Archive for November 12th, 2008
Nov
12
Credit Repair and the Holiday Season
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Jim Kemish asked:
Credit Repair and Holiday Spending
Credit repair is all about restoring and improving your credit. The holiday season makes financial demands on us that can send our credit scores into a tailspin if we are not careful. From Thanksgiving through New Year Day many of us find ourselves spending money faster than any other time of the year, which can create a potential credit repair challenge.
Credit Repair Facts
Parties, family dinners, gifts, travel, and even home decoration quickly add up. By the time our January credit card bill arrives we can rack up an impressive and daunting balance. In the world of credit repair, knowledge is power, so let’s take a look at the facts and see if there is a way to mitigate the collateral damage.
Revolving Debt is Not Always Bad
There is really nothing wrong with revolving debt. Credit cards can be handy, and on occasion they can be a lifesaver. Life is full of unexpected surprises. The car may need repairs, the refrigerator might break down; the list of possible surprises is endless. If you don’t have reserves, or just want to manage your cash flow, credit cards can be a convenient resource.
When Every Point Counts
The problem with revolving debt arises when it impacts your credit score in a moment that you need it for a major purchase. Many people turn to credit repair in these situations for urgent help. If you are getting a mortgage you should be aware that every point on your credit score can affect your interest rate. Automobile financing is also credit score sensitive.
Credit Repair and the Right Score
If you are going to benchmark your scores for credit repair purposes you need to be aware of the different credit scores available. The credit scores that lenders use when underwriting your loans are called FICO scores. FICO is an acronym of Fair Isaac Corp, the developer of the credit scoring model.
A Caution about Bureau Scores
Credit bureaus do not sell FICO scores directly to consumers. The credit scores that you can purchase from the credit bureaus and their army of internet vendors are not the scores used by lenders and often differ by 100 points or more. These scores can provide useful information, but are of less practical use for your credit repair.
Credit Repair and Revolving Debt
If you want to purchase your genuine FICO scores you need to visit MyFico.com, the website of Fair Isaac Corp. All three scores currently cost approximately $50 combined. The FICO scoring model puts significant emphasis on your revolving debt. The most recent release of the scoring model acknowledges five different levels of card usage: 20, 40, 60, 80, and 100 percent.
Balance Up Scores Down
The more of your available limit you use, the more impact it will have on your scores. You should think of a balance between 40 and 60 percent of your total available limit as neutral to your credit scores. If your balance is over 60 percent your score will fall. Over 80 percent, your score may fall up to 50 points depending on the overall strength of your other credit, and if you max out your balance expect to lose over 100 points; this is credit repair trouble.
Balance Down Scores Up
Conversely, the lower your balance, the better your score will be. If your balance is below 40 percent you will get bonus points, and below 20 percent you will be optimizing your score. If you need your credit to be at its absolute best try to reduce your credit card balances below 20 percent of your available limit. This can produce credit repair magic.
Allow Enough Time
Here is some holiday credit repair cheer. If you run up your balances, don’t worry. As soon as you pay down your cards your scores will rebound as if nothing happened. If you do not need your scores anytime soon don’t worry about your balances. Spend as necessary, but beware that when you need your scores it can take 60 days for the credit bureaus to report the new reduced balance, depending on the reporting cycle of the particular card issuer.
Easy Post Holiday Credit Repair
Have fun during the holidays, and do what you need to do. But be aware that when the season is over, if and when you need your credit scores to be at their best you will want to put your credit repair plan in action and pay those balances down as much as possible. Happy holidays!
Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.
Credit Repair and Holiday Spending
Credit repair is all about restoring and improving your credit. The holiday season makes financial demands on us that can send our credit scores into a tailspin if we are not careful. From Thanksgiving through New Year Day many of us find ourselves spending money faster than any other time of the year, which can create a potential credit repair challenge.
Credit Repair Facts
Parties, family dinners, gifts, travel, and even home decoration quickly add up. By the time our January credit card bill arrives we can rack up an impressive and daunting balance. In the world of credit repair, knowledge is power, so let’s take a look at the facts and see if there is a way to mitigate the collateral damage.
Revolving Debt is Not Always Bad
There is really nothing wrong with revolving debt. Credit cards can be handy, and on occasion they can be a lifesaver. Life is full of unexpected surprises. The car may need repairs, the refrigerator might break down; the list of possible surprises is endless. If you don’t have reserves, or just want to manage your cash flow, credit cards can be a convenient resource.
When Every Point Counts
The problem with revolving debt arises when it impacts your credit score in a moment that you need it for a major purchase. Many people turn to credit repair in these situations for urgent help. If you are getting a mortgage you should be aware that every point on your credit score can affect your interest rate. Automobile financing is also credit score sensitive.
Credit Repair and the Right Score
If you are going to benchmark your scores for credit repair purposes you need to be aware of the different credit scores available. The credit scores that lenders use when underwriting your loans are called FICO scores. FICO is an acronym of Fair Isaac Corp, the developer of the credit scoring model.
