Month: April 2016

Everything You Need to Know to Repair Your Own Credit!

sgI am going to teach you how to fix your credit. I am not going to share everything that I know with you about credit scoring models or algorithms but I am going to share the process with you. I am doing this because I want you to know what you are doing when you go about fixing your credit. If you have bad credit and are a DIY type of person this article is for you. I am going to cover everything in this article from A to Z.

The first thing that you need to do is review your credit for inconsistencies. A full 79% of credit reports have one error or another. Cases of mistaken or stolen identity, same or similar names reporting on the wrong report, incorrect amounts, duplicate accounts, and many other forms of errors being reported on credit profiles abound. Go over your credit report very carefully looking for inconsistencies such as those listed above.

Once you have identified the errors that you want to correct it is time to move on to the next step. You will want to dispute those items with the three major credit bureaus. Write a letter you each of the three credit bureaus explaining to them what you believe the error is and request that they delete the item being reported in error from your credit report. Proper formatting is an important ingredient in order to ensure that your dispute is handled properly. The credit bureaus are going to want to make sure you are who you say you are. For that reason you must always submit your dispute letters with a copy of your driver’s license and a bill with your address on it (such as a utility bill). If you have recently moved they may want to see additional verification so include a pay-stub, social security card, or W2 form.

There is no guarantee that disputing an item with bring about a removal of that item from your credit profile. If the item is genuinely being reported in error there is a high likelihood that it will be deleted. Creditors have 30 days to validate an account that has been disputed otherwise it is automatically deleted. If an item is validated but you are certain that it is being reported in error you can challenge the validation. That process begins with first requesting the documentation from the credit bureaus that the creditor used to validate the account. A good example would be if an amount is being reported incorrectly. Such as if you paid off an account but it is still reflecting an amount owed. In that case, obtain dated proof of your release from the debt obligation to compare to the documentation used for validation, which may show that the validation is dated.

If you are unable to have an item deleted through the dispute process there is a good chance the collection agency or creditor may be more pliable and willing to negotiate after an item has been disputed, validation challenged, or is currently in dispute. As a last resort you may want to attempt to negotiate a settlement with the creditor; this is only if you are unable to have the item removed through any other means. However, there are a few ground rules here that you need to take into consideration. Again, if you are certain that the item is being reported incorrectly or is not yours all together; do not acknowledge the debt as being yours.

The first thing that you should ask for when the creditor answers the phone is for the agent to come back on an unrecorded line. You have the right to speak on an unrecorded line and generally the agent will be happy to oblige. He or she will put you on a brief hold and come back on a line that is not being recorded. Once they are back on the line with you tell them that you are calling about account # (fill in account number). If you do acknowledge ownership of the debt, that could restart the statute of limitations back to 0 days since last date of activity. It is important not to make that acknowledgement in the event that you are unable to reach an agreement. It is not uncommon to get the settlement down to around 40% or 40 cents on the dollar. Collections and profit & loss statements come off on their own seven years from last activity while items discharged in bankruptcy come off in 10 years.

Cleaning bad credit from your credit profile is the first step in establishing repairing your credit. The next step is to re-establish credit. Sometimes when you make a lot of changes to your credit profile in a short period of time you may see a dip in your credit score in the first month after. The reason for this is because while you are deleting derogatory items you are also deleting transaction history. This is normal and it will rebound in the subsequent month so long as you have established some new trade-lines (credit account).

Those with perfect credit have multiple seasoned trade-lines varying in type. Usually a couple of revolving account, an installment loan or two, and an amortized loan such as a mortgage. The more seasoned a trade-line is the more weighted it will be on your credit report. If you have the option of having a friend or relative add you as an authorized user on a seasoned trade-line that will accelerate the time-frame in which you are able to increase your credit score. However, with a clean slate you should still be able to significantly increase your score over the next couple of months.

Open a couple of credit card accounts to start with. You will want to limit your inquiries to no more than 3 in any 6 month period. For that reason it is a good idea, if you have cash on hand, to start out with secured credit cards. Secured cards come with a guaranteed approval and do not require a credit pull so you will be able to limit the inquiries on your account. Another great option is Aarons Sales & Lease; they are the only rent to own company that I am aware of that reports to all 3 major credit bureaus. When establishing new credit try to limit your new credit inquiries as much as possible.

