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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

Credit Score FAQ

July 31, 2018 by  
Filed under Blogs, Credit Repair, Credit Score

faq

Credit Scores don’t have to be complicated. Here is a quick FAQ of some of the common questions consumers have about their credit scores.

What is a Credit Score?
A credit score is a 3 digit number which typically ranges from 300-850 but, can range from 250-900 or 501-990 depending on the scoring model, which is used by lenders to determine your creditworthiness for home loans, auto loans, student loans, personal loans, business loans, credit cards, and even insurance premiums. Credit Scores are aggregated from the information contained within your credit reports which are maintained by Experian, Equifax and TransUnion.

What is a FICO Score?
A FICO Score is the most popular credit scoring model used today. 90% of lending decisions are based on FICO scores. There are different FICO scoring models used by the mortgage industry, auto lending industry, insurance industry, credit card industry, etc…. There are actually 49 different FICO scores with different scoring models and variances.

Do I have more than one Credit Score?
Yes. There are dozens of different credit scores like the VantageScore v3.0, v2.0, Plus Score, TransRisk Score, Power Score, and many more including 49 different FICO scores. On top of this, your scores are calculated based on the information contained within your credit reports, of which you have 3 (Experian, Equifax, and TransUnion). So your Experian VantageScore will be different form your TransUnion VantageScore which will be different from your Equifax VantageScore.

Different Credit Scores

How are my Credit Scores calculated?

Your credit scores are calculated from the information contained in your credit reports. There are 5 main factors considered in determining your credit score.
35% – Payment History
30% – Credit Utilization
15% – Length of Credit History
10% – Mix of Credit
10% – New Credit/Inquiries

What your credit scores are made of

What is a good Credit Score?

Credit Scores typically range from 300-850 with some models ranging from 250-900 or 501-990 but, those are outliers so, let’s focus on the most common credit scoring range, 300-850.
Higher credit scores demonstrate a higher degree of creditworthiness and less risk to the lender while lower scores demonstrate a smaller degree of creditworthiness and a higher lending risk.

According to Experian, the average credit score in the US is 691 so try to get your scores above that. Here’s a chart of what the Fair Isaac Company (FICO) deems to be a good credit score.
[poor-exceptional fico score chart]

Does income factor into Credit Scores?

No. There are a myriad of factors which are used to calculate your credit score but, your income is not one of them. You can have a great credit score no matter how much your income is. Other factors that do not impact your credit scores are your age, gender, race, education, employment, address, or marital status.

What do I have to do to get a high Credit Score?

Here’s a quick list of actions that you can take to improve your credit scores.
Pay your bills on time
Maintain a low credit utilization
Limit your credit applications to 1 every 1 months
Don’t close your oldest accounts
Keep a good mix of credit

Follow these 10 Credit Commandments to increase your credit scores.

Where can I get my Credit Scores?

You can access your credit scores for free via sites like CreditKarma or CreditSesame but, keep in mind that these scores will be VantageScore v3.0. You can also get an Experian FICO score from sites like Discover but, it will be just one of the 49 FICO scoring models. The best place to get your FICO credit scores is at myFICO.com where you can access 28 different FICO 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

Quick Credit Tips

July 28, 2018 by  
Filed under Blogs, Credit Score

credit repair tips

Understanding your credit doesn’t have to be confusing. Here are 11 quick tips to help you understand your credit and get the most out of your credit scores.

Pay your bills on time
Derogatory information such as Late payments, Collections, and Charge-offs have a substantial negative impact on your credit scores.

If you have late payments
Catch up on your bills and pay them on time. Older delinquencies don’t have as much of an impact on your credit scores as much as new ones. Pay all of your bills on time for 6 straight months and you will see your credit scores improve.

Also, don’t forget to contact the creditor reporting the late payment(s) directly and request a one-time goodwill removal of the delinquency.

Paying off a collection
Paying off collections won’t remove them from your credit reports and closing an account with late payments won’t remove the derogatory information either. These past delinquencies will still factor into your credit scores.

