Quantcast
Credit Firm Logo

Client Login

For a Free Consultation
& Credit Evaluation Call
1-800-750-1416

You are worthy of having excellent credit.
Join thousands of people just like you,on a path to improving their credit.
Credit Firm can help you improve your credit faster than ever.

11 Credit Score Principles You Should Know

July 21, 2016 by  
Filed under Blogs, Credit Score

credit scores

 

Credit scores can seem like a very complicated topic for most people but, it doesn’t have to be. Deep down there are a few core fundamental principles that will help you better understand your credit, lets go through them.

1. Credit Report
Your credit report is a history of how well you repay debt. It includes your payment history on debt such as mortgages, auto loans, credit cards, personal loans, student loans, as well as collection accounts from third party debt collectors, inquiries and public record information such as any bankruptcies, Tax Liens, or Judgments. You credit report also contains your personal informations such as your names and aliases, addresses, date of birth, phone numbers, and employers.

2. Credit Bureaus
Your credit history is maintained by companies often referred to as credit bureaus or credit reporting agencies. These companies gather and collect information about you and your payment history from creditors, debtors, and third party data furnishers. The 3 largest credit bureaus are Experian, Equifax, and TransUnion.

3. Credit Score
Credit scores are calculated by aggregating the information from your credit reports and running that info through a mathematical formula designed to score your report into a simple 3 digit number.

4. Different Credit Scores
Not only are there different scores for each of the 3 credit bureaus, there are several different credit scoring models which are used to get credit scores themselves. For Example, the most commonly used credit scoring model is the FICO score but, most people don’t know that there are 49 different scoring models of the FICO score. There are also a plethora of other models used to generate scores like the TransRisk Score, Vantage Score, Plus Score, ScorePower Score, etc…. Each of these scoring models uses a different scoring range and mathematical formula to aggregate a score. This is why credit scores differ from place to place.

5. Credit Score Factors
According to FICO (Fair Isaac Company), the developers of the lending industry’s most widely used credit score, the FICO score, there are 5 main factors which are used to calculate your credit score. Those factors, in order of importance are; payment history, credit utilization, account age, mix of credit and inquiries.

6. Free Credit Reports
You may obtain a free copy of your credit reports once a year from the government mandated website www.annualcreditreport.com.
You may also obtain a free credit report from some free credit monitoring services like;
www.creditkarma.com (FREE TransUnion and Equifax Credit Reports)
www.quizzle.com (FREE TransUnion Credit Report)
www.freecreditreport.com (FREE Experian Credit Report)

7. Free Credit Scores
There is no law currently requiring the credit bureaus to provide you with a free credit score but, there are a few websites out there providing consumers with a free credit score. Please note that none of these scores are FICO scores and they will likely differ from your actual FICO score.
www.creditkarma.com (FREE TransUnion and Equifax VantageScore 3.0 scores)
www.quizzle.com (FREE TransUnion VantageScore 3.0 score)
www.creditsesame.com (FREE TransUnion VantageScore 3.0 score)
www.credit.com (FREE Experian VantageScore 3.0 score)

8. Checking Your Own Credit Wont Hurt Your Scores
There are 2 different types on inquiries which report on your credit report, hard inquiries and soft inquiries. When you apply for credit (mortgage, auto loan, credit card, etc…) a hard inquiry reports on your credit report and lowers your score. Checking your credit through any of the sites we listed above incurs a soft inquiry, which means that it is just you checking up on your own credit. Soft inquiries do not lower your credit scores so check your own credit through soft inquiries as often as you like.

9. Negative Information Can Report For…
According to the Fair Credit Reporting Act (FCRA), derogatory information can report for up to 7 years from the date of the first key delinquency, with a few exceptions. Chapter 7 Bankruptcy may report for up to 10 years and a Federal Tax Lien may report indefinitely or 7 years from the date it is paid. This means that if you opened an account is 2010 and became delinquent in 2015, the account may continue to report derogatory info until 2022, 7 years from the date that the account became delinquent (2015), not from the date the account was opened (2010).