After establishing a couple of new credit card accounts make sure that they are open and active. You will want to use the cards to build up some positive transaction history. At the same time you will have to use them carefully to maximize your credit utilization. Never exceed 30 percent of the available balance as that is the sweet spot in where your account is open and active while still maintaining a large percentage of available credit. It’s a good idea to make a small purchase or two once a month and then pay your bill after you receive it in the mail to ensure that it posted and the activity on the account will be reflected on your credit profile.

There is a lot more that goes into it than the information that I have provided here. There are specific calculations that we can do based on credit scoring models that allow us estimate scores at particular intervals. Though, in order to remain compliant I never quote time-frames or make guarantees because there are always variables that could disrupt the work that we are doing. The information provided here is more than enough for you to go out and fix your own credit. There is nothing that we can do in that regard that you cannot do yourself. You can take the steps outlined in this article and fix your credit.

If you do not have the time to put the work into this process or would rather just leave it to the professionals we are here to help. Northern Finance Group employs highly trained credit repair professionals and we are willing to work with you in every step of the way. Our rates are reasonable for the high level of service that we provide and we can ensure that your credit reach the heights that you are striving for. If you have been turned down for credit and need to get your credit repaired as quickly as possible please give us a call for a free consultation.

Bad Credit Buyers Expect to Pay Higher Interest Rates

dssaThe first step toward improving your borrowing power is to know your rights and responsibilities. Nobody but you is usually to blame for your bad credit rating, so start out by assuming responsibility for your bad financial choices. Acknowledge that you’ve made some mistakes, and start working to improve those mistakes by addressing the problem head-on.

Know your credit score.

Get a FREE copy of your credit report and know the reality of what is showing up on your credit for collections, for late payments or for any other reason. If you have a good credit report showing up, know about it, point that out to your lender and remind the lender as you’re going through the process that you’ve been responsible on those areas.

Deal with bad credit reporting.

If some of your financial information is missing or miss-reported, correct that. Write letters to the reporting agency explaining or asking for bad information to be removed from your credit report. 30 days after disputing a report, if it isn’t confirmed, it will be deleted. Take advantage of that option to have bad reports deleted from your documents.

Pay off low balance debts.

If it’s a low balance, pay it off, and ask that it be removed from your report. Most companies will allow paid off debts to be removed from your credit report if they no longer have you as a liability on their records.

Request good reports.

If you’ve paid on time, and you have some good reports that aren’t on your credit report, this is the time to request those reports be placed on your financial profile. Do the work and ask your creditors to make those good reports too.

Keep track of changes on your financial documents.

By keeping track of your credit report and any changes in your credit score, you’ll be better able to prevent the possibility of identity theft, or at least identifying the source and cause of any identity theft problems that may arise on your accounts. This may come in handy if anyone ever does take your debit card, or steal your identity.

Maintaining a legal shield of some kind to protect yourself from identity theft is always a good idea, but in lieu of a specific paid program, keeping close track on your own financial documentation is the best option.

What Are The Basic Guidelines For Any Credit Repair Service? How Does It Work?

cjThere are a couple of ways a credit repair organization can help you enhance your credit score. Some of these organizations just help you get false data evacuated. They will have you send them your credit report and let them know what data you accept to be inaccurate. At that point they will compose letters to the lenders or credit departments in an attempt to have the questionable items removed. This can take a while due to the validation process. Since a lender did not bring out an advance with a gathering org, they can’t demonstrate it is owed them. Much of the time you sign an agreement with a repair org and they charge you an expense to compose these letters, and arrangement with the creditors and credit reporting agencies. As per “The Credit Repair Organizations Act,” the credit counselling organizations can’t charge you until some type of work has been done.This could be a setup of an account or a review of your credit profile. They should likewise provide you a duplicate of the “Buyer Credit File Rights under State and Federal Law,” before you sign a contract with them. Verify you are dealing with a credit repair organization that is true blue and read the contract.

No Upfront Payment

Credit repair companies may not approach you for cash before providing some sort of service first. Any credit counselling service that attempts to collect payment from you before you’re a review of your situation is in direct violation of the law. Never pay for credit repair service until you have consulted with them and been advised of your options. On the off chance that a con artist tries to swindle you out of cash by requesting payment before providing some type of service, report him to the Federal Trade Commission.

Shopper’s Bill of Rights

Credit repair companies must provide you a rundown of your rights in regards to credit repair, including data about what you can accomplish on your own. Case in point, a honest credit repair company must let you know that you have a right to acquire a free credit report once a year from each of the three significant credit authorities and that you are qualified for an extra free report on the off chance that you are turned down for credit.

