Learn How to Handle Inaccuracies on Your Credit Report

Having a high credit score can make it easier to be approved for loans, rental agreements or even to get a job. If you notice that your credit score has plummeted unexpectedly, you need to take steps to rectify the situation right away. The following guide provides pertinent information you need to know about credit repair.

Many people assume that credit repair refers to fixing poor credit or building initial credit. This isn’t the case, though. Credit repair eludes to repair damage that has been done to your credit through inaccuracies. This can only be repaired by having the inaccuracies removed.

Credit Report

A credit report is a report that is created to show creditors, landlords or even employers your credit status. It can say a lot about you and you want it to be as high as it can possibly be. Having a low score on your credit report can insinuate that you’re irresponsible and untrustworthy. There are times when creditors report inaccurate information to the credit bureaus due to improper filing, paperwork not being filled out properly or simply because someone has a suffix that wasn’t added to their name when it should have been.

Learn more about your credit report.

Remove Credit Report Inaccuracies

Look over your credit report closely. You can get a free copy of your credit report from each of the three credit reporting bureaus each year. You want to check to see if there is any inaccurate information on the report. If there is, annotate the information about it, gather proof to show that it is inaccurate and attempt to contact the company that provided the inaccurate information to have them correct it.

Companies can file amendments to any filings that they make to the credit reporting bureaus if they know that mistakes have been made. They may require you to fill out some paperwork, but it will be well worth it if you can get the inaccuracy off of your record.

Click here to learn more about removing inaccuracies from your credit report.

Credit Repair Scams

It’s important to know that there are times when companies won’t take the time to correct inaccuracies. When this happens, you can hire a credit repair company to help you. It’s important to avoid credit repair scams , be sure that you work with a well-known, trustworthy company. Do research on them before providing any of your personal information. There are scam companies that will take your personal information and ruin your credit even worse than it already is if you aren’t careful.

Conclusion

It’ll take time before any inaccuracy is erased. It’s best to check your credit score on one of the free online credit score checkers every few weeks to see if the inaccuracy has been removed. If you go a month or more without hearing anything from the company or the credit bureaus when you try to rectify the situation on your own, take the next step and hire professional credit repair agents to tackle the problem for you. Once the credit repair company gets involved, it shouldn’t take long for the problem to be fixed.

References:

How Does Divorce Affect Credit Scores and What Can You Do About It?

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Marriage is more than a bonding of two hearts. It’s also a union of finances and financial responsibility.

However, money is a common source o f marital stress and a leading cause of divorce. In a recent survey, 79 percent of divorcees said money played a role in their divorce.

When a marriage fails or ends, your heart bears the emotional toll, but that’s not all. Your credit score could also take a hit.

While we can’t do much about your heart, we can do something about your finances and credit score.

In this article, we answer the question “how does divorce affect credit” and tell you how to protect your credit.

Keep reading!

When Divorce Marks the Beginning of Financial Trouble

When calculating your credit score, credit bureaus don’t factor in your marital status. As such, divorce doesn’t directly affect your credit.

It’s the inevitable post-divorce financial troubles that’ll give your credit score a beating.

Let’s explore some of these potential situations.

Late/Missed Bills

It’s common for couples to shares financial bills in a marriage. Maybe you pay the rent in turns or make a 50/50 contribution every month.

Regardless of your specific situation, a divorce can be the end of your shared financial responsibility. One party could, for revenge or whatever reason, fail to honor their end of the deal.

If you don’t have the financial muscle to settle the bills alone and on time, your credit standing will be in jeopardy.

Typically, rent and other monthly utility payments don’t appear on your credit. But if they remain unpaid for a couple of months, the service providers could send your accounts to debt collectors.

Collections accounts bearing your name indicate a poor payment history. And, with payment history accounting for up to 35 percent of your credit score, expect a big drop.

Joint Marital Debt

In marriage, especially when it comes to money matters, unity is strength.

When you and your partner come together financially, you can get approved for a joint credit card with attractive interest rates. Or you can secure a joint mortgage and buy a bigger home.

In the event of a divorce, though, the joint debt could come to haunt your credit.

Even though a divorce nullifies your marriage, it doesn’t terminate any joint contracts or agreements you had with a financial institution. Sure, a family court can rule that one party is responsible for the joint debt, but that doesn’t mean you’re out of the woods. If your partner slacks on payments or lets the debt go into default, the credit score of everyone listed on the joint account will tank.

Divorce and Bankruptcy

Divorce is a common reason for individual bankruptcy filings, and it’s easy to see why.

Facing unexpected financial pressure arising from credit card or marital debt, a divorcing couple can decide to individually or jointly seek bankruptcy protection. Depending on the bankruptcy you go for, your debt could be wiped out or you could get more time to settle it.

A big drawback of filing for bankruptcy is it can stay on your credit report for up to 10 years. It will also seriously hurt your credit score.

What You Can Do to Protect Your Credit

After a divorce, life moves on. You still have to stay on top of your financial obligations.

It’s in your best interest to protect your credit standing before and after a divorce. Here is how to do it.

Adjust Your Lifestyle Accordingly

With a combined income, a couple can comfortably afford the finer things in life. A bigger house, frequent vacations, private education for the kids…you name it.

But when a divorce happens, ex-couples face the prospect of living with a reduced income.

Don’t make the mistake of continuing to live a life your individual income cannot sustain.

If your ex-partner moved out of your home, for instance, you might be tempted to keep it, but will your finances allow? Will you afford to settle the mortgage in case your ex stops paying up?

If not, it’s best to downsize. This may mean moving into an apartment or even moving back with your parents as you fix your finances.

Divorce is often a difficult and costly business. Trying to maintain a lifestyle you cannot afford will not only make the transition more traumatic but also put your credit rating at risk. Anything from late utility bill payments to missed mortgage payments can hurt your score.

Don’t Slack On Payments

On your part, you might not have a problem settling individual bills.

