Guide to Improve Your Credit Score on Your Own

If you are planning to buy a home in a couple of years, applying for a mortgage must be there in your mind. Other than your monthly income, the two major factors that can decide the type of house you can buy are down payment and rate of interest. Both of these are linked to one thing – your credit score.

Improving your credit score has many benefits. But can you do it your own? Yes. This article will guide you on how to fix your credit score yourself.

Understand your credit score

You first need to understand what the constituents of your credit score are. The following table will help you understand that:

No	Categories	Description	Weight (%)
1.	Payment History	It contains the history of the payments you make to your banks/lenders	35
2.	Credit Utilization	The debt you are carrying with respect to your credit limit	30
3.	Length of credit history	The length of time you have had a credit account	15
4.	Types of credit	The different varieties of credit you have	10
5.	Credit Inquiries	Number of Inquiries done by a lender/creditor	10

Get your credit report

You can get your credit score once a year for free from each of the three credit rating agencies. To get this report you need to visit the website AnnualCreditReport.com. Credit scores are calculated using this data. Note that this report does not contain your credit score, but has all the other information that you will need to improve your credit score.

Review your credit report

Once you get this report, go through all the details it contains line-by-line. It may contain some information that you find incorrect. You can use a highlighter to mark that information.

Resolve discrepancies

When a credit report arrives, you will find some instructions along with it that you will need to follow if there’s a dispute. You should mail them relevant data that you have. Credit bureaus usually take 30 to 45 days to investigate and respond to your dispute.

You can also send this information to the bank/lender who had listed the concerned information on your report. They are also legally obliged to investigate on your request. Keep paper trails of these conversations with you. These paper trails can be helpful to you in your subsequent course of action.

Note: If you find something you cannot relate to and are completely unaware of, you could be a victim of Identity theft. To report such incidences, you should visit the website IdentityTheft.gov.

Ways to improve your credit score

If you’re wondering how to fix credit score on your own, here are a few tips for you:

Try to keep your credit utilization under 10% of its limit.
Pay all your bills/installments on time.
3.Get different types of credit viz. installment type (i.e. mortgage, car loan) and revolving type (credit cards and lines of credit)
Don’t close your good credit card; this will hurt your credit utilization and consequently your credit score.

If you cannot get a credit card, you can apply for secured credit card and keep a good credit history on that account. This will improve your credit score. Once negative information gets into your credit report it will take 7 years before it will get off.

You cannot drastically improve your credit score within 30 days. It is important to follow good credit habits. If you take the above-mentioned measures, it will surely help you to build a good credit score.

To get professional help on improving your credit score, you can contact Keycreditrepair.com and get a Sign Up for $0 Today.

Old Debt – Beware of resetting the clock

Everyone makes mistakes, but when mistakes are committed pertaining to financial decisions, the consequences have a tendency to be more far reaching. For instance, things like foreclosure, bankruptcy and old debt can stay on your credit report and impact your credit score for many years before it is

essentially erased from your record. While it’s possible to enact credit repair strategies while you wait for the clock to expire on these negatives, your score likely won’t see the boost that you’re looking for until time expires on the debt. It’s important for consumers to be aware of the statute of limitations pertaining to debt in their particular state – but it’s also just as important for consumers to be aware of a variety of no-no’s that could potentially

restart the clock on old debt, keeping it on your record for many more years. This post will take a look at several of these things to stay away from so you don’t restart the clock on old debt that is soon to expire.

How Not to Reset the Clock on Old Debt

1. Watch the Clock: There are two “clocks” you need to be aware of – the statute of limitations clock and the credit report clock. The former varies by state, is usually anywhere from three to six years and basically sets a timeframe for how long collections may be forced on a debt. The credit report clock dictates how long old debt can stay on your record, which is seven years.

2. Know the Default Date: Seven years after you’ve defaulted on a debt, it must come off your credit report. Be sure you know this date and build good credit, as your score will likely progress the closer you get to the seven year mark. Judgments are the exception, as they can stay on your report up to seven years from the filing date.

3. Be Careful with Collectors: A debt collector’s job is to get you to settle or make payments on a debt. Some try to accomplish this by any means necessary. Be careful what you say if you choose to speak with them, as just an admittance that the debt is yours can essentially tick the clock back to the start.

4. Tell Collectors to Stop: If you’re being pestered by debt collectors, it’s your right to tell them to stop. This can be an ideal way to avoid a possible slip up – just be sure not to admit the debt is yours when you contact them.

