Tips to Repair Your Credit Score
If you have bad credit, then it’s possible to improve your credit score and your financial health, returning you to a credit-worthy state with the bureaus. Here is a step-by-step process you can follow to rehabilitate your credit.
Get a Copy of Your Credit Report
Knowing your current credit score is the first step in getting back on the path to financial health.
All three of the credit bureaus, TransUnion, Experian, and Equifax, operate as “for-profit” companies that make their living out of monitoring and assessing the credit market, keeping consumers in check. When applying for a credit facility, lenders check on your credit report with one or more of these institutions. The lender pays a fee to the credit bureau for accessing your information.
However, all three of these institutions allow you to download a free copy of your credit report once a year. There are some private companies, such as Credit Karma, that also will enable you to view a free credit report as well. However, we don’t recommend using these services, as many of them sell your information to your creditors, allowing them to tighten the noose around your financial situation.
After downloading your credit report from one of the credit bureau’s, you’ll be able to see the exact state of your credit health. The report lists all of your outstanding non-payment accounts with lenders. You’ll also be able to view any judgments against you, including defaults on credit facilities. The report issues you with your credit score, between 0 and 850.
It’s a prudent strategy to obtain your credit report from all three bureaus, as they may not all have the same information.
Lodge a Dispute Against Errors or Negative Marks
The internet changed the way credit agencies report to the bureaus. Today, a few clicks of a mouse and a quick entry on a keyboard is all it takes to ruin your credit score. Fortunately, this is a double-edged sword, and it’s simple for you to use the same online process, to dispute any errors or negative marks you find on your report.
In the past, you had to write a letter to the credit bureau to dispute any errors, but email simplifies this process, allowing you to obtain an electronic copy of your request.
When disputing any errors, start with judgments and collection accounts. These derogatory marks carry the most weight with the credit bureaus, and they create the most significant amount of damage on your report. It’s relatively common for most people to have at least one collection notice on their credit report, with most of them being from healthcare providers.
In many cases of medical collection notices, it’s typically not your fault, as there may be a dispute between the provider and your healthcare company. As a result, the provider issues a collection against your name, not the insurance company. In this case, you have two options.
The first method is to dispute the claim with the bureau. The bureau notifies the collection agency, and they have 30-days to confirm the collection. Should the collection agency fail to reply to the bureau with valid paperwork to prove the mark, then the bureau will wipe it from your report, and your credit score will increase.
If this dispute fails, then you have the option of paying the collection and restoring your credit score.
File to Dispute Any Invalid or Incorrect Late Payments
Unfortunately, many collection agents or creditors rely on employees to lodge complaints or non-payments with the credit bureau. Humans are flawed creatures, and its more than possible that someone on the admin team mistakenly filed against you, instead of the correct person. However, while this mistake may seem innocent on behalf of the creditor, it affects your credit score.
Creditors may not update your payment into their system, or they may enter an incorrect amount. Therefore, you have the right to dispute these claims. The creditor must comply with your request to the bureau to investigate your request. In most cases, the creditor has 30-days to answer the application, or the bureau removes the mark from your credit report.
It’s also possible to dispute late payments using the same method. The payment history on your credit report is another area where you can challenge these entries. While it may take time and effort to remove these marks, the result is an improvement in your credit score, so don’t let them slide.
Use the Same Process to Dispute other Marks
We discussed the importance of challenging inaccuracies and mistakes on your credit report. Fortunately, you can use this method to dispute valid claims as well. If you had an account that went to collection, and the collection agency gives up on chasing you, then the mark remains on your credit report.
Using the previous method described, you can challenge the mark. In many cases, this strategy works, and the bureau will remove it from your report. The credit bureau will send the request to validate the claim to the creditor, most of which they ignore. If the creditor does not protest the demand in 30-days, the bureau removes the mark from your report. While this strategy is not ethical, it’s worth a shot.
Increase Your Credit Limit
There are more than 1.27-billion active credit cards in use across the United States. How you use your credit card plays a significant role in your credit score. The ratio of unused to used credit on your facility is a leading factor in determining your creditworthiness and credit score.
If your credit card is close to maxed out, then call the bank and ask them to extend your credit facility on your card. While this strategy may not work for those individuals with poor payment history, or a credit score under 560, it’s a viable option if you have a good payment history with your credit provider.
Applying for another credit card with another lender is another workaround to increase your credit limit. After you receive the card, your credit score improves to match the new total credit threshold under your name. Make sure that you don’t spend anything on the new card, or you are going backward.
If you can’t get the lender to increase your credit card facility, then consider paying down your credit card debt as a priority.
Pay High-Interest Accounts First
Try using the “debt-snowball system.” Make a list of all of your creditors. Classify the list based on the size of the debt and the age of the account.
Credit bureau’s measure the average length of time it takes you to pay off debt. If you have new accounts, then pay those down first before focusing on your older debt. This strategy helps to drop the ratio and improve your credit score.
Pay debts with the highest APR and monthly payments first. Doing this helps you avoid paying unnecessarily high interest, giving you more funds available to pay off any other sources of debt.
Paying accounts late negatively affects your credit score as well. If you do have to make a late payment, prioritize whom you pay first. Credit cards, mortgage facilities, and auto loans are the top-tier for creditors you should concern with paying immediately. These lenders are the most likely to report your current non-payment or slow-payer status.
Cellular providers and utilities are more likely to give you a grace period before they report you to a bureau or credit agency. On your credit report, there is a section listed as “Accounts.” Check the accounts listed on this page, and prioritize these payments first.
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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