The problem is with the joint debt. Your ex could simply stop paying up what they owe.

To protect your credit, the onus is on you to follow up and make sure the ex stays on top of the payments. If they don’t, both your scores will be affected.

But how do you find out if your ex is paying up?

Obtain the statements of your jointly-held accounts and find out whether they are up to date. If not, remind your ex that they’re late on the payments. In case your ex isn’t cooperating or unable to pay at the moment, you can pay, and then ask your lawyer to seek orders requiring the ex to reimburse you.

Another option is to keep tabs on your credit report.

If your ex has defaulted on joint debt, it’ll show up on our report. Although by this point your score might have already taken a hit, taking the appropriate action will help prevent further deterioration.

Cut Financial Ties with Your (Soon to be) Ex

Often, it’s what you do just before the divorce that will save your credit score the most.

You see, marriages rarely end out of the blue. There will be signs. And when you see these signs, it’s time to start severing financial ties with your spouse.

Keep note, some financial ties are harder to severe than others. For example, it’s easier to remove your name as a cosigner on a rental agreement than it’s to get out of a joint mortgage.

Either way, explore your options and severe all the financial ties you possibly can. After the divorce, there will be fewer financial obligations on your plate.

How Does Divorce Affect Credit? Now You Know!

In today’s economy, having a good credit score can mean the difference between financial freedom and financial hardship.

This is why you need answers the question “how does divorce affect credit” and know what you can do to protect yours. Lucky for you, we have killed the two birds. Now you know the various ways divorce can harm your credit, as well as how to minimize the damage.

If your score has already taken a beating, worry not. Read our credit repair tips to start rebuilding it.

How Can You Protect Your Credit

How Can You Protect Your Credit

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Stock photo of the Business Man with a credit card by rupixen
Photographer: rupixen | Source: Unsplash

A healthy credit score is a huge advantage today. It improves your chances of receiving a loan, purchasing a car, renting an apartment, and even getting a job.

However, maintaining good credit isn’t always easy. It requires living within your means and making smart financial decisions. Failing to do this can cause your score to fall off fast.

Fortunately, there are some easy ways to protect your credit score. The great part is, most of these tactics don’t require much effort. You simply need to stay educated and do a little planning.

To help you out, we’re going over some tips to help you maintain financial security.

Know Your FICO Score

You can’t keep your credit in check if you don’t monitor it. Doing so on a regular basis allows you to take action quickly if it starts to drop. The last thing you want is to realize you could’ve prevented your score from dropping significantly.

Think of your FICO score as hard evidence of your financial management habits. Lenders, car dealerships, apartment complexes, and potential employers look at this score when deciding if it’s safe to do business with you.

According to ValuePenguin, the average FICO score in the U.S. is currently 695. This is considered good credit. It’s not exceptional, but it’s nothing to be ashamed of. Anything between 750 and 800 is great. If your FICO score is above 800, you’re doing everything right. However, if you start dropping below 650, you need to make some changes.

Finding out your FICO score is pretty easy. In fact, many credit cards and banks will include your score on your monthly statement. If you’re having trouble finding yours, you can get it from an authorized FICO score retailer like Experian.

Avoid Identity Theft

Victims of identity theft are vulnerable to having their credit significantly damaged. This is a huge problem in our digital world where hackers can penetrate online security systems and gain access to personal information to make purchases and sign up for credit cards in the victim’s name. This can result in a serious drop to your credit score.

The Bureau of Justice Statistics reports that in 2016, 10% of people over the age of 16 had become the victim of identity theft in the last 12 months. Fortunately, there are a number of things you can do to protect yourself. A few of these include:

  • Don’t access bank or credit card accounts using a public WiFi signal.
  • Shred all documents that contain financial or personal information.
  • Examine your bank and credit card statements each month for strange activity.
  • Don’t provide personal information to anyone you don’t know.
  • Never carry your social security card with you unless you absolutely must.

If you notice unauthorized activity on your debit or credit cards, call your bank immediately. There’s a good chance they can put a stop on the charge. You’ll also need to report any type of identity theft to the Federal Trade Commission.

Control Your Credit Card Debt

Many people make the mistake of allowing their credit card balances to get out of hand. Pretty soon they’re only able to pay the minimum amount owed each month. Doing this will hurt your credit score.

A good rule of thumb is to keep your credit card balances below 30% of your entire credit limit. Even if you plan to pay off your balance soon, charging too much could bring down your score.

If you find yourself overwhelmed by credit card debt, there are a few things you can do. First, if you have a high-interest balance, consider transferring it to a new card that offers a 0% interest rate during an introductory period. Then, work on paying this balance down during that period.

You should also make it a point to pay a little more than the minimum payment each month. Even if it’s just $20, you’re chipping away at your balance. Plus, this looks better than never paying anything other than the required minimum.

Pay Your Bills On Time

One of the easiest ways to protect your credit is to always pay your bills on time. Even a single late payment will bring your score down.

This goes for all your bills, including utilities, car payments, loan debt, and medical bills. It’s not only overdue credit card bills that apply. Your credit score could even be affected by something as minor as an unpaid library card balance.

The best way to avoid missing a bill is to set up automatic payments online. This way the money comes out of your account to pay the bill each month without you having to do anything. If you’re not comfortable doing that, simply set digital reminders to alert you when a bill is due.

Your payment history accounts for a large chunk of your credit score. A minor slip-up may take a while to recover from.

Don’t Apply for Too Many Credit Cards

When you apply for a new credit card, an inquiry is made regarding your credit score. These inquiries cause a temporary drop in your score that could last anywhere from six to 12 months.

If you need to apply for a new card, do a little research first. You can probably find out your likelihood of getting approved. The last thing you want to do is to hurt your credit score and also get denied for a card.

As a rule, try to limit the number of credit cards you have. Yes, having one is a great way to build credit, but having more than one increases the chance of your debt getting out of hand. You may soon see your credit score plummet.