10. A Low Credit Score Can Ruin Your Life
A low score means that you will be stuck paying higher interest rates on everything form a mortgage, to an auto loan, to a credit card, even your insurance rates are influenced by your credit scores. It has even become common practice for employers to check credit reports to determine whether an applicant is financial responsible. Consumers with bad credit are deemed higher risk and more likely to commit fraud or steal.

11. The Good News
Bad credit isn’t permanent. CreditFirm.Net has helped thousands of consumers just like you remove negative information from their credit reports and improve their credit scores. Since 1997, we have helped our clients purchase homes, get low interest auto loans, and save millions of dollars by improving their credit scores. Will you be our next success story?

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 3-5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

Why is Good Credit Important?

September 17, 2015 by  
Filed under Blogs, Credit Report, Credit Score

bad credit

We all know that we should strive to have a good credit score, but, why?

Why is having good credit important?

Here is a list of 6 things you will need to have good credit for.

1. Renting an Apartment

Your credit will determine whether you will be approved to rent an apartment as well as the security deposit which will be levied on you. Consumers with low credit scores are often times hit with high security deposits which can equal up to 2 months of rental payments while those with high credit scores may not be required to put down a deposit at all.

2. Setting Up Utilities

Got your new apartment or home? Great, now it’s time to set up your utilities. Electricity, Gas, Water, Cable, Phone, Internet providers will all check your credit in order to determine whether you qualify for service and if you do, the amount of security deposit you will need to put up to establish service. Just like renting an apartment, consumers with low credit scores are often times hit with high security deposits which can range between $250 to $500 per service, equaling thousands of dollars of deposits, while those with high credit scores are not required to put down any deposit at all.

3. Buying a Car

Your credit score will determine the amount of loan which you qualify for, the interest rate, length of term, down payment, and monthly payment amount. Consumers with low credit scores may not even qualify for a loan but, if they did manage to squeak by, the fees would be astronomical.

Lenders would likely ask a consumer with bad credit for;
– Large down payment
– High interest rate
– Short length of term (typically no longer than 36-48 months)
– Small loan amount

But, if you have good credit, lenders will typically offer;
– No down payment
– 0% interest rate
– Long length of term (72-84 months)
– Large loan amount
In the end, the person with good credit can pay less for a more expensive car without having to put a penny of his money down.

4. Getting Insurance

Now that you have a car, you will need to get insurance for it. You may not have known this your credit score actually determines your insurance premium, the amount you pay for insurance. According to certain experts in the insurance industry, a credit score can be an even better predictor of getting into an accident and costing the insurance company money, than your driving record. Consumers with bad credit will have higher insurance premiums than those with good credit.

5. Getting A Job

You got an apartment, a car, utilities, insurance, now it’s time to get a job to pay for all of those things right? But, what does your credit have to do with you getting a job or a promotion? Sometimes, Everything! More and more employers are checking candidates credit reports in order to determine their hire-ability. Job seekers with bad credit are seen as risky because they are looked at as irresponsible, disorganized, and in some cases may be more likely to steal. While those candidates with good credit are looked at as responsible members of society which are organized enough to maintain good credit and likely be the same way at work.

The military also has certain set standards for credit as well. Those with bad credit will never be given top secret security clearance. According to the Department of Defense, “Failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.”

That pretty much speaks for itself.

6. Emergency

We should all have a rainy-day/emergency fund but, most don’t. So what happens when emergencies hit and you don’t have the cash? Consumers with good credit have a wide variety of financing options, 0% credit cards, low interest rate personal loans, seems like theres always someone willing to lend you a helping hand when you have good credit. But, those with bad credit get caught up in high interest/fee credit cards and pay-day loan places which put them in a never ending spiral of high fees and constant indebtedness.

