Roger Passman asked:




In my work I speak to many people that have unrealistic, almost grandiose, ideas about repairing their credit. My response to the person whose expectations exceed the limits of the possible is to send them to someone else. One of the factors contributing to damaged credit in the first instance is that attention is not paid to the possible allowing grandiose ideas to stand in the way of sound financial planning.

When working to repair one’s credit there are three factors that must be considered. First, is the item you would like removed from your credit report legitimate? If it is it will generally stay a part of your report until time takes care of the item. Secondly, how old is the item you would like removed? The further away from the present the item is the less it impacts your FICO score. Finally, what has your credit history been in the past 12 to 18 months? If potential creditors see a pattern of on time payments and sound financial practices, it is more likely that they will offer additional or new credit even if your score remains somewhat damaged.

Credit repair consists of two important stages, both of which mirror the concerns mentioned above. The first stage is to work to remove inaccurate or mistaken information from one’s credit report that have an adverse impact on one’s credit score. Some items may look bad but have little effect on one’s overall score. A tax lien, for example, that has been discharged may continue to appear on one’s credit report for up to ten-years and, under some circumstances, even longer. But that discharged lien has a low impact on one’s overall score and may not be worth the effort to try and remove it. A pattern of late payments, on the other hand, may have a high impact on one’s score and may well be worth the effort to remove or re-age if removal is impossible.

The second stage in credit repair is to make sure that from the moment one begins to actively repair one’s credit that no additional adverse be recorded on the credit report. Not only does that defeat the purpose of the credit repair effort, it sends up red flags for the credit bureaus to not take your repair efforts seriously. That is the last thing one wants when working to restore one’s credit score to acceptable numbers. This stage requires a change in lifestyle, as one must relearn sound fiscal habits that will assure no additional adverse information be recorded by the credit bureaus.

Effective credit repair seeks to eliminate inaccurate, mistaken and unverifiable adverse information from one’s credit report. It cannot remove items that are legitimate, verifiable and true. To claim otherwise is unethical and may even be illegal.

Victor

Chane Steiner asked:


The search for credit repair help can be a little scary at times. There are so many factors that come together to lower your score that it can be confusing as well. Your exact situation will always be just a little different from anyone else’s; you need to evaluate it carefully. Once you’re able to see exactly what’s wrong, you can start researching how to fix it.

Many services offer to help consumers: credit repair services, counseling services, debt consolidation, and even friends and family. There are so many it’s hard to pick the right one: who’s right for you? This depends on your exact situation as well. Some of these offered services can help and hurt at the same time: credit counseling often lowers debt but also harms your actual credit score.

Keeping your used-credit to under 30% of your available credit is a major part of a high score. For a lucky few, all they need to do to raise that score is to pay their debt down. The best way to pay debt down is to create a budget, live well below your income, and consider taking on a second job. Do your best to avoid paying high interest fees for late payments on your credit accounts. Transferring high-interest amounts to low-interest accounts is another way to pay them off faster.

If your problem is negative items on credit report, you may need to resort to credit repair. That repair happens through disputes filed with the credit bureaus in an effort to remove the negative items. Once you send a dispute form to the bureau, it has 30 to 45 days to find verification of the information. It’s also possible to dispute public records: judgments, foreclosures, tax liens, repossessions and bankruptcies are all fair game.

In addition to the dispute letter to the credit bureau, you should also send a debt validation letter directly to the creditors of any debt on your record. This request must be in writing, and they have 30 days to reply. If they fail to reply, or can’t come up with accurate documentation showing your debt, law requires them to delete the account from your credit report.

If the creditor is able to validate the debt, and if the bureau doesn’t remove it from your report for lack of verification, you don’t have many options left. One of them is to contact the creditor directly and negotiate with them. Some creditors may be willing to delete the account from your report if you’re willing to pay the account in full or in part.

A smart consumer always knows the status of his or her credit score before trying for a new credit account. If you apply for an account, but you know you have little chance of approval, you’re harming your score even more. It’s a good idea to sign up for a credit monitoring service, so you can stay aware at all times of your score and report.



Lloyd

jorge05r asked:


I opened a new credit card account 07/2005 with MACYS, 09/2005 I stopped paying and now that Im monitoring my credit score I see it’s status which is (120 days late, Late by 4 payments)

My question is, Should I pay off that account, would it fix my score, make it worse, no difference, is it worth it?