Keep Your Credit Score and Future Under Control

Financial stress is extremely difficult. It can put a strain on your marriage, relationships, and general well-being. Avoid this by protecting your credit and enjoy financial peace of mind.

Use the tips discussed above and keep your credit score healthy. If you notice it start to drop, you’ll need to tighten your budget and start the recovery process right away.

Resources:

https://www.valuepenguin.com/average-credit-score

https://www.bjs.gov/index.cfm?ty=pbdetail&iid=6467

How Often Should You Check Your Credit Score?

How Often Should You Check Your Credit Score?

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In this world of commercial temptation and consumerism, it is very important to maintain a few things. Your credit score is linked to your quality of life – try being unable to get a credit card or a loan for a new car or a holiday. But, do you know everything that helps you to keep your expenses in check and maintain a strong credit score?

With new apps coming out all the time, it has become an obsession to check your credit score, but just how often should you be checking your credit score? Most people are used to the myth that frequently checking your credit score negatively impacts your score.

Here are some easy and simple steps from credit repair answers, which will help you learn when to check your credit score and how it helps you. Following these steps is pretty easy and if you can implement these ideas in your life and practice them, you are sure to benefit in the long run.

What is a Credit Score?

Now, you can never understand what your credit score is if you don't understand what a credit report is. A credit report is simply a report which shows lenders how adept you are at handling borrowed money. They look at how much money you have borrowed, whether you have paid on time and if you have missed any payments. Lenders use this information to evaluate how likely it is that you will pay back the credit.

All kinds of credit related transactions are contained within your individual reports. If you have a loan or a credit card, you will get credit reports and scores, usually updated on a monthly basis. Credit scores are calculated from the information in your credit reports.

Credit Scores vary from person to person. Everyone has their own, individual lifestyle habits. Some are more eager on saving, investing and multiplying, while some, through no fault, may have defaulted on a loan or credit card due to unfortunate life circumstances. Different reports have different rating scales, however it is always a number – with the higher the number, the more likely you are to first obtain credit, and secondly get a better deal.

Managing money is becoming extremely difficult as new waves of consumerism constantly strike our world. Everyone wants the newest smartphone or a brand new car, and often the idea of getting a loan or a credit agreement to fund these is too good to turn down. You can manage your credit reports and score by not borrowing more than you can afford to repay and avoiding short term loans and payday loans.

When should you check your credit score?

Many who are new to the world of credit, are paranoid about its maintenance. You should always keep in mind that checking your credit score on a regular basis is not needed. Your score won’t change during the month, so if you want to keep track, checking it monthly is a good option.

Most apps and credit check companies will tell you when your new report will be ready. Therefore deciding when to check your credit score depends entirely on you. Regular checking of your credit report won’t do it any harm, however multiple applications for credit in a short period of time can.

Identification of day-to-day changes can be very time consuming and frustrating. Instead, you should check for patterns or trends in your reports which you think are affecting your credit score in general. Most credit reports now offer in-depth analysis of your credit agreements – so you can choose to increase payments on a certain loan or credit card to boost your credit rating.

If you are looking at a new loan or credit card you will want to check your credit report before doing so. Most apps and credit reports are now able to tell you which loans and credit cards you are likely to be accepted for before applying; thus avoiding hurting your credit score with a declined application.

Times you will want to check your credit score.

· When you are opening a new credit card.

· When you are applying for a mortgage.

· When you are applying for a loan.

Don’t get obsessed with your credit score

Higher credit scores will obviously relax your nerves. This doesn’t mean you should get obsessed with your credit score. Even when you are in a stable financial position, it is important to track your credit scores and keep yourself updated. But checking your score every day can lead to anxiety and stress. If you are building your credit score, it may be worthwhile to check your score every other month, as opposed to the disappointment of not seeing it rise as fast as you may wish.

Keep checking monthly and manage your finances efficiently and smoothly and you should see your credit score rise.

How do you check your credit score?

There is no fixed time to check your credit score. You can check your credit score anywhere and anytime. You can get these reports from any of your preferred credit reporting agencies such as ClearScore or Experian. These reports are helpful as they tell you when you have any changes coming up, so you know when to login to see any changes that are positive or negative on your credit score.

If you are struggling with debt and are unable to pay, this will affect your credit rating and according to the Government the best option may be a Debt Management plan. Your credit rating will be affected, however once all of your debts have been paid off you will be able to work on building it all over again.

highest credit score possible

Go from Zero to the Highest Credit Score Possible with These 5 Simple Steps

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Did you know that less than 1% of the US population has a perfect credit score? 

Hitting that coveted 850 can seem impossible, especially when your score is already low. But with the right background and motivation, anyone can have the highest credit score possible.

Do you want to own a home in the next year? Are you looking for loans to go back to school or get a new car? Do you have an interest in being in the best financial position possible?

If you answered yes to any of those questions, you need to read this post.

How to Get the Highest Credit Score Possible: 5 Tips

Credit scores are absolutely crucial for any financial decision you want to make, but they also take time to build.

We won’t be able to tell you how to magically improve your credit score overnight. But we can give you some solid information that can put you in a much better place score-wise.

If you’re ready to get that perfect credit score, follow the tips below.

Pay Bills on Time

We know that this is easier said than done, but it’s one of the quickest and most effective ways for you to boost your credit score.

You may not know this, but your payment history is one of the most important things credit card bureaus look at when they determine your credit score. 

Payments that are delinquent even by just a few days can have a negative impact on your credit score. Don’t assume that there’s a grace period before reporting, it’s in your best interest to pay bills as soon as they’re due.

If you’re interested in raising your credit score, your credit card and loan payments need to be a priority. Take time to look at your budget and make sure that you’ll always have money when bills are due.

