Credit Education

In order to understand how we can improve your credit, you must first understand how the credit system works.

What is a Credit Score?

A credit score is a number generated by a mathematical formula that is meant to predict credit worthiness. Credit scores range from 300-850. The higher your score is, the more likely you are to get a loan. The lower your score is, the less likely you are to get a loan. Having a higher credit score can save you thousands of dollars over the life of your mortgage, auto loan, or credit card. There are a number of ways to work on improving your credit score, read the article below if more information on how credit score is determined and to read about ways to improve your credit score.

What Affects Your Credit Score?

When you hire us, we will help you to remove inaccurate, unverifiable and outdated items from your payment history. We will also show you how to maximize your debt ratio score, even if paying off credit cards is not an option.

We also have methods of helping you improve your overall credit profile with positive accounts. Most people are aware of the three credit reporting bureaus, Equifax, Experian and TransUnion. The average difference in scores between the highest and lowest of your credit scores, from the three bureaus, is 60 points. This is the result of the credit bureaus having different items on their report, which may be correct, incorrect or are not reported in full compliance with credit law. According to a recent study, nearly 80% of all credit reports have serious errors on them and this does not even include the even smaller errors for which we look.

Other Credit Improvement Recommendations

There is more than one way to improve your credit score and at the core of them all is YOU! Below are tips that you can do to help improve your credit score on your own.

Pay your bills on time

Pay all of your bills on time, every time. This includes your utility bills, mortgage and auto payments, and all of your revolving lines of credit like credit cards. Check your credit report at least once a year. You can find out how to challenge bad information on your credit report here.

How to improve credit

Never charge more than 30%

Never charge more than 30% of the available balance on any of your credit cards. Banks like to see a nice record of on-time payments, and several credit cards that are not maxed-out. If you are carrying high balances on your credit cards, then make paying them down below 30% a priority.

Credit repair tips

Do use your credit cards

Many people who make mistakes with their credit believe that the best way to fix things is to never use credit again. If you are afraid that you cannot handle your credit cards correctly then the best policy is probably this one: Run only your utility bills on your credit cards each month, and then pay the balance in full by the due date. This ensures that your utility bills get paid on time automatically, and as long as you keep the habit of paying off your credit card balance each month your score will continue to go up. Leave the credit cards locked in a safe or drawer at home.

Building Credit

Keep your accounts open as long as possible

Even if you are no longer charging on the card. The best policy is to keep those unused accounts open, blow the dust off your card every few months to make a small purchase, then pay it off. How long each of your accounts have been active is a major factor in your credit score.

Ways to build credit

Remember that this all takes time

Following the above steps consistently over a long period of time will increase your credit score and allow you to qualify for better loans and lower interest rates. Improving your credit score does not happen overnight, so if you do these things for a few months and do not see a large increase in your score, do not give up. They are all habits that you will want to maintain throughout your life, as they will help you to keep your finances and lines of credit under control.

What is credit score

How Long Will Certain Items Remain On A Credit File?

Delinquencies

(30- 180 days): A delinquency may remain on file for seven years; from the date of the initial missed payment.

Collection Accounts

May remain seven years from the date of the initial missed payment that led to the collection (the original delinquency date).

Charge-off Accounts

When a delinquent account is sent to a collections company. This will remain for seven years from the date of the initial missed payment that led to the charge-off (the original delinquency date), even if payments are later made on the charge-off account.

Closed Accounts

Closed accounts are no longer available for further use and may or may not have a zero balance. Closed accounts with delinquencies remain for seven years from the date they are reported closed, whether closed by the creditor or by the consumer. However, the delinquency notation will be removed seven years after the delinquency occurred when pertaining to late payments. Positive closed accounts continue to be reported for ten years from the closing date.

Lost Credit Card

If there are no delinquencies, credit cards reported as lost will continue to be listed for two years from the date the creditor is contacted. Delinquent payments that occurred before the card was lost are reported for seven years.

Bankruptcy

Chapters 7, 11, and 12 will remain on one's credit report for ten years from the filing date. A Chapter 13 bankruptcy is reported for seven years from the filing date. Accounts included in a bankruptcy will remain for seven years from the date reported as included in the bankruptcy.

Judgments

Remain seven years from the date filed.

City, County, State, and Federal Tax Liens

Unpaid tax liens remain for fifteen years from the filing date. A paid tax lien will remain on one's score for 10 years from the date of payment.

Inquiries

Most inquiries listed on one's credit report will remain for two years. All inquiries must remain for a minimum of one year from the date the inquiry was made. Some inquiries, such as employment or pre-approved offers of credit, will show only on a personal credit report pulled by you.

Information that Should Not Be In A Credit Report

  • Medical information (unless you provide consent)
  • Notice of bankruptcy (Chapter 11) more than ten years old
  • Debts (including delinquent child support payments) more than seven years old

Age, marital status, or race (if requested from a current or prospective employer)