If you’re having trouble paying your bills
Contact your creditors and set up payment plans that you can afford to catch up on your debt obligations. It probably won’t help increase your credit scores right away but, if you can pay your bills on time your scores will improve.

Keep your credit card balances low
Maxing out your credit cards will lower your credit scores. Try to keep the balance at or below a 20% credit utilization. For example, if the credit limit on your credit card is $1,000 – try to keep the balance at $200 (20%) or less.

Don’t close your oldest accounts
Keeping your oldest accounts open and active lengthens your credit history and increases your credit scores.

Don’t open too many accounts at once
Opening a lot of account in a short period of time will lower your credit scores. New accounts lower your credit scores by shortening your average age of open accounts and putting new inquiries on your credit reports. Limit yourself to one credit application every six months.

Don’t rate shop for too long
If you’re planning on buying a house, car or getting a student loan, don’t shop around for too long. Inquiries made within a week for an auto loan may appear separately but, all count as one inquiry when calculating your credit scores. Same applies to mortgages and student loans. If you’re going to shop around for the best price or interest rate, don’t drag it out and make a decision within a week.

Re-establish your credit
If you had to start over and close your accounts to get back on your feet, don’t forget to re-establish some credit by opening up a small credit card. Paying this new account on time and maintaining a low balance will help show lenders that you have turned over a new leaf and increase your credit scores.

Check your credit
Checking your credit reports yourself through annualcreditreport.com and credit monitoring sites like Credit Karma will not lower your credit scores.

Limit your Inquiries
Only apply for and open new accounts as needed. Too many inquiries will lower your 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

10 Credit Commandments

June 4, 2018 by  
Filed under Blogs, Credit Score

 

10 commandments

Your credit scores are determined by the information reporting in your credit reports which is an overview and history of the decisions that you have made while maintaining your credit.

Every decision you make to apply for a new account, open a credit card, pay your bills, charge your credit card, etc… impacts your credit scores and determines your ability to acquire credit in the future. This is why developing healthy habits is to vital maintaining and growing your credit scores. Ultimately, you’re in control of your credit scores by managing your credit responsibly.

So, let’s take a look at some healthy habits that will ensure a higher credit score.

1. Pay your bills on-time
Paying your bills on time is the single most important factor in responsibly maintaining and improving your credit scores. One late payment can drop your credit score over 100 points so pay your bills on time – every time.

2. Maintain a low Credit Utilization
The percentage of balance that you maintain on your active credit accounts in proportion to your credit limit or high credit amount typically accounts for 30% of your credit scores. It’s difficult to quickly pay down installment loans like mortgages and auto loans but, you can manage your credit card utilization. Don’t max out your credit cards, keep your credit card balances below a 20% credit utilization rate (balance/credit limit) to get the most out of your credit scores. For example, if the credit limit on your credit card is $1,000 – keep your balance at $200 or less.

3. Don’t close your oldest accounts
Length of credit history is another important factor in determining your credit scores. The longer your credit history – the better your credit scores. Length of credit history is determined in 2 parts; the age of your oldest active account and the average age of all of your active accounts. Keep growing your credit history by maintaining activity on your accounts and by not closing your oldest accounts.

4. Maintain a Mix of Credit
Lenders want to see that can be responsible for managing more than just one type of account. Maintaining a healthy mix of installment accounts (mortgage, auto loan, student loan) and revolving accounts (credit cards and department store cards) will ensure a higher credit score.

5. Limit your Inquiries
Every time you apply for credit, whether it’s a credit card, department store account, auto loan, mortgage, or any other financial instrument, an inquiry is placed on your credit report as a record of your application. Having too many inquiries on your credit reports makes you look desperate for credit and throws up a red flag for lenders. Limit your applications for credit to a maximum of one inquiry every 6 months.

6. Check your credit reports
According to a study by the National Association of State Public Interest Research Groups, 79% of all credit reports contain errors. 54% contained inaccurate personal information such as misspelled names, incorrect social security numbers, wrong dates of birth, addresses, etc…. 30% listed closed accounts as opened, 22% had duplicate accounts, 8% were missing a major trade-line such as a mortgage or auto loan, and most alarming, 25% contained serious errors that could cause consumers to be denied credit. On top of all that, identity theft is now the fastest growing crime in America so, check your credit reports often to make sure that the information being reported about you is 100% accurate and won’t cause you issues when applying for credit.