It can be helpful to set reminders if you have trouble remembering to make payments. Set a reminder a few days before your bills are due so that they’re on your mind, and set an additional reminder for the day they’re due.

Keep Credit Cards Open

When you’ve paid off a credit card you may feel the urge to close your account. This may sound strange, but it’s better for you to keep your accounts open and to not use them than to close them completely.

Your credit history plays an important role in your credit score. A long history of credit gives potential lenders more information and gives them a more comprehensive picture of your creditworthiness.

Unless you have cards with a high annual fee, it’s in your best interest to keep them open. A long credit history could be seen as a sign that you’ve been able to obtain and manage credit for a long period of time.

Have the Right Debt Combination

Sometimes it’s not about the amount of debt you have, but the kind of debt you’re carrying. Having a good mix of debt can be much better for your credit score instead of having a single type of debt.

There are many different kinds of debt you can take on. Some people have mortgages, other people have bank and business loans. You could also have student or vehicle loans or retail credit cards.

People that have a mix of different kinds of credit are seen as less risky than people with one kind of credit. Reduce your debt where you can and look into diversifying it.

Say No to Minimum Payments

We just talked about the importance of paying your bills on time. Making payments at the right time is a good start. But if you really want to put a dent in your debt and improve your credit score, you need to do more than the minimum.

Paying more than you owe each month on your outstanding debt has a variety of benefits. You’ll be reducing your overall debt load and get closer to paying off your debt faster.

You don’t have to make the payments huge. If you could start by adding an extra $10 or $20 dollars a month you’ll be getting closer to your end goal of paying off the debt completely.

If you’re struggling to pay multiple credit cards or loans, it may be a good idea to focus on reducing one area of your debt.

You can make minimum payments on your other debts that make sure that you’re up to date, and focus on paying off chunks of the debt you’re focused on. Once you completely pay off the balance on one, you can do the same for your other debts.

Avoid Spreading and Spending

It isn’t uncommon for some people to try to get ahead of their debt by using more credit cards or loans to get out of debt. Taking out new lines of credit can be a short term solution, but they’ll just add to your long term problem.

We briefly mentioned that your payment history is a big part of determining your credit score. Another big factor is the amount of money you owe in comparison to the amount of credit available.

The amount of credit available is commonly referred to as your open credit utilization rate. It’s always a good idea to not be near or even close to the overall limit on credit cards.

Lenders and creditors pay very close attention to the utilization ratios for potential borrowers. People with a high utilization rate can be seen as someone that’s less likely to pay back what they have borrowed.

If you have a low credit utilization rate, you show potential lenders that you’re a responsible borrower that takes paying down their debt seriously.

Build Your Credit the Right Way

When you have the right knowledge, getting the highest credit score possible is easy. Once you keep up with payments and make building your credit your focus, getting to 850 can be a snap.

Do you want to learn more about the right way to build your credit? We have a lot of articles that can help you reach your financial goals.

Check out our post on common credit problems and the best way to fix them.

increase credit limit

5 Key Tips to Raise Your Credit Limit

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As long as you’re able to keep your spending in check, there are countless reasons why it’s a good idea to work towards a credit line increase. 

If you increase credit limit, you can improve your overall credit score and fund larger — but still responsible — purchases without having to dip into your savings. A higher credit limit is also proof that you’ve been able to make your payments on time and exercise fiscal responsibility. 

Though it’s important to aim to keep the balance on a credit card at 30% or less of your entire credit limit, if you’ve recently started earning more income or can now afford to pay over your minimum each month, it makes sense to increase your limit. 

But how can you make that happen? 

Keep on reading this post to find out. 

1. Wait for It

The best way to increase credit limit options is simply to be patient. 

Especially if you make more than the minimum payments consistently, and if those payments are always on time, your credit card company may increase your limit automatically.  

Usually, credit card companies will review your account about once every six months, and decide if you’ve “earned” an increase in your limit. 

Of course, depending on your current financial situation, you may not be in a position to wait for an automatic increase. Luckily, you still have other options. 

2. Formally Request a Credit Limit Increase

You can put in a credit limit increase request online or over the telephone. 

Usually, you’ll need to provide the representative with a few more details of your financial life. You’ll answer questions about your current income, your payment history, and potentially even how long you’ve had an active account with the company. 

You don’t need to let the representative know exactly what you’re planning to use the money for (in fact, you may not even know.) But you can make your case based on your history with them. 

Be patient and polite — it sounds basic, but it really does go a long way. 

Be aware that asking for an increase may temporarily knock down your credit score. 

3. Get a New Credit Card 

The average American citizen has about 3 different credit cards. 

Sometimes, if you want to get a higher credit limit, one of the best things you can do is to simply apply for a new credit card that offers a larger limit. 

Of course, as with hard pulls when you request an increase on an existing card, applying for a new credit card will also ding your credit score. So, before you go for this option, we suggest looking into your existing cards first. 

However, especially if the card you’re looking into offers better rewards and 0% interest for a year, it may be the right option for you. 

Just avoid falling into the dangerous cycle of credit card churning — that’s a fast track to a lifetime of debt. 

4. Be Smart About the Amount You Request

When you first apply for a credit card increase, we know that it’s especially tempting to ask for more than you probably need. 

You have visions of all the fun — but usually not exactly necessary — purchases that a higher limit would allow you to make. But before you ask for a serious increase, you need to understand why that’s not always the best move. 

Credit card companies often see this as a red flag and are much more likely to deny limit increase requests that are disproportionate to someone’s credit history and income levels. 

These denials hurt your credit score, and they also mean that you’ll be stuck waiting through the next few months with no limit increase at all until you’re able to apply again. 

Now is also the time to study up on any potential limit increase fees that you could incur. 

5. Ensure You Can Make On-Time Payments

When you’re ready to raise credit card limit, one of the most important things to evaluate is whether or not you can truly afford to make higher monthly payments — and still make them on time. 

Now is also the time to evaluate and potentially redesign your personal budget. 

