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What Do Americans Know About Credit?

September 6, 2018 by  
Filed under Blogs, Credit Report, Credit Score

credit scoring

The Consumer Federation of America (CFA) and VantageScore Solutions have recently released their annual survey examining how much consumers actually know about their credit scores.

1,000 Americans were surveyed on their knowledge of how credit scores are calculated, where and how to obtain credit scores/reports, how to best manage their credit and what to do to improve their credit scores.

The results were pleasantly surprising, revealing that consumer knowledge of the credit industry and credit scores have increased overall.

Let’s take a look at some of the key findings from the survey.

The number of consumers who have viewed their credit scores at least once in the past year has increased from 49% to 57%.

Although the 8% increase is a great step in the right direction, I find it strange that 43% of the individuals surveyed have not inquired about their credit scores at least once in the last year.

With the availability of free credit reports and scores at all-time highs and the ability to get your credit information at will from credit card companies and credit monitoring services like Credit Karma, Credit Sesame, Quizzle, Nerd Wallet, Wallet Hub, etc… not to mention directly from the 3 credit reporting agencies (Experian, Equifax, and TransUnion). Everyone in the US should be checking their credit on a monthly basis.

So although it’s great news that the numbers have increased, the fact that a case of Identity Theft occurs once every 2 seconds makes us hope that the number of consumers that check their credit at least once a year gets up to 100% sooner rather than later.

The majority of the individuals surveyed who did check their credit scores were potential borrowers were planning on applying for a loan in the near future. These individuals also demonstrated an increased knowledge of credit when compared to consumers with no plans to use their credit.

This tells us that unfortunately, people only care about their credit when they need it. But, by that time it may be too late. It’s much easier to spend 15 minutes a month on reviewing your credit and making sure that everything reporting in your credit report is 100% accurate and reporting correctly instead of stressing out over issues you located in your credit report as you were applying for a loan.

With the recent data breach at Equifax where 143 million credit files were compromised containing names, dates of birth, social security numbers, addresses, phone numbers, and tradeline information; Identity Theft has never been more of a reality.

On top of the risk for identity theft, 79% of credit reports contain errors. Although these errors may seem rather small and insignificant on the surface, according to a recent report from the Federal Trade Commission, 20% of credit reports contain errors that impact your credit scores enough to increase the consumer’s credit risk tier, making them less likely to be offered a higher interest rate.

Checking your credit every month is as important as paying your bills on time.

The CFA also found that a large part of the consumers surveyed was able to identify 3 factors used to calculate a credit score. Payment History, Credit Utilization, and Public Records such as Bankruptcy.

Several incorrect factors were also commonly listed as having an impact on credit scores including marital status, age, and income. These factors DO NOT impact your credit scores.

It is important to understand what factors are used to calculate your credit scores in order to increase them.

Several of those who were surveyed were able to get one or two of the factor used to calculate a credit score but, few were able to get all 5.

For your records, there are 5 main factors used to calculate your credit scores.

Payment History – 35% of your credit score.
Credit Utilization – 30% of your credit score.
Length of Credit History – 15% of your credit score.
Mix of Credit – 10% of your credit score.
New Credit/Inquiries – 10% of your credit score.

What your credit scores are made of

These findings suggest that Americans are more curious and knowledgeable about their credit than ever before, especially if they are interested in applying for a loan in the near future.

However, there’s still a long way to go.

Monday Mailbag 9/3/2018

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I have been threatened via email about a debt that I don’t recall ever asking for or getting. Tomorrow, they said they are issuing a warrant with my local police and serving me a summons. I am afraid of this and don’t know what to do.

Legitimate collection agencies are bound to work within the confines of the FDCPA (Fair Debt Collection Practices Act). Collection agencies CANNOT get warrants issued against you for debt and are legally bound to provide you a 30 day written notice when they acquire your debt. This email sounds like a scam. If it’s a legitimate debt which is still within your state’s statute of limitations and they summon you to court, you will have the opportunity to validate the debt and receive all of the original paperwork from the original creditor (including the original contract you signed when you established the debt) to find out what the debt is for. Don’t panic and DO NOT send any money to this company.

 

Is a Credit Score of 600 good or bad?

A 600 credit score could be either poor or fair depending on the credit scoring model used to calculate the score.

Most credit scores (FICO & VantageScore v3.0) have a range of 300–850 with a few industry-specific FICO scores ranging from 250–900 and other scores like Sagestream ranging from 1–999 and VantageScore v2.0 ranging from 501–990.

For the sake of simplicity, let’s assume that your score of 600 is a FICO score, the most common credit scoring model and the model used in 90% of lending decisions.

A 600 FICO score is considered to be in the Fair range which means that you can probably qualify for a mortgage or auto loan but, the terms and interest rates won’t be that great.

FICO Score Ranges

According to the Fair Isaac Company (FICO), the average credit score in the US is 695 which means if you should really try to shoot for the 700’s to start getting premium offers from lenders.