Wanda

Marc Gaines asked:


Modern technological innovations have given us the convenience to purchase everything from the comfort of our homes. With the help of the Internet and credit cards we can buy our desired products and services from anywhere in the world without physically visiting the showroom or even making the cash payment. However, along with adding comforts to our shopping and many other benefits online transactions though credit cards might also bring troubles that are enough to take away your peaceful sleep! One of the most prevalent problems that credit cards users often face is identity theft, which is a new mode to duping without the knowledge of the victim.

Identity theft means stealing personal information of a person and impersonating him or her for making frauds. Phishing and hacking are some of the common means used for identity thefts involving credit cards. Your credit card number or social security number can be misappropriated by unauthorized persons and misused to cheat banks by fraudulently getting loans, making online purchases, or taking money from the ATM and it is obvious that you will be held responsible for all the transactions being made from your account. IDTheftDefense provides you with A to Z information on identity thefts, the ways of detecting and preventing identity theft, credit reports and a lot more.

Credit monitoring or credit “file” monitoring is an easy, efficient and affordable way to identify theft detection. You can even prevent identity theft by detecting mistakes in your credit report and correct them using credit monitoring services. Credit report, also known as credit history in many countries, provides detailed records of how much a person or company has borrowed and repaid in the past including information on late payments and bankruptcy. A credit score represents your creditworthiness based on the information collected from your credit report.

You can successfully monitor your credit report by using efficient credit monitoring services:

1. First of all, you can check credit report and make relevant inquiries into your credit line.

2. By reviewing your credit report you can easily identify if any new account has been activated using your identity.

3. Address changes on credit information and collection activities in your name can be easily detected from credit reports or credit histories.

4. Your credit report will reflect delinquencies or any negative change made to your account as well as information on closed accounts.

Though credit monitoring is an important step towards ID theft defense, it cannot be used to prevent them. Awareness is the key to check identity thefts. As an informed individual you can easily detect identity thefts or take appropriate steps regarding any mistake in your credit report. Thus, you can lessen the amount of financial or credit rating damage which results from the false or negative activity on the report. Credit monitoring will keep you informed and definitely lower your risks in case of frauds resulting from identity thefts.

You should go for the credit monitoring scheme that suits your needs. Opting for monthly status reports through email is a viable option. IDTheftDefense recommends the 3-in-1 credit report which includes the three credit bureaus – Equifax, Experian, and TransUnion, as you may not come to know about all the credit problems if your monitoring plan covers only one credit bureau. If you want to protect yourself and your family members from identity theft, then it is essential for you to educate yourself about it by getting all information from the IDTheftDefense site.



Esther

Mike Clover asked:


Credit Score being the doorway to financial health I thought I would give some tips on what to avoid so your credit score is not affected. If your credit score is currently low I guarantee that you are paying too much to your creditors. Any business that is in business for profit is looking for a reason to make money. If a creditor knows your credit scores are low they will charge you for it. The reason is because they can. Here is what to avoid so your creditworthiness is not affected.

Late Payments

This is one credit dink I see all the time. If you are late on a obligation that reports to the credit bureaus I assure you that your score will drop around 75 to 100 points. Timely payments account for 35% of your overall FICO score. This particular factor in your credit score is the biggest factor of all.

Amounted Owed

If you have credit card debt, and the balanced owed vs. the allowed credit limit is more than 30%, your score is affected. The amount owed accounts for 30% of your overall FICO score. You should keep your credit debt well below 30% of the allowed credit limit.

Length of Credit History

Once you are granted some credit the FICO score model looks at how long you have been in good standing with your credit. If you have a good history with your creditors, you can count on it helping your overall credit health. The length of your credit history accounts for 15% of your score.

Mix of Credit

Mix of credit accounts for 10% of your FICO score according to Fair Isaac. So you need credit cards, installment loans, auto loans, department store credit, etc…… The rule of thumb is to have at least 3 to 4 lines of different types of credit to get the best overall score.

New Credit

New credit accounts for 10% of your FICO score. The FICO score model does not like to see you applying for too much credit. Too many hard credit inquiries will affect your credit score. The rule of thumb is around 3 to 4 different types of credit.

Identity Theft & Credit Monitoring

Make sure you are pulling a copy of your free credit report regularly. With the identity theft problem it is recommended to set up some type of credit monitoring with immediate alerts. So if something happens you will know about it quickly.

Co-Signing

Co-signing is a big problem as well. We don’t recommend co-signing for anyone. If a family member or friend does not have the credit to buy, the best thing they can do to get credit established is to get a couple of secured credit cards. This is the fastest way to improved credit health. With a little history, usually 12 months of good payment history the creditors will open the doors of credit.