Are there subscription services you don’t really use? Are you spending a large portion of your income on a particular area, like eating out or expensive clothing? 

Look for what you can cut, and prioritize making your monthly credit card payments above all else. 

Even if you miss a single credit card payment, your score — and your ability to be approved for an even bigger limit increase in the future — will take a big hit. Especially if you want to increase your limit to improve your credit score, make sure you don’t accidentally make the situation worse. 

Remember that just because you’ve been approved for a higher credit limit, doesn’t mean you have a free pass to max it out.

Increase Credit Limit with These Tips

We hope that this post has given you a better understanding not only when it comes to how to increase credit limit, but also how to do so without putting yourself at financial risk. 

Looking for additional tips on how to improve your credit score? Need to learn more about the right credit card options for you? Interested in understanding your loan options? 

We’re here to help you with all that and more. 

Keep checking back with our blog to get the financial advice you need to succeed, from understanding what makes a good credit score to how to understand the basics of credit bureaus. 

credit issues

7 Common Credit Issues and What to Do to Fix Them

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You make every payment on time, and you don’t have a large amount of debt.

So, you probably assume you are free of credit issues, so that must mean your credit score is in the excellent range, right? 

You would be surprised how many people follow that same sediment. However, there are some common mistakes that people make that they don’t even realize can affect their credit score. 

In this post, we are going to explore some of the most common credit mistakes and how to solve them.

1. High Credit Card Balance

Credit report companies asses how much credit you are using in relation to your credit limit. The credit used and the credit balance is one of the significant determining factors on your credit report. 

For instance, if your credit card limit is $1000 and you spend $900, then you’re spending 90% of your credit. A good rule of thumb is to keep your credit card balance at least 50%, and if you’re attentive, keep it at 30% and under.

Keeping your credit card balance low helps credit agencies know that you are responsible with your credit. In turn, this may help improve your credit score. 

2. Late on Your Payments

One or two late payments often won’t affect your credit score unless you have a young credit history, or you only have one item on your credit report.

However, if you have multiple missed or late payments, it can affect your credit score for a few years. Late or missed payments often stay on your credit report for 6-7 years.

Once a late payment is on your credit report, the only way to remove it is through time and demonstrating the ability to make payments on time. Over a few years, the late payments will eventually be removed from your credit report.

To ensure you don’t miss a payment again, try automating your bills and making sure your bank account information is up to date. It’s easy to miss a few bills if you aren’t diligent. 

3. Collections on Your Credit Report

Unpaid collections can end up on your credit report, which will impact your credit score. Parking tickets, fines, medical bills, and cell phone bills can all be sent to collections if left unpaid. 

The good news is before you pay your collections, you can speak with a creditor and ask them to remove the collection notice from your credit report after you agree to pay. In many cases, creditors are understanding and will remove the collection notice from your credit report.

Before you make a payment, you want to ensure you get an agreement for the removal of your collection notice in writing from your creditor. Once you’ve paid your collection, be sure to reach out to a creditor to ensure it is removed from your credit report.

If a collection notice is the only reason for your low credit score, you can expect your score to go back up.

4. Closing Old Credit Credit Card Accounts

It seems like common sense to close an account once you’ve finished paying it off or if you decide you no longer need it. However, this is one of the quickest ways to lower your credit score.

Essentially, closing a credit card minimizes the amount of credit you have available. If you have a balance on another account, this will increase your credit utilization.

Credit utilization, your total debt owed compared to the amount of credit you have available, is one of the major factors on your credit score. As mentioned, the best rule of thumb is to keep your credit card balance at 30% or under. 

Before you decide to close your account, you want to assess the pros and cons. In many cases, leaving your card open doesn’t cost anything. Be sure to talk to your issuers to determine if there are any yearly or monthly fees associated with your card.

5. Identity Theft

Identity theft can happen to anyone, so it’s important to know what to do in case it happens to you. It occurs when someone uses your personal information such as your social security number, bank information, or name to commit fraudulent acts.

An identity thief can use your personal information to take out loans, get credit cards, or other factors that can contribute to your debt; this can impact your credit in the long run.

The best ways to combat identity theft is to follow these key tips:

  • Keep an eye on your credit report for any suspicious activity.
  • Don’t give out your social security number if it isn’t necessary or if you’re suspicious.
  • Put a freeze on your account if you suspect suspicious activity.
  • Place a fraud alert on your credit.

6. Opening Retail Cards to Save Money

Most shoppers look for ways to find discounts. Many retailers understand this, so they typically offer store credit cards that offer a percentage off of your entire purchase every time you use your store credit card.

While this may seem like a great deal at first glance, it usually promotes overspending which can lead to even more debt. Lenders take note when one person opens too many credit cards 

Instead of opening up new retail cards, try shopping only during sales or search for coupons online.

7. Never Checking Your Credit Report

You would be surprised how many people never check their credit score. It is more important than ever before to check your credit report, mainly to check for credit inaccuracies or find ways to improve your score.

The main credit reporting bureaus at Experian, TransUnion, and Equifax. Be sure to check them to identify any errors in your credit report. If you do spot an error, you can always dispute it.

If you would like to view your credit score, there are many online credit report websites where you can to get an authorized credit report at no cost.

Say Goodbye to Your Credit Issues

It may seem like learning how to fix your credit issues is a tedious process. But staying informed on the best ways to improve your credit is beneficial in the long run. 

To learn more about credit repair, check out our latest blog.

how to pay off student loans fast

College Debt Hurting Your Credit? Here’s How to Pay off Student Loans Fast

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Currently, in the United States, more than 44 million borrowers owe over $1.5 trillion in student loan debt.

Are you part of this group? If so, you might feel that you’re stuck in a hole and will never find your way out.

If you’ve been wondering how to pay off student loans fast, keep reading. We’ve got lots of tips that can help.