Evacuation of Information Rules

No credit counselling company can expel negative data from your record as a consumer if the data is correct. Case in point, in the event that you petitioned for Chapter 7 bankruptcy in the past seven years, you can’t expel that from your financial record. According to, credit repair services in NJ and other areas are not permitted to claim they can remove all negative data from your history paying little heed to its exactness or to what extent prior the negative data was accounted for.

Cautioning

The Federal Trade Commission says that on the off chance that you submit unlawful movement while endeavoring to repair your credit, you can be brought up on government charges regardless of the fact that you conferred the action on the recommendation of a credit counselling company. Along these lines, stay far from companies that encourage you to question each negative thing on your record of loan repayment paying little mind to its precision or offer to get you another Social Security number or other ID with the end goal of misrepresenting your financial record.

How Credit Counseling Can Help Your Financial Challenges

sDebt is arguably the greatest plague in our society today, it has a way of creeping up on us if we let it. It’s crucial to keep debt manageable and reasonable in order not to incur painfully large interest charges or struggle to make our payments. Even for those who manage debt well, unexpected life changes can result in difficulty making ends meet.

When debt seems to overcome our lives the first course of action is to take a look at the budget. Finding unnecessary expenses to cut back on can help us pay down debts and keep monthly bills current if we aren’t in too bad of a situation. But what happens when we can’t solve our debt problems with budgeting?

Sometimes we need outside professional help. It’s hard to admit when you’re having money troubles and to go to someone else, but if you don’t gain control over your debts, your credit rating will suffer and you might live the rest of your working life trying to get out. So it is important to take control and make a change before it’s too late.

Some debtors turn to consolidating their debt as an answer to debt problems. Others may even consider bankruptcy. What they do is transfer high-interest debts to a lower interest credit card, or they put up the equity in their homes to get the money to pay them off. While these options can provide lower payments, they are not without drawbacks. Closing numerous accounts and putting all of your debt into one account can negatively affect your ratio of debt to available credit, lowering your credit score. And if you use your home equity to secure the money needed to pay off debt, you’re putting your home at an unnecessary risk.

The most popular option for those with debt problems is credit counseling. Credit counseling agencies offer help with budgeting, and in some cases, they will set you up with a debt management plan. A debt management plan involves negotiation with creditors to obtain lower interest rates and lower payments. The debtor makes one monthly payment to the credit counseling agency, and the agent forwards payments to each creditor.

A debt management plan can help you get out of debt faster, but it can also impact your credit. A note is added to your credit report stating that you are undergoing credit counseling. This means that you can’t get new credit. However, the notation is removed once you’ve paid off your debts.

An overabundance of debt can wreak havoc on our finances and our credit scores. It can also be the cause of undue stress. By seeking help at the first sign of trouble, we can often prevent our debts from spiraling out of control.

Tackling Bad Credit With The Fair Credit Reporting Act

cfWhat is Bad Credit?

Bad credit is when your credit report score or the ‘FICO report’ score is below par. If you have bad credit, you will have to put up with high interest rates, and may not be eligible for personal loans and mortgages. In addition to this, you may have to face penalties as well.

What is the Fair Credit Reporting Act?

It is a federal act that promotes accurate information and the consumers’ right to keep their information private. It is primarily concerned with consumer reporting agencies such as financial bureaus.

How can this act benefit people with a bad credit score?

Every American citizen is entitled to certain rights under this act.
First of all, you have the right to know if any information in your credit report has been used against you. So, if your loan or mortgage application is rejected because of a low credit score, you will be alerted to take appropriate action.

Secondly, you have the right to know what is in your report. This can help you in two ways. First, you would be able to spot the cause behind your low credit score and work on those areas. If you have too much current debt, too many accounts or pending debts, you can focus on those issues. Second, you will also have a chance to dispute a creditor or a financial bureau regarding any false errors on your list.

A significant percentage (20%) of credit reports is said to be faulty. So, there is a good chance your score is as less as it is because of inaccurate reporting or false charges.

Credit Restoration services are your best bet when you are trying to get your credit score up. The experts of such companies have the competency to spot every error on your report and dispute with a creditor or one of the three financial bureaus, which are:

Equifax

Experian

TransUnion

The reason you should take professional help is because they fully understand the extent of your rights. For example, you may not be able to distinguish an outdated piece of information on your report, which as per the act, you have the right to get removed.

A reputed credit services company handles such cases on a daily basis so they know how to dispute with creditors and bureaus. If the entries on the credit report prove to be inaccurate, the credit repair company will get them removed.