Richard

Chane Steiner asked:


You can raise your credit scores by taking a close look at your credit reports and creating a plan of action to improve them. It takes time and a continual effort from you to raise your credit scores. There are really now quick-fixes of besides paying down debt and to successfully disputing negative information on your credit report.

One of the most important things you can do is simply pay your bills on time – that should be fairly obvious. Late payments play a major role in driving down your credit scores. You will also want to keep your debt-to-credit-limit (or available credit) ratio as low as possible. Never let it get above 40%. If you don’t have many positive accounts reporting, you may want to open some new accounts to raise your debt-to-available-credit ratio. Try to get an unsecured credit card from your local credit union or a secured card from a legitimate site online. Remember; don’t apply for too many because the inquiries count against your credit score.

Don’t close unused accounts, especially if they are old and reporting positive, because zero balances can help your score. Also, don’t open several new accounts in a short period, especially if your credit history is less than three years old. Too many inquiries in a short period of time can really be hurtful to your credit scores. Apply for credit wisely.

It should be mentioned though, that pulling your own credit does not harm your scores. In fact, many people think it’s wise to use a monthly credit monitoring service online to monitor your progress and make sure there are no unauthorized inquiries or new accounts showing up on your reports.

As mentioned, disputing negative accounts on your credit reports is an excellent way to raise your credit scores. All negative accounts on your credit report should be disputed to make sure they are accurate. If they are not, they must be removed. You don’t have to be dishonest when disputing accounts; the burden of proof is on the credit bureaus and the lenders. If you know that an account is yours, do not dispute it as “not mine”.

It’s the credit bureau’s obligation by law to verify the account and show proof that every little thing they are reporting is 100% accurate. If it’s an old account and the lender no longer has the records to verify an account, guess what? It must be removed. Just remember to always be careful and honest when disputing. Unintended consequences happen quite frequently with credit bureaus. They know how to play the game and they are NOT happy about having to verify your accounts, so be smart about it or you will find yourself with even worse credit.



Rodney

Joshua Mann asked:


If you are making payments on your home and are worried about whether you have mortgage bad credit history, the best thing you can do is to check your credit. Making sure of what your score is will help you to know if you need to work on repairing it or if it is in good shape.

If you have had any late payments, they will probably show on your credit making the score drop. One way to avoid this is by having your payment directly debited from your checking account and have this done directly after payday so you don’t have to worry about the money being there.

These days about every major purchase you will make is financed. From your car to your home practically every single thing you have is owned by a bank, finance company, or mortgage company. So mortgage bad credit history is not as uncommon as you might think.

You can take steps to improve your credit if you have mortgage bad credit history. Try doubling up payments on some of your financed items. This will show that you are making every effort to make sure they are paid on time and will show on your credit. If you have credit cards, try to limit yourself to one and keep a low balance. Charging it to the limit will show you carrying a high balance and credit ratings are not as good for high balances as keeping it at about one-third of your limit.

If you subscribe to a credit monitoring service, you can keep track of your credit far better than just checking it once every 6 months or whenever you think of it. Credit monitoring not only lets you know if your score goes up but if too many people are pulling your credit causing it to go down. This is vital for you if you want to improve your credit.

If you are thinking of refinancing to consolidate all your bills, do some comparison shopping before you start filling out applications. When you apply to a bank or mortgage company, they pull your credit history. This is one of the main causes of mortgage bad credit history. Too many inquiries within a certain time causes your score to drop. However, a consolidation loan can be an excellent way of combining all your payments to a lower interest rate loan and giving you the chance to improve your mortgage bad credit history.

The first step you must take to improve your mortgage bad credit history is to determine what your credit rating is and what steps you are willing to take to change it to a better credit score. If you keep track of your credit, you will not have any surprises and will be in a better position to have good credit rather than bad. If you are willing to put forth the effort, you can be on the road to better credit in no time.



Thelma

dalmatianguy2002 asked:


Ok I have a question about my credit score. It’s currently around 660. I have one open real estate account with around $123,000 left on it (had it for almost 4 years, never a late payment) and my house is for sale. So I plan on having that paid off sometime over the summer. Will this raise my credit score?? I also have 3 credit cards, all with a balance of $0, no late payments, the highest has a limit of $500 and lowest a limit of $500. The other is $1,500 I believe. My score a 691 a month ago, then all the sudden it dropped to 660, which was kind of weird. I have Experian’s triple advantage program, which monitors it daily. I called them and the lady said my debt ratio could be causing that. She said that by paying off my house loan in full it should raise it by quite a bit. Anyone have a guess as to what it could raise to once it is paid off in full? Oh, and I have no negative information like defaults, bankruptcies, late payments, ect,. Best guess anyone??
I meant the highest has a limit of $5,000 and the lowest $500, sorry for the confusion!