Based on some information which we received from mortgage lenders and auto dealers, your FICO score should be at least 740 to qualify for tier 1 auto loans and mortgages.

To increase your scores you will want to work on optimizing the 5 factors used to calculate your credit scores, which are:
Payment History – 35%
Credit Utilization – 30%
Length of Credit History – 15%
Mix of Credit – 10%
New Credit/Inquiries – 10%

To get the most out of your credit scores and increase them, you should pay your bills on time, work on paying down your credit cards to a credit utilization of 20% or less, keep your oldest accounts open and active to establish a long length of credit history. Don’t open too many accounts at once and incur too many inquiries, in fact, you want to try and limit yourself to 1 inquiry every 6 months. Carry a good mix of credit which includes both installment and revolving accounts.

Finally, if you have and past delinquencies or accounts reporting derogatory statuses like collections, late payments, charge-offs, repossessions, tax liens, judgments, bankruptcies, foreclosures, etc… you will want to work on removing them from your credit reports by leveraging consumer protection laws such as the FCRA, FCBA, FDCPA, etc….

You can’t magically remove all negative information from your credit reports with the wave of a wand but, if you investigate the derogatory information, validate the debt, complete method of verifications requests, permissible purpose verification, goodwill requests, etc… you can do some damage to the negative information and improve your scores.

You can perform all of this work yourself but, make sure that you understand that the process takes time and can be quite time-consuming. You have to be organized, diligent, and stay on top of everything.

You can also choose to hire a credit repair company to handle all of the work on your behalf to work on removing the derogatory information and advise you on the best way to manage your credit to get the most out of your credit scores.

We would be honored to have the opportunity to work on your credit reports, increase your credit scores, and help you reach your financial goals.

 

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

Monday Mailbag 8/27/2018

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Why don’t you have different tiers of service like other companies?
Great Question! We believe that everyone deserves to have a great credit score as soon as possible and we will not hold back and limit ourselves to fewer disputes or limited actions because someone is paying us $10 less than someone else.

That is why we have an all-inclusive standard level of service for all of your credit repair needs. We aim to provide the fastest, most efficient credit repair service, without all of the confusion of multi-level programs other credit repair companies offer.

Our standard service program includes every credit repair strategy and leverages every consumer protection statute that the law allows. Whether it’s unlimited credit bureaus investigations, debt validation, goodwill intervention, escalated info requests, permissible purpose verification (to work on inquiries), contacting creditors, collection agencies, third-party data furnishers, or courts, we never hold back.

Plus, every one of our clients gets access to our client portal where they will be able to monitor the progress and work done on their credit in real time.

Compare the services that we offer against any other company’s best or premium service and you’ll realize that our standard service is not only comparable but, in most cases actually exceeds the other guys.

Why are your prices so low?
The real question here is why is everyone else charging so much? How much should a company charge you to send out 3 letters to the credit reporting agencies disputing multiple accounts? How much should a credit repair service charge you to mail a debt validation request, goodwill letter, permissible purpose verification document or method of verification request? How much should you pay? The answer is, as much as your willing to pay.

We charge our clients $49.99 per month for all of these services and more. We feel that $49.99 is a reasonable price but, if paying someone else $130 a month for the same services makes you a little better about your investment… go for it. Ultimately, it’s worth it even if it’s costing you $150 a month because of all the money that you’ll end up saving having a good credit score.

There are a lot of great credit repair services that charge much more than us. Lexington Law charges $89.95 to $129.95 per month depending on the plan that you choose but, they used to only charge $39 a month for the same services. What justifies a 233% increase in their price? You’ll have to ask them.

When comparing a credit repair service, compare all of the work that the company will actually do, not just their prices. A more expensive price may make it seem like you’re getting a superior service but, what actions will they take to improve your credit scores? Do your due diligence and research, and we’re confident that you’ll find that our service at $49.99 does everything that the other guys do at $130 a month, if not more.

Finally, when considering the cost of a credit repair service, you should also compare it to the cost of living with bad credit. Over the course of their lifetime, a person with poor or even average credit may end up spending $400,000 more than someone with good credit.

But it doesn’t just stop there, many employers are now using credit reports when screening their job candidates and bad credit may end up costing you much more than a few hundred dollars in interest every month. Bad credit may end up costing you a good high paying job.

In the end, the cost of a credit repair company is important but, it pails in comparison to the cost of having bad credit. Whether you use our credit repair services, choose another company or decide to fix your credit yourself, what’s important is that you do something about your credit.

Be proactive and take charge of your credit and your future.

All of us here at CreditFirm.net would be honored to have the opportunity to help you improve your credit scores. If you have any questions feel free to call us at 800-750-1416 or email us at info@creditfirm.net.

Are you ready to get started with your journey to a better credit score?

 

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

Credit Report Special Messages

June 13, 2018 by  
Filed under Blogs, Credit Report

credit report special messages

Consumer access to credit reports has made knowing what is being reported about you a lot easier than it used to be but, one thing your credit reports won’t show you are the special messages your lender gets on their credit reports.