A Caution about Bureau Scores
Credit bureaus do not sell FICO scores directly to consumers. The credit scores that you can purchase from the credit bureaus and their army of internet vendors are not the scores used by lenders and often differ by 100 points or more. These scores can provide useful information, but are of less practical use for your credit repair.
Credit Repair and Revolving Debt
If you want to purchase your genuine FICO scores you need to visit MyFico.com, the website of Fair Isaac Corp. All three scores currently cost approximately $50 combined. The FICO scoring model puts significant emphasis on your revolving debt. The most recent release of the scoring model acknowledges five different levels of card usage: 20, 40, 60, 80, and 100 percent.
Balance Up Scores Down
The more of your available limit you use, the more impact it will have on your scores. You should think of a balance between 40 and 60 percent of your total available limit as neutral to your credit scores. If your balance is over 60 percent your score will fall. Over 80 percent, your score may fall up to 50 points depending on the overall strength of your other credit, and if you max out your balance expect to lose over 100 points; this is credit repair trouble.
Balance Down Scores Up
Conversely, the lower your balance, the better your score will be. If your balance is below 40 percent you will get bonus points, and below 20 percent you will be optimizing your score. If you need your credit to be at its absolute best try to reduce your credit card balances below 20 percent of your available limit. This can produce credit repair magic.
Allow Enough Time
Here is some holiday credit repair cheer. If you run up your balances, don’t worry. As soon as you pay down your cards your scores will rebound as if nothing happened. If you do not need your scores anytime soon don’t worry about your balances. Spend as necessary, but beware that when you need your scores it can take 60 days for the credit bureaus to report the new reduced balance, depending on the reporting cycle of the particular card issuer.
Easy Post Holiday Credit Repair
Have fun during the holidays, and do what you need to do. But be aware that when the season is over, if and when you need your credit scores to be at their best you will want to put your credit repair plan in action and pay those balances down as much as possible. Happy holidays!
Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.
Nov
12
Credit Repair and the Secret to Rebuilding Your Credit
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Jim Kemish asked:
Credit Repair Everything Counts
Credit repair is not complicated. Your credit scores reflect the content of your credit report, both the positive as well as the negative. Many people in credit repair programs are so focused on the negative that they neglect the positive. No matter how effective you are at cleaning up derogatory information on your credit report, unless you take the time to build new positive credit your credit repair effort will languish.
Credit Repair Logic
The logic is easy. Your credit scores are intended to reflect the amount of risk a lender will face when lending you money. In the credit repair process you should think of your credit score as an impartial witness of your life, judging your ability and willingness to meet your obligations. The best way to impress this impartial witness is to offer proof of your willingness each and every month.
Revolving Credit Rules
The most powerful way you can offer proof of your credit worthiness and influence your credit repair progress quickly is with the proper use of revolving credit. If you don’t have any open credit cards, now is the time to open them. If your credit is currently too weak to get regular unsecured credit cards, just get secured cards. It’s easy and will do the trick.
Credit Repair and Secured Credit Cards
Secured credit cards are every bit as helpful for your credit repair as regular unsecured cards. It does not matter if the limit on these new cards is miniscule. Your credit scores will get the same benefit from a little secured card as it will from a high limit unsecured card, as long as you manage it in the right way.
Credit Card Management
Credit card management for score optimization is not difficult, but unless you know what to do mistakes are likely, and your credit repair project may even suffer when it could have easily succeeded. Timely payments are essential of course, but the real trick to credit repair success is to understand the relationship between your balance and the limit on the card.
Your Scores Are In Your Hands
The impact of your credit cards on your credit repair will depend almost entirely on your balances. This is always the case, but is even more important during the first year after a card is open. There are five ratios that will trigger score changes; 20, 40, 60, 80, and 100 percent usage. Sixty percent usage of a card will have a neutral effect, the two tiers below will increase your scores, and the two tiers above will reduce your scores. Don’t underestimate the impact; maxing out a new card can knock 150 points from your scores.
Credit Repair with the Right Credit
There are a few other important factors to consider when rebuilding credit. Not all credit cards are equal. Store cards are of little value for your credit repair. For undisclosed reasons, the geniuses behind the credit scoring formula have downgraded the benefit that accrues from store cards, and amplified the harm that can result from having them. Likely reasons include the fact that store cards are easier to get, usually have higher interest rates, and consequently may be an indicator of poor judgment on the part of the consumer. Hey, I’m just reporting the news! Do yourself a favor and stick with MasterCard, Visa, Amex, and Discover.
Your Credit is Alive
When it comes to credit repair there is no good substitute for new revolving debt. A new auto loan is helpful, but will not have the impact that a credit card will have. Credit cards are emphasized because they are open-ended and alive; each month they report they can reflect something new about your financial life. If you keep your balance low and make your payments on time it will tell the credit scoring model that you are living conservatively and within your means. If you max out a card it is interpreted as a warning of budgetary strain and potential default.
