Credit Repair - There are many companies out there that claim to be able to repair your credit. They will charge you for things you can do on your own. Heres how to do it on your own. You must first get a copy of your credit report from all 3 credit bureaus (TransUnion, Equi., Experian).
Many people have errors on their credit report. These must be corrected, and the results could improve your credit score. To remove these items, you must dispute them with the 3 credit bureaus individually. The credit bureau is then required to contact the erroneous reporter and verify the information. If the information is not verified with 30 days, it must be removed (DELETED) from your credit file completely.
If you get a copy of your credit report at [url]www.AnnualCreditReport.com[/url] you can actually challenge any incorrect items electronically over the internet.
There are also credit repair companies that will fix your credit up for a fee. There are many of these types of companies out there and if you decide to use one of them you should really try to do your homework and research them before paying them a fee for their services. Ask for referrals, ask your mortgage broker which ones he/she uses on a regular basis and how their results are, and check to see how long they have been in business to make sure they are not just going to take your money and run. Many consumers can be helped by credit repair companies and can end up qualifying for a loan that they may not have been able to qualify for before. Therefore the small amount of money spent on credit repair can end up saving you tens of thousands of dollars over the course of your loan.
Through a refinance you can actually improve your credit as well. By paying down credit balances, closing collection accounts and lowering the amount of credite extended to you, your scores will gradually improve.
Prior to repairing your credit you should speak with a mortgage professional. Often things you think will help will actually hurt.
Make sure you keep tabs on your credit profile by checking your credit report for errors and inaccuracies at least once per year. You are able to access your credit report from all three credit repositories, Equi., Experian, and TransUnion, online one time per year for free. By checking your credit at least 1 time per year this is going to help you to prevent or correct any inaccuracies that may be reporting to your credit profile. Preventative maintenance is the best form of credit repair there is available, along with learning the basics of credit and credit scoring. There are many things that can be done by you, the consumer, to help improve and maintain a high credit rating and credit score. Here is a short list of some simple tips that will help you maintain a good credit record and credit score:
* Pay all of your bills on time
* Never max. out your credit cards
* Try to keep your credit card balances under 50% of what your maximum credit limits are
* Keep your credit applications to a minimum and do not apply for credit all year round
* Do not close your credit card accounts after you have paid them off. The length of time your credit accounts are open will help improve your credit rating
* Check your credit report for inaccuracies with all 3 bureaus at least once per year
The best form of credit repair is understanding the basics of credit and credit scoring, and this following this information will help your credit profile much more than alternative types of credit repair. Do not wait until you are getting ready to buy a new car or a new house to check your credit reports. Stay on top of your credit profile to take care of problems, or errors, when they happen instead of when you need to get approved for financing. 29% of all credit reports contain serious errors. That is almost one out of every three consumers that are affected by serious errors that can greatly affect they type of financing you are being approved for. Approximately 70% of all credit reports have at least minor errors or inaccuracies of some kind. Those are some pretty unbelievable stats. Especially when you consider how important of a role credit plays in your life now-a-days. Employers check your credit report when you are applying for a job, insurance companies check your credit when you are applying for a new policy, credit card companies, auto companies, banks, mortgage companies, and the list goes on and on. Please consult a mortgage professional to find out more about tips to improve your credit, preventative maintenance on your credit, and about credit repair to make sure you qualify for the financing terms you deserve.
Credit Repair Tactics - Some credit bureaus have a "rapid rescoring" system available, which corrects inaccurate information on your credit report. Your score is recalculated within a few days, rather than waiting over 30 days like normal. This can allow you to close on your loan before your rate lock expires.
Each consumer should obtain a copy of their credit report at least once per year and verify the credit report for inaccuracies. This is the best credit repair tactic available. By keeping tabs on your credit report you can take care of and errors or inaccuracies upfront before they become a problem and they cause your credit score to decrease.
The three national credit reporting bureaus - Equi., TransUnion, and Experian - are required to provide you with a free copy of your credit report, by your request, once every 12 months.
If you come across inaccurate information regarding any accounts, a good credit repair tactic would be to write each bureau a letter stating that there is errornous information contained in your credit report. Then state that you would like to dispute that item(s) and always be sure to provide documentation supporting your claim.
If you carry credit cards that have balances over 50 per cent of the maximum limit you should ask the credit card company to raise your limits. When the balances are less than 50 per cent of the limit your score should improve.
Actually 30%, from what I know, is the magic balance for credit improvement...
Here is the killer...Banks like Capital One, for example, only put the high credit used on the bureau so if you have a 5K limit and never put more then 1K on it and maintain 700 on it, it appears that you have a high use of credit on file instead of a very low one...You almost need to max them out one month with all your bills and pay it off the next month to get it in line...Banks like Cap One are not required to report the high limit although there are forces at work trying to change that...Many people have more than one Cap One card, manipulating program over a few month period can really change a credit score...