5. Be Wary of Payment Options: Many collectors will offer the option of paying off a debt for a lesser amount than what you actually owe. Be wary of paying off debt and always be sure you have confirmation that it was paid in full if you proceed with such an option.

6. Hire a Lawyer: If you ever believe you’re in the wrong, seek legal representation.

5 Ways Improving Your Credit Score Can Help Your Business

On an individual level, having a good credit score typically translates to lower interest rates on credit cards, mortgage loans and auto loans. This translates to a financial savings, especially when it comes to long-term loans like auto and home loans. The same is true when it comes to your business – good credit can be the lifeline to building a great company all while helping out your bottom line. Here’s a closer look at how having a good credit score can behoove your business:

5 Ways A Great Credit Score Helps Your Business

If your credit score isn’t up to snuff, here’s a look at why taking the credit repair steps to improve it can prove to be so valuable for your business:

1. Lower interest rates: Just as a higher score gets you lower interest rates on auto and home loans, it can get you lower interest rates on business loans as well. Improve your score today by making on time payments and keeping your credit utilization ratio at or under 30 percent.

2. Fast approval: When it comes to running a business, you usually can’t wait long periods of time for loans to be approved and funding to come through – you need it immediately to stay solvent. Good credit ensures faster approval compared to having shaky credit.

3. More options: In addition to fast loan approval and low interest rates, a good credit score will also mean you’ll have more borrowing options.

4. Groundwork for the future: It’s one thing to make on time payments and build positive credit history with a lender. It’s another thing to continue to build your credit score in other ways throughout the duration of the loan, something that can leave lenders with a very positive impression of your consumer behavior and overall operations. This goodwill can pay big dividends in the future when lenders recognize how reliable of a consumer you are. There’s a good chance that they won’t think twice when it comes to improving future loan applications.

5. Competitive advantage: We’ve already established how a good credit score can save you money on interest rates. And this money that is saved on financing can be utilized in a number of ways. For instance, you can pass the savings on to your customers to offer a less expensive product than your competitors. Or you could keep prices steady and improve your profit margins to expand and grow your company. That’s a choice for you to make, but it all starts with good business credit. If it’s not in good shape, make the steps to start improving it today.

Medical Debt: Accurate vs. Inaccurate

It’s recommended that consumers pull their credit reports at least once a year. Why? Because up to 20 percent of all Americans are estimated to have some sort of error on their report. Checking the report and taking the necessary corrective action is really the only way to have any issues resolved.

But according to a recent report in The New York Times, credit reports aren’t the only credit-related entity that’s problematic for consumers. In fact, The Times states that medical debt collectors are becoming a routine nuisance – and up to two-thirds of all who have complained to regulators about them say that they don’t owe the money that’s being asked of them.

Noting this, what can consumers do to decipher the difference between accurately and inaccurately reported medical debt? Here’s a look:

Medical Debt: Accurate vs. Inaccurate

The Times says that medical debt issues are the second largest debt-related complaint that is issued, only being topped by credit card complaints. Most experts state that issues related to medical debt are largely due to the current health care system as well as consumer confusion. However, The Times article also states that overaggressive debt collectors and debt collectors going after the wrong people can also pose an issue in medical debt collections. Here’s a look at how to better gauge if the medical debt you’re being asked to pay is accurate:

Keep tabs on your records and keep notices on any treatments, office visits or hospital stays, or notices that you’ve received and paid. If you’re ever in doubt, contact your health insurance provider to better understand what your plan covers as well as what your deductible and co-insurance is.
Contacted by debt collectors? Take note of the communication and refrain from making any immediate payments until you can contact your doctor’s office or insurance provider to understand whether you’re on the hook for said debt. If the collector is being abusive or acting illegally, immediately file a complaint with the Consumer Financial Protection Bureau.
If you do owe toward a treatment or procedure, don’t pay with a credit card. The interest you’ll pay on the debt can hurt you more long term.
Check your credit report annually: As we noted in the opening, doing so can help consumers sniff out any errors before they have a chance to hurt their purchasing power when applying for a loan or credit card, for instance. In the case of medical debt, it’s common for debt collectors to put small amounts owed on your credit report. However, these usually small amounts aren’t really worth it to aggressively go after for the collector, so it’ll just sit there. Noting this, it could blindside you.