Rodney

Elena Laramie asked:


By regularly checking your credit report, you’re doing a great job of managing your credit. It’s a good way to stay on top of things. And you know what else is smart? Being aware of the most common credit pitfalls.

There are four credit “dangers” you should always have on your radar. If you’re not careful, these situations can sneak up on you and lead to a credit disaster. So let’s be sure you know how to avoid them…

Unpaid bills

This may seem like a no-brainer, but you’d be surprised at how many people don’t realize that unpaid bills can hurt their credit. If you skip payments on anything from your mortgage or car loanto a $25 credit card paymentyour credit score can drop. Even late payments can negatively affect your score.

The biggest culprit for many people is an unpaid medical bill. It’s easy to see how it happens: you assume your insurance company is taking care of the bills and they don’t get paid. It’s usually a simple mix-up of what your insurance company does and does not cover.

Unfortunately, this confusion can result in a collections record on your credit report (and those stay on your report for at least seven years). So it’s important to fully understand your insurance coverage and make sure your medical bills are paid. And if a collections account appears on your credit report due to a mistake, be sure to work with the parties involved to get the issue resolved.

Identity theft

When someone steals your identity and goes crazy with your creditit can mean chaos for your credit report. It is a real problem these days. But if you know how to protect your identity, you have a better chance of protecting your credit.

Are you taking steps to cut down on your risk? You should start with the following: shred everything with your name on it before you throw it away…only use your credit card on websites you know are safe…don’t carry your Social Security card in your wallet…and consider paying your bills online or with automatic payment (less mail for thieves to get their hands on).

You should also consider signing up for credit monitoring. It’s an easy way to keep a close eye on any changes to your credit.

Divorce

After the hassles of going through a divorce, the last thing you need is to have your credit suffer because your ex-spouse is racking up credit card bills or missing payments. So get your credit report and make sure all joint and co-signed accounts from your marriage are closed or refinanced as soon as you can.

Judgments

The verdict is in: most judgments such as small claims, civil suits and tax liens are guilty of tainting your credit standing. These can remain on your credit report for seven years or longer. And that can make it harder for you to get the best interest rates on loans.

You see, credit doesn’t have to be scary. The more you know, the easier it is to stop things from sneaking up on you.



Arthur

William Brooks asked:


You may be extended the credit or loan, but at higher interest rates. There are ways to gain back the credit scores you deserve. The first thing you must do is to obtain all three of your credit reports as soon as possible.

Don’t try to get by with only one. You must get all three because each one can contain different data. When you get them, look them over completely with a fine-tooth comb.

Note any mistakes and report them to the bureau right away. Even the slightest mistake on your reports can cause you to have a lower score. Make sure all three reports have the same information as the others.

Discrepancies can also hurt your chances of receiving a good score from the credit monitoring agencies. Sometimes the credit card companies don’t report to all three bureaus, so check and be sure all three have the same facts and figures.

Take a look at the debt that is owed to your creditors. Negotiate with the companies over the debt and get the debt paid off if possible. If they report that the debt owed to them has been paid in full, your credit reports will reflect that positive action and your credit score will be raised.

If it’s not possible to pay them all off, then pay as much as you can on a regular basis. Make sure you’re paying all of your bills on time. Late payments, especially recent ones, get on your reports and are factored into your credit scores as a detriment.

Don’t apply for any more debt until you have all of your old debt paid off. The credit reports will reflect all of the debt that you owe, so the more debt that it shows, the lower your score will be until it’s paid off.

Pay off all your old debt first and make sure that they’re reported to the credit monitoring agencies. Even when you pay off your credit cards, keep the accounts open at least on some of them.

Closing all of the accounts reflects negatively on your score. Even if you don’t intend on using those accounts again, it still looks better that the account is open and there’s zero balance on it.

It also looks better if you charge very small amounts and then pay it off completely each month on time. It shows your ability to repay your debt. Don’t pay another company to take care of your credit repair unless you absolutely know that they come highly recommended.

It’s best you do it yourself. Most of the companies that claim they can repair your credit instantly are scams that will take your money and do nothing for your credit. Work hard to keep it clean and pay off all your bills on time. You can bring a negative score to a more positive one with a little diligence in budgeting for your bills and maintaining a timely schedule.



Jamie