Explained below are some great strategies that will help you pay off your student loan debt and get on with your life as soon as possible.

Why Pay Off Your Student Loans Early?

Some people have questions about whether or not they actually should try and pay their student loans off early. Isn’t it enough to just make the minimum monthly payment?

Technically, yes, you could continue making the minimum monthly payment. It’ll take you a really long time to pay off your loans if you take this approach, though.

There are many other benefits that come with paying off your student loans early, including the following:

  • Improve your credit score
  • Improve your debt-to-income ratio
  • Have more money in your bank account each month

When you pay off your student loans early, you also get to enjoy the peace of mind that comes with having less debt.

This is especially true since student loan debt is virtually inescapable. Even if you declare bankruptcy, you still have to pay back your student loans.

How to Pay Off Student Loans Fast

Okay, you can see the importance of paying off your student loans quickly. Here are some steps you can take to pay those loans off as soon as possible:

Pay More Than the Minimum

The easiest way to pay off your student loans quickly is to pay more than the minimum.

The more you pay each month, the faster the loan will be paid off and the less money you’ll have to pay in interest.

Even if you can’t afford to double your payments, you can still make a difference by paying just an extra $20 dollars per month!

Make Extra Payments Whenever Possible

If you can’t afford to pay extra every time your student loan payment is due, you can at least make a dent in your balance by making payments whenever you do find yourself with extra cash.

Whenever you get “bonus money,” put it toward your student loan payments. This includes things like tax returns, bonuses from work, and money that you receive as a gift.

Consider Refinancing

Another great step you can take if you want to pay your student loans off faster is to refinance them. Refinancing your loans allows you to combine all of them into one loan with a lower interest rate and lower monthly payment.

When you refinance, you get to avoid having to deal with multiple monthly payments and multiple student loan servicers. You can refinance both federal student loans and private student loans.

Consolidate Your Debt

Many people confuse refinancing with debt consolidation.

Both of these are viable approaches to paying off your student loans, but it’s important to understand the differences between them before you choose one over the other.

When you consolidate your debt, your interest rate does not get lower, nor does your monthly payment. This approach simply helps you organize your student loans so that you only have to make one payment instead of several.

Consider Starting a Side Hustle

If you’re having a hard time paying extra toward your student loan debt, you might want to consider starting a side hustle. This will allow you to earn extra money and put more money toward your debt each month.

There are lots of different ways that you can earn extra money these days. Try driving for Uber or Lyft or delivering food for GrubHub or DoorDash.

All of these side hustles let you earn money on your own terms, so they’re great for busy people or those with unpredictable schedules.

Talk to Your Employer

Sometimes, employers offer student loan forgiveness in exchange for volunteer work. They may also offer student loan repayment assistance as part of their benefits package. Check with your employer to see if this option is available to you.

Look for Interest Rate Deductions

Lots of student loan servicers will offer interest rate deductions in exchange for enrolling in automatic payments.

These deductions are relatively small — usually around 0.25 percent — but every little bit counts. It all adds up over time, and you can see some major savings later on.

Automatic payments are a good idea in general when it comes to paying back student loans (or any loan, for that matter). They give you peace of mind and eliminate the need to worry about keeping track of your payments.

Trim Your Budget

Look for ways to trim your budget, too. Most of us have various monthly expenses that we could stand to eliminate.

Track your monthly spending and check to see if you’re wasting money on eating out or buying coffee from your local Starbucks instead of making it at home.

Add up these purchases and you’ll be amazed at how much money you’re throwing away each month.

The average American spends $2,787 per year on food from restaurants and takeout joints — imagine if you put all that money toward paying off your student loans!

Get Out of Debt Today

Are you ready to be free from student loan debt?

It’s easy to feel overwhelmed by student loan debt, and you may feel as though you’ll never pay all of your loans off. That’s definitely not the case, though.

Follow these guidelines on how to pay off student loans fast and you’ll be well on your way to living a debt-free life.

Do you want to learn more about money management or getting out of debt? If so, we’ve got plenty of other resources just for you.

This article on nine ways to raise your credit score is a great starting point. It’ll teach you everything you need to know about paying off debts the right way.

what is the highest credit score

What is the Highest Credit Score and Does It Matter?

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If you’re applying for a new home, you may be worrying about your credit score more than ever. But if you check your credit score too much, will your credit go down?

Also is there such thing as perfect credit, and how do you get better credit? There are many factors that can affect your credit. Keep reading to learn more. 

What Is The Highest Credit Score?

The highest credit score in most consumer credit scoring models is 850. However, some other scoring models that are less used can go up to 900.

VantageScore is an older credit scoring model that used to go up to 990, but now it only hits 850. VantageScore was created with three major credit bureaus (Experian, Equifax, and TransUnion). 

Insurance companies, banks, and other lenders may even have their own credit scoring models. We don’t know exactly how many scoring models exist, or what the actual highest score is.  

However, if you have a high score, you’re going to get the best rates on products. So your credit score really does matter. Here’s how you can make your credit better. 

How Many People Get the Perfect 850?

We can’t tell how many people exactly have a perfect 850, but according to FICO, about one percent of Americans have a perfect score. So don’t obsess over a perfect 850, because actually a score around an 800 or higher (which is only 15 percent of the population) is considered the same as “perfect credit.” 

So basically, people who get excellent credit, even if it isn’t a perfect credit score, will get the lowest interest rates, and best credit card offers. You won’t necessarily save any money with the perfect credit score, it’s more like bragging rights, like owning a Tesla or black card. 

How Are Credit Scores Calculated?

There isn’t really a formula for all credit scores, but there are two main scoring models. These models are FICO and VantageScore 3.0, which make scoring criteria publically known. 

Here are some things that factor your credit score. Factors like payment history and late payments. As well as your account balances and credit history. 

The credit accounts you have including new credit application are all taken into consideration. 