When an account is past due, often the creditor will contract with a collection company to collect that account. Sometimes the original creditor and the collection company will both continue to report payments as being late. Because this account is being reported twice, this is a violation of the Fair Credit Reporting Act. If this happens, notify the creditor in writing and demand that they remove one of these immediately.
One credit repair tactic is to call your credit card companies and ask that they raise your credit limits. This helps get your balances down to a better level, which helps your credit scores. Most companies will only raise your limit once every 6 months. They are more likely to raise your limit if they believe you may close your account in favor of another account.
Talk to your mortgage company about utilizing credit improvement simulations to get a better idea of what would happen if you took certain actions. These tools can be incredibly useful in minimizing the expense and maximizing the effectiveness of credit repair tactics, by scientifically analyzing your situation and approximating the positive or negative impact of a variety of predefined scenarios (for example, taking $1000 and paying down the balances on all your credit cards equally, or opening a new card with a $10,000 limit and consolidating all of your other balances onto one card, or removing an incorrect medical collection account from the report entirely, etc) You can also see what would happen to your credit score if you missed a mortgage payment, an eye-opening experience believe us!
Many credit reports include errors. Be sure to look over the details of your report, as most errors can be cleared up with relative ease within a 30 day period, or quicker, and can sometimes have a significant impact on your score.
The four main things that affect your credit score are:
1) Payment History- Whether or not you make your payments on time.
2) Account Balances- On revolving accounts should be kept under 50% of the available credit limit. Under 30% is actually preferred.
3) Amount of Accounts Open- It is best to have about 5 accounts open at any given time. This number can be higher if it includes student loans, but it is always best not to have multiple credit cards open, especially if they carry balances.
4) Length of Credit History
Are Credit Counseling and Credit Repair Different? - You have probably heard about all of the bad press that credit counseling agencies have received over the past couple years- and rightfully so. What you have probably not heard much about are credit repair companies. While they sound similar in name, there are many important distinctions between the two. Not only in what they do, but also how they will impact your credit in general.
The biggest difference between credit repair, and credit counseling is that credit repair companies dispute the derogatory information on your credit report, while the counseling companies make plans with your creditors for repayment.
Credit counseling consolidates your debts into one debt so that you can make one monthly payment, which generally is lower than how much money you are currently paying on your debts. Consumer Credit Counseling companies supposedly negotiate lower interest rates, lower payoffs, and lower monthly payments from your creditors in return for a small fee themselves that they usually work into your total monthly payment. Consumer credit counseling agencies are supposed to be looking out for your best interest and non-profit companies however they do not always help consumers as much as they state they are helping. Many lenders will not lend to someone in Consumer Credit counseling and other lenders may require that you first quit the consumer credit counseling plan in order to obtain financing. Credit counseling is viewed by many lenders the equivalent of bankruptcy and treat consumers in the counseling service with the same underwriting guidelines as those who have had a Bankruptcy.
Credit repair companies will typically dispute the derogatory items listed on your credit report in an effort to get the negative items deleted entirely. In some cases challenging these types of information has actually improved some people's credit scores by over 100 points!
Easy ways to improve your credit - Make sure you get a copy of your credit report. You might be surprised to find out whats on there. Dispute any inaccuracies, and this alone sometimes improves your credit score.
Check to make sure there are no social security discrepancies. If you review your credit report you may sometimes find accounts/tradelines that do not belong to you. The discrepancies are common for those with very common names.
As well as making sure there are no negatives on credit report, make sure all good current credit is being reported properly for maximum impact on rating.
If you have the same name as a member of your family, check to make sure none of their accounts are showing up on your report.
Managing the credit limit on credit cards is critical to your score. The agencies recommend never using over 50% of the line limit and pay off the card each month on time.
If you do have credit cards that are maxed out and you have a balance that is at or close to your maximum credit limit an easy way to try and help improve your credit score is to call your credit card company and ask for a credit limit increase. If you are able to get a credit limit increase this will show a better balance to maximum limit ratio and thus will help to improve your credit card. Whatever you do though, do not go out and charge your credit cards up and utilize this credit limit increase.
When correcting errors on your credit report with credit bureaus, be sure to contact all three credit repositories. Correcting with only one credit bureau does not make the erroneous entries disappear on you credit report.
If there are collection accounts on your credit then it is very important to resolving them. If a collection account has been hanging over you for a time there are ways to pay it off to everyone's satisfaction without having to pay the entire balance. This involves negotiation and paper trails. Contact Home Jones right away to learn more on how to do this.
Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies.
Make sure any derogatory items are not reported more than once, or duplicated.
The three credit bureaus are now required by law to issue one free credit report annually to consumers. It is definitely a good idea to take advantage of this and review your credit no less than once a year.