I don’t know about you but, it seems like only rich people can afford to have bad credit. Consistently over-paying for services and leaving large deposits which they will likely never see again.

Can you afford to continue living with bad credit?

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 3-5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

5 Common Credit Blunders

September 15, 2015 by  
Filed under Blogs, Credit Repair, Credit Score

…And how to fix them.

mistake

Nobody is perfect but, when your credit score is at stake, you need to pay extra attention because one mistake can destroy your credit score and derail any chance you had of buying a house, car, or getting a student loan.

Let’s take a look at the 5 most common credit blunders consumers make and how to fix them.

1. Forgetting to Make a Payment

Paying your bills on time is one of the most important factors used to calculate your credit score. A recent late payment can lower your credit score up to190 points and stay on your credit report for up to 7 years. This is why it is so important to make your payments on-time.

If you aren’t sure whether you can afford to pay something on time every month, don’t buy it. And if you are a bit disorganized and forgetful – set up auto bill pay with your bank or creditor.

2. Medical Bill Issues

Did you assume that your insurance company paid all your medical bills? Never assume anything. Check with your doctor to make sure that all of your medical bills had been paid. Call your insurance company to make sure that they pay your bills on time. Insurance companies don’t care about your credit score and if they take too long to pay your bills, the debt may go into collections before it is paid.

Stay on top of your insurance company to make sure that they pay your medical bills in full and on time. And keep an open line of communication between your doctor so that they can let you know if there are any unpaid bills before they send them to collections.

3. Co-Signing On A Loan

Being a co-signer (or #2) on a loan means that you are 100% liable for the full and complete balance of the debt. There have been so many stories of consumers getting burned by friends, relatives, loved ones – all because of co-signing on a loan. We have people calling us who still don’t understand why an account is reporting on their credit report which is not theirs, it belong to their brother or cousin, they only co-signed on the loan.

Let’s make one thing perfectly clear. When you co-sign on a loan, whether it’s a car, furniture, or credit card – – you are saying that if the borrower cannot pay the debt, you will be responsible for 100% of the loan. Not 50% of it, ALL OF IT. You are liable for 100% of the loan if the borrower defaults. And any late payments on the account will be reported to your credit history as though you paid the account late.

Do not co-sign for anyone unless you are both willing and able to take over their debt and ruin your credit score. Plus, there is always the unfortunate issues which arise when having financial ties with friends and loved ones. Theres no faster way to ruin a relationship or friendship than by co-signing on a loan.

How do you avoid this issue? Easy, JUST SAY NO!

4. Maxing Out a Credit Card

Maxing out your credit card could lower your scores by as much as 150 points. Credit cards are not your money, it is the bank’s money. Every time you use a credit card you are borrowing that money from a bank with the promise to pay them back. Maxing out your credit cards makes you look like you do not have enough cash for your everyday expenses – and that scares future lenders, thus your scores decrease.

Keeping the balance of the credit card at or below 20% of the credit limit shows lenders that you are using the credit cards for convenience and this increases your credit scores. One more fun fact, FICO did a study a few years ago on consumers with 800 scores and above, their average utilization rates were 1%. This means that if their credit limits were $100,000 – the average balance was $1,000. Keep your credit card balances as low as you can and your scores will increase.

5. Closing Old Accounts

What do you do when you pay off a credit card and never want to use it again? Close it, right? WRONG! About 15% of your credit score is calculated from the average age of your open/active credit history. This includes both open installment and revolving accounts. Closing your old credit card accounts may shorten your average length of credit history and lower your credit score by as much as 75 points.

If you’re dead set on closing an account, start with the youngest ones first, this way your average age of open accounts will still remain high and your credit score will not be damaged.

Protect your credit scores and think twice before doing anything which may damage your credit.

And if you need help on repair your credit, we’re here for you 24 hours a day, 7 days a week.