FICO for example measures credit weighs various factors. Your payment history plays about 35 percent of your score, the amount you owe factors 30 percent.

Your history takes about 15 percent. While 10 percent is given to new credit and credit used. 

How Can I Check My Credit Scores?

The Fair Credit Reporting Act says you are supposed to get a free credit report each year from each of the three credit bureaus. Credit card companies are the easiest way to get a free cred score. 

A mortgage lender must also show you your credit score during your application process under federal law. 

There are also many websites and services like Credit Karma, that will check your credit for you for free. These programs will also send you e-mails letting you know if someone is looking at your credit score and give you tips on ways to improve your credit. 

How Can I Get the Highest Credit Scores Possible?

While there is no magical formula for perfect credit, there are a few things that affect your credit. You want to make sure you’re making all of your payments on time. Late payments affect your credit. 

You also want to make sure you don’t have credit card debt, which goes hand in hand with late payments. Credit card debt affects your credit. So make sure you pay your credit card balance in full each month. 

Having multiple credit cards, and not maxing out those cards, is another way to improve your credit. Just make sure you always have a balance on these cards. Do not get rid of a credit card once you pay it off. 

You also want to have different credit accounts, such as revolving credit which includes ongoing loans and credit cards. There’s also installment loans like mortgages and car loans. 

Maintaining Good Credit 

Instead of focusing on perfect credit, make sure you maintain good credit. Some things that help keep good credit is making sure you don’t close old credit cards. Always keep a credit balance, and don’t close a credit card because you paid it off.

Also, manage your debt. There’s a chance you may have debt you weren’t even aware of. Get on top of that and make a plan to pay off that debt.

You also want to make sure you keep your credit card balances low. This means paying off as much as your credit card as you can each month, and not just the minimum.  

Also, limit how many new credit applications you apply for. Every time you apply for new credit, this affects your credit score.

Keep an eye out on your credit report. See what’s affecting your credit, and work on making that better. 

Do Perfect Credit Scores Matter?

Honestly, precision doesn’t matter as much as having reports that show you know how to manage your credit well. If you have a FICO score above 760, you’ll be able to qualify for the best credit card offers, best rewards, and lowest interest rates. 

There’s not a huge difference to lenders if you have a 780 or 800 credit score. People with excellent credit get the best terms, as long as there’s enough credit history and also income to back this up. 

The advantage of having a perfect credit score is protection if you miss a payment or if you have multiple inquiries about your credit. Its easier to avoid this if you properly manage your credit from the beginning. 

Improve Your Credit Today 

Now you know what is the highest credit score, realize it’s not important to have perfect credit, rather good consistent credit. Make sure you’re watching your credit score and doing everything in your power to improve it. 

While having an 850 credit score is nice, so is consistently having good credit. For more information on your credit and to find out if watching your credit is hurting your score, check out this article. 

Identity Theft? Take a Deep Breath & Follow These Steps

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Many people assume that they never have to worry about identity theft.

They assume people only want to steal the identities of those with great credit scores or bank accounts.

But here’s the truth…

In 2017, nearly 17 million people had their identity stolen. 

Many of them were just average Americans who worked regular jobs and weren’t bringing in high amounts of money.

Naturally, they never expected that they would be a victim of identity theft.

 

How Does Someone Pull Off Identity Theft?

There are quite a few ways that a person can pull off identity theft. Some simply jot down people’s personal information at the business where they work.

Some people take mail that was wrongfully delivered to them and use it to create false accounts in other people’s names.

There are even times when friends and family members will steal your identity to purchase something that they want or get utilities turned on in your name.

When you fall prey to identity theft, you need to act quickly to minimize the consequences.

These are the steps you should take…

 

Step One: Contact Your Bank and Creditors Right Away

The first thing you need to do when you notice you’ve been a victim of identity theft is contact your bank and your creditors right away.

You need to let them know what has happened, find out if any charges or accounts have been opened in your name that you aren’t aware of.

You also need to know if anyone has contacted your bank on your behalf.

Instruct your bank to put a hold on all of your accounts so that no account transactions go through.

Also, ensure that nothing can be charged to your credit cards by ordering a replacement as soon as possible.

The sooner your bank or credit card company aware of the situation – the more damage you prevent from happening.

 

Step Two: Check Your Credit Reports

Credit reports will have documentation of any new accounts that have been opened. You can go online to visit the Experian, Equifax, and TransUnion websites to get a copy.

Remember that the law states you are eligible to pull one free copy of your credit report annually.

If you already got a copy of your report once this year, you may have to pay a fee to get an updated copy.

Once you get your report you need to be able to look closely at everything that has been opened in your name.

You also want to make sure that there are no outstanding debts or loans that you don’t know about.

Each of the reports from the three credit bureaus will contain unique information so that’s why you need to get a copy of all three of them.

Check your reports again after 30 days, because it takes credit bureaus time to update your information after they are opened.

When it comes to identity theft, you don’t want to leave any stone unturned.

 

Step Three: Sign Up for Credit Monitoring

Experian and TransUnion offer you the ability to sign up for credit monitoring.

This allows you to be alerted of new credit inquiries, accounts, or debts.

You may have to pay a small fee for the services, but it will be well worth the cost if it allows you to prevent your credit from being ruined.

Websites like Credit Karma and Credit Sesame have free credit monitoring services that are a great help.

 

Step Four: Go to the Police

Once you have evidence of the identity theft through your credit reports or other information collected in the process of your investigation, file a police report.

And remember…

Even if you have an idea of who may have stolen your identity it is best to avoid any confrontation – which could be potentially dangerous.

The police are there to help.

The police will create a report that details why you believe you have been a victim of identity theft, what proof you have, and an investigation will be opened to try to determine what is really going on with your identity.

Never underestimate the seriousness of identity theft.

It doesn’t stop at opening accounts in your name.

Those who participate in identity theft can get into legal trouble, claim to be you and then you will be responsible for proving you did not do whatever crime they committed.