Usually located below the reports themselves are messages that your lender will see on their credit reports giving them additional information about you and warning them of any possible suspicious activity.

These messages include information which can stop you from getting approved for a loan.

Since you do not have access to lender reports and the credit reports you have access to omit this information, let’s go over these 5 messages to see if there is anything that you may need to address before applying for a loan.

1. ID Mismatch Alert
This message appears when the inputted address, social security number or last name does not match the information on file with the credit reporting agencies.

What does this mean?
To a lender, this means that you may have recently moved, got married, or are at risk for Identity Theft. At this point, the lender may request more documentation as proof of your residency in the form of utility bills, 2 most recent paycheck stubs, most recent bank statement, and rental or mortgage agreement. As well as proof of your identity in the form of your social security card, ID, or birth certificate.

What to do?
Make sure that the name, address, and social security number that you have given the lender are 100% correct and that the information is reporting in your credit reports. If you have recently moved or changed your name, update the information with your lenders and credit bureaus and give them enough time (30-60 days) to update the information in your credit file.

2. High-Risk Fraud Alert
This message appears if the inputted address, social security number or phone number that you have provided your lender have been recently used in suspected fraudulent activity.

What does this mean?
This means that either your home address is being reported as a commercial or business address, that your social security number belongs to someone who is deceased or that your social was never actually issued by the Social Security Administration.

What to do?
Make sure that your home address is not linked to a business. If you’re operating a business get a PO Box or UPS Store box and get a proper business address. Make sure that your social security number is legitimate and correct. If there is an issue with the social security number contact the Social Security Administration to resolve the issue.

3. SSN Year of Issuance
This message reports the state where your social security number was issued as well as either the year or the range of years when the social security number was issued as well as your age when the social security number was issued.

4. OFAC Name Screen
This message reports the result of your information being cross-checked against the U.S. Treasury Department’s OFAC (Office of Foreign Assets Control) database.

What does this mean?
In most cases the result will return no matches but, if the system designates you as a person who is on the OFAC list, you will be turned down for your loan. Point blank. The OFAC database contains persons who are drug traffickers, money launderers, terrorists, and other SDNs (Specially Designated Individuals) who not allowed to do business within the United States or who have economic sanctions against them.

What to do?
If you find an OFAC alert pop up on your credit report due to a case of mistaken identity, contact the credit reporting agencies. In most cases, the OFAC search only checks names, not other identifying information such as date of birth, social security number, etc… so contacting the U.S. Treasury Department won’t be much help. Contact the credit bureaus and request that the alert is removed from your credit file. If the credit reporting agency refuses to do so, contact an attorney with experience in resolving FCRA (Fair Credit Reporting Act) cases.

5. Fraud Alert
This alert, usually consumer initiated, means that your credit may be at risk for identity theft and additional steps will need to be taken by the lender to verify your identity. These steps usually include calling a phone number which you included when filing your Fraud Alert. Once the lender contacts you and confirms that you are the actual person initiating the application, the loan can proceed.

6. Hawk Alert
This alert is generated if the credit reporting agencies suspect potential fraudulent activity.

What does this mean?
The alert is typically generated when the residential address or telephone number which you input on your application for a loan is also listed as a business address or business phone number. The alert is also generated if the social security number that you are using on your application was issued less than 24 months ago or shows that the owner of the social security number is deceased.

What to do?
Make sure that your home address and phone number are not linked to a business. If you’re operating a business get a PO Box or UPS Store box to get a proper business address and get a separate phone number for your business. If your social security number was issued less than 24 months ago you’ll just have to wait it out and put up with a little bit of hassle from lenders requesting additional documentation to verify your identity. If your social lists you as deceased, contact the credit reporting agencies to straighten things out and prove that you’re still alive and kicking. You may have to get a letter from the social security administration stating that the social belongs to you and has never been issues for anyone else.

The most important point that we want to make is that most of these alerts are there for your safety and protection. They may cause you a headache every now and then but, if you take action, you can get these issues resolved before they cause you too much pain.

 

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

Your Credit Score Is About To Get a Shakeup

April 10, 2017 by  
Filed under Blogs, Credit Report, Credit Score

Credit

Mark this date, July 1, 2017.

This is the date when 12 million consumers could see their FICO credit scores increase and more importantly this is the date when millions of Judgments and Tax Liens will be purged and deleted from credit reports.

As part of a nationwide settlement from over 30 states, the 3 credit reporting agencies. Experian, Equifax, and TransUnion, will remove these public records from consumer credit reports if the lien or judgment does not match a minimum of 3 out 4 criteria which are name, address, date of birth, and social security number.

This does not mean that ALL judgments and tax liens are going to be deleted but, those 12 million consumers with at least 2 errors on their accounts can expect to see their scores increase about 20 points come July.

But, that’s not all, the new guidelines will also include a requirement that public records are checked and updated at least every 90 days – if the guideline isn’t followed, the judgment and tax liens are to be removed off the credit reports.

This is a big win for consumers and a huge step in the right direction toward accuracy and fairness.

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