The latest scoring system from FICO downplays the significance of medical debt as it translates to your credit score, so you don’t have to worry about a major impact to your purchasing power if you do need to settle a debt. It is important, however, to understand and get medical debt issues resolved.

5 Fascinating Things You (Probably) Didn’t Know About Credit Scores

You’ve heard the old adage about how “knowledge is power,” and perhaps nothing demonstrates this saying more than when it comes to knowing about your credit information. Yes, the more you know about these details of your consumer history and you’re able to make better decisions when it comes to your future behavior.

First and foremost, it’s important to know your credit score, but it’s never a bad idea to brush up on some of the more intricate details that shape your score.

Here’s a look at five things you probably didn’t know about credit scores:

5 Interesting Credit Score Facts

The big 5: Do you know the five factors that go into calculating your credit score? You should! Payment history is the largest single factor, worth 35 percent of your score. It validates the importance of paying your bills on time. Credit utilization ratio is next, at 30 percent. For a good lender-friendly ratio, keep it at 30 percent or less. Length of credit history factors into 15 percent of the score, and new credit and your credit mix each account for 10 percent of the score.
700: That’s the credit score of the average U.S. adult. A score of 700 is considered to be in the “good” category. This “good” category applies to scores between 670 and 739.
Do you know your score? If you don’t know your score, you aren’t alone. In fact, it’s estimated that three out of every five Americans don’t know what their credit score is. That’s 60 percent of the country, and there’s really no excuse for it based on how important that three-digit number is to your purchasing power and how easy it has become to access.
Credit report doesn’t equal credit score: Up to 20 percent of all credit reports contain some sort of error. That’s why it’s a good idea to utilize your right to obtain a free annual credit report. But contrary to what many believe, checking your credit report doesn’t permit you access to your actual credit score. We know it seems odd, but that’s the way it works. To get your score, check your credit card statements, subscribe to a free credit check website or talk to your bank or credit union.
Late payments can do terrible things to your score: As we noted above, payment history is the largest consideration factor when it comes to calculating a credit score. Noting this, it probably doesn’t surprise you that late or skipped payments don’t bode well for your score. But what you may be surprised to learn is just how hurtful they can be. In fact, a 30-day late payment could cause your credit score to dip an entire 100 points! The lesson: Pay your bills on time!

Credit Inquiries – Can They Drop Your Credit Score?

Spring has sprung, which means the real estate market is heating up and many consumers throughout the United States will be taking advantage of the uptick in home inventory to search for that new home. But for the vast majority of Americans, in order to finance any purchase as significant as a new home, a mortgage loan is necessary.

At the same time, however, it’s wise to shop around between lenders to see who can offer you the lowest interest rate so that you can save the most long-term over the loan terms. In order to do this, lenders need to pull your credit information.
This has a tendency to make consumers uneasy, simply because there’s a misconception out there that when lenders pull credit scores and credit reports, it can negatively impact your overall score.
That’s not the case, just so long as you meet the proper time criteria. Let us explain:

The 30-Day Rule

Not too long ago, if you wanted to buy a home, you’d just call up various mortgage lenders to see what they were offering when it came to interest rates. Times have obviously changed. Now, we’re at the point where a full application needs to be filed – complete with a credit check, income assessment, etc. – as a means of getting preapproved. So, say you file an application with five different lenders. Will all the credit inquiries that occur cause your score to drop?

The answer is “no,” and here’s why: Because those who are shopping mortgage lenders are likely to consider more than one lender, any credit scores and credit reports pulled for such purposes will be ignored so long as they all occur within a 30-day period. It’s only natural for consumers to try to secure the best interest rate possible on such a large purchase, so there’s an exception to be made in such a case. While we’ve used mortgage lending in this example, the same is also true for auto lending and student loans – two other respective fairly large purchases that consumers may elect to shop around for rates pertaining to.

So for those of you out there concerned with what will happen to your credit score – and the possible credit repair you may have to administer – should you shop around when it comes to lenders, just make sure that any of this shopping around occurs within the same 30-day period and your score won’t be impacted in any way.

Go ahead and chase that dream home. You’re not going to be punished for getting preapproved by more than one lender. Just be sure to meet the time requirements. Check out this video for more information.