Reporting the situation to the police provides you with important paperwork that you can give to your creditors.

It also ensures that if anyone gets in trouble using your name there will be proof of the identity theft which could keep you from being held liable for the other person’s decisions.

 

Step Five: File a Fraud Alert with the Credit Bureaus

Once you have the police report, you need to contact the credit bureaus directly and provide them with the proof that your identity was stolen.

They will be able to open up an investigation and work with the police to ensure that any questionable activity is properly documented.

This can also ensure that you aren’t held liable for the charges or delinquencies the person creates while they are using your identity. This can save you a lot of irritation and money in the end.

 

Step Six: Fax Identity Theft Reports to Your Creditors

Last but not least, it is important to provide your creditors with proof that your identity was stolen.

Fax a copy of the police report to each of your creditors and advise them to issue out replacement cards, or put your account on hold temporarily.

It’s also a good idea to contact local utility companies and let them know about the situation. They can flag your name in their computer system so no new accounts can be opened in your name.

You also may want to tell your friends and family what happened and that you went to the police. If someone is guilty of stealing your identity, they may fess up to the crime if they think they could be facing serious punishment for it.

 

Sources

[1] Facts + Statistics: Identity theft and cybercrime | III. (n.d.). Retrieved from https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime

[2] Identity Theft | USAGov. (2019, February 14). Retrieved from https://www.usa.gov/identity-theft

credit monitoring

Will Credit Monitoring Hurt My Credit Score?

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Close to a third of Americans officially have bad credit. This is defined as a credit score that’s lower than 601.

Credit can be complicated. Many people believe that credit monitoring will hurt their credit score, and have no idea what their credit score actually is.

Read on to learn some of the most common misbeliefs around credit, and whether you should be monitoring your score.

How Does Credit Work?

When you apply for credit, lenders need to determine whether they can trust you to pay it back. Your credit score is a three-digit number that helps lenders make this decision. People with good credit scores are eligible for better interest rates and credit cards with better rewards.

Your financial habits impact this score. It goes up when you’re responsible with your credit, and it goes down when you’re not. Here are the components that make up your credit score:

Payment History

This is the largest component of your score. That’s why it’s so important to make sure you make your payments. If lenders can see that you have a negative payment history, they’ll assume you can’t meet your current obligations.

Late Payments

It’s easy to forget to make a payment on time- after all, life is busy. But if you’re late for a payment on a loan or credit card, your credit score will usually have a negative adjustment.

How much will this adjustment be? This often depends on just how late you are. Do yourself a favor and set up an automatic payment so you don’t need to remember to pay each month.

Debt Burden and Utilization

Lenders want to know how much debt you have, and the percentage of credit being utilized. This last factor is super important- you want to show that lenders trust you with credit, but you don’t really need it.

Generally, your utilization should be less than 30%. That’s why you should be careful when canceling credit cards. This can decrease the amount of credit available to you, increasing your utilization- even if you haven’t actually used more credit.

Length of Credit

The older your accounts, the better. If you’re considering canceling a card, try to avoid canceling your older credit cards so you can show a longer credit history.

Credit Searches

This is a credit adjustment based on any hard inquiries into your credit history. And this is why many people believe that credit monitoring will hurt their score.

Your credit score does adjust based on the number of inquiries, and will usually be adjusted within around 30 days so you have time to shop around. When you apply for credit, the lender will pull your credit history- and that impacts your rating.

Is Credit Monitoring Bad?

As mentioned above, your credit score is impacted when lenders check your credit history. This is what’s known as a hard inquiry or sometimes a ‘hard pull.’ And it costs you points.

This is because this type of inquiry is when someone is deciding whether they should extend credit to you. You can expect this inquiry to cost you anywhere from five to twenty points.

A soft inquiry (also known as a ‘soft pull’) is when you check your own score. However, this can also be performed by a creditor who’s considering preapproving you for a credit card or loan.

If you’re applying for several credit cards within a short time frame, you could see your credit score drop significantly. A hard inquiry will stay on your report for two years.

Here’s why you should monitor your score:

Check for Discrepancies

Monitoring your credit is the same as a soft inquiry, so it won’t impact your score. It’s actually a good idea to regularly monitor your score since you’ll easily be able to see if something is wrong.

If you see a massive change in your score, it could indicate that you’ve been a victim of identity theft or there has been a mistake in your report.

Predict Your Approvals

Before you apply for a credit card or loan, it’s a good idea to know if you have a high chance of approval. That way, you won’t waste time (or the hit to your score) on a hard inquiry for a product you don’t qualify for.

Monitor Easily

These days, it’s easier than ever to monitor your credit score. The three major credit reporting bureaus are TransUnion, Experian, and Equifax. By law, they’re all required to give you one free copy of your credit report each year.

There are also a number of services and apps which will give you updates each month, so you can see how your activities are impacting your score.

Need to Increase Your Score?

Have you recently checked your score? Maybe you’ve found that it’s lower than you thought it would be? Or maybe you were turned down for a credit card or loan?

Here are the best ways to increase your score:

Know Your Starting Point

Knowledge is power. That’s why it’s a good idea to make a list of everything you owe, and when your payments are due. Check your credit report to make sure everything lines up, and then you can create a strategy to increase your score.

Decrease Your Utilization

You can do this in two ways: First, apply for a credit limit increase. If you have a good payment history, you’re likely to be approved. The second option is to pay off as much as you can to get that utilization under 30%.

Create Good Habits

Maybe you need to set up a direct debit or automatic payment. Or perhaps you need to mark your payment due dates on your calendar. Make sure you’re always paying on time, and your credit score will begin to increase.

Wrapping Up

As you can see, credit monitoring is a smart way to take control of your finances. By regularly monitoring your credit, and using the above tips, you’ll be able to watch your credit score increase in 2019.

For more information about improving your financial health, check out some of our blog posts.