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 3-5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

The History Of Credit Scoring

September 10, 2015 by  
Filed under Blogs, Credit Score

history of credit

Credit scoring first started in the late 1950’s to support lending decisions in large department stores. The concept was revolutionary and by the end of the 1970s, most of the nation’s largest commercial banks, finance companies, and credit card issuers used credit-scoring. However, credit scoring was widely adopted when Fannie Mae and Freddie Mac fully endorsed the use of the FICO score for home mortgage lending.

Credit scoring is now an automated process. but it hasn’t always been that way. Before the advent of computers, a person’s credit score was manually calculated by a bookkeeper. Such judgmental decision making is time consuming, costly, and subject to irregularity because different bookkeepers may weigh factors differently.

In 1956, William Fair and Earl Isaac, identified this problem and started the Fair Isaac Corporation (FICO). Their mission was to use computers and mathematics to generate credit scores from credit report data. The mathematics was to look at historic data (consumers’ past payments) and predict future behavior in the form of a number. The FICO score was launched. Fair Isaac is now a large corporation traded on the New York Stock Exchange (NYSE: FI).

From the 1950’s through the 1990’s (some fifty years), consumers could not even have access to their credit scores. Luckily the free thinkers of California changed that for everyone. In 2001, the State of California ruled that residents were allowed to know everything the credit bureaus were reporting, including their credit score. Fair Isaac and the Credit Bureaus decided they might as well make the data public to all consumers in the U.S, instead of trying to block it from everyone but Californians.

At first, FICO was hesitant, but soon they realized they would be floating in money by selling credit scores. They immediately launched MyFico.com, and hired the opinionated Suze Orman as their spokesperson to spread the word.

In 2001, the credit bureaus wanted a piece of credit scoring pie, so FICO decided to sell each credit bureau their own version of the FICO model. That’s right…customized FICOs! Each credit reporting agency had its own FICO:

credit bureau scores

This was fine but, the credit bureaus did not like paying money to FICO, so they created their own credit scoring models. Experian created the Plus score, TransUnion created the TransRisk score, and Equifax created the ScorePower score. Then, the 3 credit reporting agencies decided to collaborate and started planning their own credit scoring model. The Vantage Score was announced by the three bureaus on March 14, 2006.

Since then, the Vantage score has been updated a few times and FICO has added a few more variations to their scoring models (see 49 FICO scores).

Through all the confusion and constant change there is one constant. Since 1997, CreditFirm.Net has been at the forefront of helping consumers increase and improve their credit scores.

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 3-5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

What Your Car Says About Your Credit

September 8, 2015 by  
Filed under Blogs

auto credit

It’s an interesting fact that there is a correlation between the type of car a person drives and their credit score. It’s also interesting to note that the car brands with the fewest buyers (Mitsubishi and Suzuki) also tend to have the buyers with the lowest credit scores.

What’s the actual breakdown of credit score to car?

Here is the full list of average scores paired with the cars they buy:
(Source: Experian)

Mitsubishi Buyers: Average Credit Score of 694
Suzuki Buyers: Average Credit Score of 704
Dodge Buyers: Average Credit Score of 718
Kia Buyers: Average Credit Score of 721
Toyota Buyers: Average Credit Score of 723
Jaguar Buyers: Average Credit Score of 810
Infiniti Buyers: Average Credit Score of 810
Audi Buyers: Average Credit Score of 810
Porsche Buyers: Average Credit Score of 810
Acura Buyers: Average Credit Score of 813
Lexus Buyers: Average Credit Score of 816
Volvo Buyers: Average Credit Score of 818

So what’s the difference between a Mitsubishi driver and a Lexus driver? About 122 points, according to the statistics.

This is a perfect example of how credit is a reflection of so much more than just payment performance.

Regardless of the car you drive, the assumptions that are made based on a credit rating can make or break you — both personally and in business. This is an important key to remember as you build your business and your credit.

What does your credit score say about you?

 

Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 3-5 days.

Support. Award winning customer service guarantees your satisfaction.

CreditFirm.net Review

« Previous PageNext Page »