The only site you should use to get your free credit report is the one run by the Federal Government: annualcreditreport.com
Why is my credit bad? - Your credit maybe considered bad and causing a low score for a number of reasons. While there are numerous reasons for bad credit some of the more common ones are as follows. You have numerous credit cards that are maxed out or close to the credit limit, you have unpaid judgments or collection accounts, you have 30 day late payments showing on your payment history. All of these examples can cause severe drops in your credit score.
Here is a general guidline which outlines the five major types of information used to calculate a FICO score. Each type of information counts as a percentage of a total FICO score:
- 35% Payment History
- 30% Amounts Owed
- 15% Length of Credit History
- 10% New Credit
- 10% Types of credit
Watch on your credit report for companies that are illegally renewing the chargeoff date every month in order for the account to never gain history. These companies you should call and address this immediately.
To answer questions concerning your credit, how to improve your credit, and any other concerns - contact [name] at 415-617-5448. [name] can help you understand this very important aspect of obtaining the best mortgage for your situation.
You should frequently check your credit report at least twice a year to know what your credit profile looks like. Sometimes erroneous items appear on credit that you may not know about and when it comes time to utilize your credit it can affect the rate you will get. Depending on the state you live in, you are allowed at least one free credit report per year from each of the three major credit bureaus Experian, Equi. and Transunion.
If you have old collections on your credit report, paying them off now can actually hurt your credit. Credit Agencies look at the age of a delinquent item: if you pay it off the "date of last activity" becomes recent instead of old. There are many reputable credit repair agencies or credit counselors that can help guide you in restoring your credit.
Paying down your credit card balances to around 30% will help your score. If you can, try to keep the balance at that level at all times. If you need to raise your score quickly, and don't have the money to pay down your balances, you may request that your creditors increase your credit limit. This will in turn lower your balance in comparison to the limit.
Only use this technique if you are responsible with your credit. Once your limit is increased, it may be tempting to go on a shopping spree. Know that if you do this, you will be in a much worse situation than when you started. Not only will you have more debt, but you will increase your ratio of balance to limit.
If you do decide to pay off some of your credit cards, be sure to leave the cards open. The credit bureaus look favorably upon accounts that have been open for a substantial period of time, especially if they are showing a zero balance.
There are several ways to increase your credit. However the fundamental principle is the bills must be paid on time. This doesn't mean by the due date. For the sake of your credit a payment must NEVER be more then 30 days late. If you are acquiring 30 day lates on your credit then your credit standing will deteriorate quickly. Judgments also hurt your credit even if you pay them.
Remember that a credit score amounts to a prediction of how likely it will be that you go 60 days late or more on your mortgage in the next two years. One thing that will really lower this score is if you carry high balances on revolving debt and then start making a few of the payments late. This is the pattern of a consumer who is close to getting in trouble with debt.
Things that may go into a collection or judgment that will hurt you credit include unpaid medical payments, unpaid utility payments, and unpaid cell phones or cable payments.
It is also important to note that a credit score is a snapshot. Although it shows your payment history, length of credit, etc., having inaccurate (negative) information removed from your credit bureau report will immediately reflect an increase in your score.
Maintaining high balances on your credit cards and other revolving debt negatively impacts your credit score. Paying down credit cards balances below the 70%, 50%, and 30% thresholds is a quick way to boost your credit score.
Your credit can be bad for a variety of reasons:
High Account Balances
To minimize negative on your factors you will need to pay down balances, make payments on time, dispute incorrect information, and let the passing of time lessen the impact of past bad credit.
If your credit score is low because of a high balance on a credit card, transfer some of the balance to another card. Try not to open a new card because to do this can also reduce your score.
One area people overlook that can negatively impact their credit report is failing to honor mobile phone contracts. Cell phone companies give away free phones to customers who sign on with their services for a specified period of time, usually one to two years. Terminating subscription to the phone service before the expiration and failing to reimburse the phone carrier for the cost of the free phone is considered breaking the contract. Cell phone companies would then report to the credit bureaus and cause a blemish on the credit history. Such blemishes are not serious, but they nonetheless lower credit scores.
Credit scores generally range from about 350 to 850.
- 800+ = great credit
- 700-799 = good credit
- 600-699 = average credit
- 500-599 = bad credit
- under 500 = hard to get a loan at all
Too many inquires at one time can affect your credit score.
One reason why your credit may be bad is because of erroneous information reported on your credit report. This can happen to anyone and is actually quite common. This is one reason why you need to check your credit report out at least once per every 12 months. By checking you credit report for free you can keep an eye on your credit and make sure that you take care of any erroneous information when it happens, not when you are trying to apply for a loan and it comes as a surprise to everyone. Utilize your one free annual credit report each year to take a look over your credit to make sure everything looks well. There are many reasons as to why credit report errors can happen so make sure that if errors do happen to you that you rectify the situation immediately.