7. Protect your personal information
As already mentioned above, Identity Theft is now the fastest growing crime in America. With recent breaches to Equifax, Saks Fifth Avenue, Orbitz, Yahoo, LinkedIn, AOL, among others – you can rest assured that your private information is out there on the dark web. Be diligent about checking your credit reports of any unauthorized inquiries or accounts, check your credit card statements for any suspicious charges, change your passwords every 6 months, don’t use the same password for all of your accounts, use 2 factor authentication when available, get a shredder and don’t open any suspicious emails, click any suspicious links, or download any suspicious files. Be safe, be diligent and protect your identity and personal information.

8. Don’t Co-Sign for anyone
This is a tough one because it’s human nature for us to help those close to us but, we have seen so many cases where credit scores were ruined because of a co-signed loan. If the person your co-signing for needs a co-signer it probably means that they have not done a good job of maintaining their credit responsibly. Unforeseen circumstances like a job loss, medical issue, or personal problems can derail not only your credit but, also your friendship. So unless you’re ready and willing to take over 100% of the payments and responsibility on the loan, if the personal you’re co-signing for can’t meet the financial obligation, don’t co-sign. Protect your credit for yourself and your family.

9. Maintain an Emergency Fund
Maintaining a 3-6 month emergency reserve can save your credit and help you overcome financial difficulties brought on by job loss, medical issues, natural disasters, or relationship problems. It’s easier said than done but, start by opening up a separate bank account and designating it as your emergency fund, then, put aside 5%-10% of your income into that fund every month until you have a 3-6 month reserve to live off in case of an emergency.

10. Work on Your Credit
If you have derogatory information reporting on your credit reports, work on removing it by leveraging consumer protection laws such as the FCRA, FDCPA, and FCBA. Investigate your information with the credit reporting agencies, validate your debt, request method of verification on verified accounts, try goodwill requests and permissible purpose verification, and everything allowable by law to remove as much derogatory information from your credit reports as possible.

If you need help, CreditFirm.net has helped thousands of consumers remove negative information such as late payments, collections, charge-offs, repossessions, judgments, tax liens, etc… from their credit reports and increase 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

FICO SCORE MYTHS — DEBUNKED

May 31, 2018 by  
Filed under Blogs, Credit Score

credit facts and myths

Myth: Checking your credit will lower your credit scores
FACT: Checking your credit via credit monitoring sites like Credit Karma, Credit Sesame, etc… will not lower your credit scores. Credit monitoring sites pull your credit information via a soft inquiry which does not impact your credit scores. Applying for credit (mortgage, auto loan, credit card, etc…) causes a hard inquiry which does impact your scores.

Myth: You need to have high income to have high credit scores
FACT: Income does not play any role in determining your credit Scores.

Myth: A credit score is the same thing as a FICO score
FACT: Credit score is a general term for a number which is meant to show your creditworthiness but, credit scores are not all the same. There are dozens of different credit scoring models which offer a snapshot of your creditworthiness like VantageScores, TransRisk Scores, Plus Scores, etc… but, 90% of lending decisions are based on your FICO credit scores.
Note: Learn more about different types of credit scores.

Myth: My credit score isn’t important
FACT: Your credit scores determine your ability to qualify for a mortgage, auto loan, credit cards, student loans, and just about any other financial instrument. They also help to determine loans terms like your interest rate and down payment. People with higher credit scores end up paying a lot less than those with lower scores.

Save money with good credit

Myth: A low score will stay low forever
FACT: Credit Scores are not static, they are dynamic and change over time as the information in your credit reports changes. Good credit habits like paying your bills on time, keeping your credit utilization low, and limiting your inquiries will have a positive impact on your credit scores and increase them over time. Working on removing the derogatory information reporting in your credit file will also help increase your 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

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