Tax Liens, Judgments Could Be Omitted from Credit Reports in a Future

For tax liens The Consumer Financial Protection Bureau (CFPB) has been winning a lot of battles for the people lately. Aside from socking Equifax and TransUnion with fines for deceiving consumers back in January. More recently, it hit Experian with a $3 million fine for the same thing in March. Now, it’s recently championed an effort to change the way tax liens and judgments are reported on your credit record. It’s a major shakeup when it comes to credit reporting.

Specifically, per a report in the Wall Street Journal, Experian, Equifax and TransUnion – the three major credit reporting agencies – will soon be readjusting their respective credit reporting models to omit tax liens and judgments. It’s a move that could help out millions of Americans when it comes taking control of their finances in the future.

What This Means

This move looks to help out millions of consumers and could very well raise the overall average credit score nationwide. This news is especially significant when you consider how crippling tax liens and judgments currently are to most consumers. Presently, tax liens and judgments, even if they’ve been resolved, can stay on a credit report for up to 10 years. That’s right, even if they’ve been paid off, a consumer’s best bet is to get it released and then petition the credit agencies to remove it from their record to avoid extensive credit repair.

Unresolved liens and judgments stay on a credit report for 15 years.

To be fair, there’s still some things that we don’t yet know when it comes to this news. For instance, will consumers have to petition the agencies to have liens and judgments removed? Or will the agencies perform this automatically? That’s an unknown. What’s not an unknown, however, is how positive a move like this can be for consumers.

Not Everyone’s Happy About It

While consumers should be welcoming this news, not everyone is happy about it. For instance, this report is putting lenders a little bit on edge. Why? Simple – it provides less data for them to assess consumer risk. When lenders make the decision on whether or not to approve a loan, it becomes a question largely of how reliable of a consumer they’re working with. A tax lien or judgment on one’s credit report would certainly factor into their decision, and being that it can take up to 15 years for such to be removed from an individual’s credit report, it provides lenders with more of a comprehensive history of consumer behavior. This news, obviously, alters that, giving lenders one less thing to ultimately analyze. In a worst-case-scenario situation, it could wind up burning a lender in the long run.

How to Build Your Credit Score Back After Foreclosure or Short Sale?

How to Build Your Credit Score Back Up After Foreclosure or Short Sale?

Credit Score, Foreclosure, Short Sale. Credit Score after Foreclosure or Short Sale. So you’ve foreclosed on a home or had to sell for less than what you owed on the home? You probably think you’re doomed as a consumer moving forward. And while a short sale or foreclosure is never something that you want to have on your credit report, neither is a be-all, end-all when it comes to purchasing power. However, it should go without saying that either a foreclosure or short sale will require consumers to enact some credit repair.

How to Build Your Credit Score After Foreclosure or Short Sale

Credit Score after foreclosure. Just how to you go about rebuilding credit after a short sale or foreclosure? Here’s a closer look:

Rebuilding Credit After Foreclosure/Short Sale

The first thing that you should do after a foreclosure or short sale is put it in the past. Yes, it happened. Yes, it’s unfortunate. Yes, it’s not going to look great on your credit report and it’s going to hurt your credit score. But like we said in the opening, it’s not a be-all, end-all. So put it in the past. It’s over with. While the short sale or foreclosure will stay on your credit report as a negative part of your history, that doesn’t mean that you can’t build positive activity beyond that. The goal for a consumer following a short sale or foreclosure is to build positive activity to make the negative on the credit report look like nothing more than a blip on the radar. Here’s how to do it:

Immediately work to start (or continue) at least three positive lines of credit: Whether it’s a secure credit card, personal loan or some other type of account, these lines of credit are all ideal opportunities to build positive activity. Since the FICO score weighs consumer behavior on making on time payments, credit history and credit utilization, you can put the negative of a foreclosure or short sale in the past by building positive activity with at least three accounts. Perhaps you have a healthy account or two opened? Great! Keep up the good work with it.
How to build positive credit: Like we hinted at in the last bullet point, the best way to build positive credit is to make on-time payments and keep balances low.

If you follow the two steps above following a foreclosure or short sale, it’s not uncommon to see a significant improvement in your credit score within as little as six months. In fact, it’s not out of the realm of possibility for those with credit scores in the low 500s to see their scores increase into the high 600s or even the 700s after a foreclosure or short sale by building positive activity. Just remember, it’s not a quick fix – it take a little bit of time.

Getting preapproved for a mortgage loan

Spring has sprung, and beyond just the greening of grass, warming temperatures and longer days, it’s also a period of the year that sees a significant uptick in real estate activity. Yes, with an increase in overall inventory come spring, the season is an ideal one for buyers on the hunt for their next home. But before you can buy, you need to get preapproved mortgage. Unfortunately, getting preapproved is easier for some consumers than it is for others. Some consumers may need to enact some credit repair tactics to get their credit score where it needs to be for home buying

Improving Credit Scores for Preapproval

If your credit score isn’t up to snuff and you don’t want to wait months to repair it, there are some things that you can do now that may improve your score faster, assuming that your score was dinged because of something minor, like a late payment. More sever credit mishaps like defaulted payments, bankruptcies and foreclosures will obviously require much more time for consumers to repair, but there is hope to eliminate something minor like a late payment that could be preventing you from getting preapproved for that mortgage loan. Here’s what to do:

Act quick: Start by contacting the company that reported the late payment and explain the situation. Perhaps you thought you made the payment, but there was an online bill error. Or maybe it was an honest mistake on your part and you didn’t pay the bill in full. Regardless of who – or what – is at fault, come clean and explain the situation. You may even choose to enact a one-time goodwill intervention, where a company will review the case, analyze your credit and make the call on whether or not to reverse the decision. Remember, lenders want to keep your business, so if you work together with them, your chances are good.
Contact the credit reporting agencies: If you don’t get anywhere with the lender, consider writing the credit reporting agencies. Explain the scenario to them, and they’ll conduct a 30-day investigation to determine whether or not the lender’s decision should be reversed. This method may take a little longer than working with the lender, but if the agency rules in your favor, it can help improve your FICO score to the point where you can get preapproved.

Unfortunately, some mortgage consumers don’t have great credit and won’t be able to fix their issues by contacting either their lender or the credit reporting agencies to have the issue resolved. If this is the case, the consumer’s best bet is to start establishing good financial behavior. This includes making on time payments and keeping low balances on credit cards, just to name a few.

Here’s How 30% of Americans Are Putting Their Credit at Risk

Say you have great credit or no credit risk. You usually pay off your credit card – or minimally have your debt-to-credit ratio at or below 30 percent. You’ve always paid your bills on time. You have solid credit history. So when you head in to the lender’s office to get pre-approved for your dream home, you shouldn’t have anything to worry about, right? You should be pre-approved no problem and ready to hit the trail house hunting.

But then you get a rude awakening when you meet with the lender – your credit score isn’t in the excellent shape you thought it was, and it’s going to really limit your home buying status.

What the heck happened? For many Americans, the aforementioned scenario could have been prevented by just checking their credit report.

That’s right, mistakes happen. In fact, it’s estimated that up to 20 percent of all Americans have some sort of error on their credit report. It’s why most professionals suggest Americans check their credit reports at least once a year, as it’s really the only way to detect errors and then take the proper steps to dispute said errors so that your credit score can return to where it should be.

Common Credit Report Errors and Credit Risk

A WalletHub study estimates that as many as 37 percent of all Americans haven’t checked their credit report in over a year, and that 16 percent of all Americans have never checked their credit report. That’s not good, as the credit bureaus allow consumers to pull it for free once a year. Why not take advantage of the opportunity? Failure to do so could cause you to miss detecting significant errors, such as:

Mix ups: It’s not uncommon for the credit reporting bureaus to mix up information for consumers that share the same surname. So, for instance, if your name is Joe Smith and Mike Smith from California defaulted on an auto loan, there’s the off chance that your surnames could cause confusion when this information is reported.
Incorrect data: Sometimes, lenders or banks just make mistakes and report incorrect data about your history to the bureaus. These can usually be easily corrected by just showing documentation of your loan or account status.
Duplicates: Another common error is for the same account to be listed twice on your credit report. The big credit risk issue related with this mistake is that it will likely impact your credit utilization, or the debt-to-credit ratio. Like we mentioned in the opening, if this ratio is at or less than 30 percent, then you’re likely to have a higher credit score. Consumers that utilize more of their allotted debt-to-credit ratio will likely have a lower credit score.

Disputing Errors

As soon as you notice an error on your credit report, take action to dispute it. Disputes can either be carried out with the credit bureau or with the lender/bank involved that reported the information to the bureau. Simply gather documentation supporting your dispute and submit it to the respective party. By law, you will receive a response within 30 days from the time the party receives it. This response will confirm removal of the incorrect information, insist that they’re correct or ask for more information on credit risk.