You are Not Alone
Credit repair is not a difficult process, but it requires a bit of know-how and even a dash of finesse. If you take your time to plan the credit repair process you will succeed and see your efforts rewarded beyond your expectations. And always remember that help is available. If you are in doubt pick up the phone and call a credit repair professional. You are not alone!
Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.
Credit Repair Everything Counts
Credit repair is not complicated. Your credit scores reflect the content of your credit report, both the positive as well as the negative. Many people in credit repair programs are so focused on the negative that they neglect the positive. No matter how effective you are at cleaning up derogatory information on your credit report, unless you take the time to build new positive credit your credit repair effort will languish.
Credit Repair Logic
The logic is easy. Your credit scores are intended to reflect the amount of risk a lender will face when lending you money. In the credit repair process you should think of your credit score as an impartial witness of your life, judging your ability and willingness to meet your obligations. The best way to impress this impartial witness is to offer proof of your willingness each and every month.
Revolving Credit Rules
The most powerful way you can offer proof of your credit worthiness and influence your credit repair progress quickly is with the proper use of revolving credit. If you don’t have any open credit cards, now is the time to open them. If your credit is currently too weak to get regular unsecured credit cards, just get secured cards. It’s easy and will do the trick.
Credit Repair and Secured Credit Cards
Secured credit cards are every bit as helpful for your credit repair as regular unsecured cards. It does not matter if the limit on these new cards is miniscule. Your credit scores will get the same benefit from a little secured card as it will from a high limit unsecured card, as long as you manage it in the right way.
Credit Card Management
Credit card management for score optimization is not difficult, but unless you know what to do mistakes are likely, and your credit repair project may even suffer when it could have easily succeeded. Timely payments are essential of course, but the real trick to credit repair success is to understand the relationship between your balance and the limit on the card.
Your Scores Are In Your Hands
The impact of your credit cards on your credit repair will depend almost entirely on your balances. This is always the case, but is even more important during the first year after a card is open. There are five ratios that will trigger score changes; 20, 40, 60, 80, and 100 percent usage. Sixty percent usage of a card will have a neutral effect, the two tiers below will increase your scores, and the two tiers above will reduce your scores. Don’t underestimate the impact; maxing out a new card can knock 150 points from your scores.
Credit Repair with the Right Credit
There are a few other important factors to consider when rebuilding credit. Not all credit cards are equal. Store cards are of little value for your credit repair. For undisclosed reasons, the geniuses behind the credit scoring formula have downgraded the benefit that accrues from store cards, and amplified the harm that can result from having them. Likely reasons include the fact that store cards are easier to get, usually have higher interest rates, and consequently may be an indicator of poor judgment on the part of the consumer. Hey, I’m just reporting the news! Do yourself a favor and stick with MasterCard, Visa, Amex, and Discover.
Your Credit is Alive
When it comes to credit repair there is no good substitute for new revolving debt. A new auto loan is helpful, but will not have the impact that a credit card will have. Credit cards are emphasized because they are open-ended and alive; each month they report they can reflect something new about your financial life. If you keep your balance low and make your payments on time it will tell the credit scoring model that you are living conservatively and within your means. If you max out a card it is interpreted as a warning of budgetary strain and potential default.
You are Not Alone
Credit repair is not a difficult process, but it requires a bit of know-how and even a dash of finesse. If you take your time to plan the credit repair process you will succeed and see your efforts rewarded beyond your expectations. And always remember that help is available. If you are in doubt pick up the phone and call a credit repair professional. You are not alone!
Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.
Nov
12
Finding the Right Credit Repair Company
Posted by: | Comments
Christina Costa asked:
If you have decided to fix your bad credit, there are credit repair companies that can help. This is a big decision and not one you should take lightly. On average, a credit repair company will charge you a few hundred dollars and their program usually takes a year to complete.
You don’t want to pick the wrong company and find yourself deeper in debt and nowhere closer to improving your credit. On the other hand, if you find a great company to help you that might be one of the smartest financial decisions you can make!
Let’s first of all take a look at what you should hope a credit repair service will do for you. Take a look at your credit and ask yourself what you think needs to improve. Credit repair goes beyond disputes with your credit companies and the credit bureaus.
Credit repair has been seen as something that is repairing the credit report. Now, working to repair your bad credit can also help to fix your credit report. You have rights under the Fair Credit Reporting Act to dispute any items that you feel are inaccurate.
This part of repairing your credit has been very beneficial to people who have incomplete or inaccurate information on their credit reports. This will of course only help your credit score once you get the items corrected.
This is just the beginning, repairing your credit. Although some people are not satisfied with just working to correct their credit reports. If you find a reputable credit repair company then they should also work with your creditors to have them stop reporting negative accounts.
Another thing they should do for you is contact collection agencies to have them stop reporting negative accounts. Some credit repair companies will even dispute some debts reported and find out how legitimate those claims really are.
Now, it depends on each individual credit situation just how well a credit repair company can help you. Some people might only want to get help on fixing their credit reports, while others need more extensive help and look for a company that provides full credit repair service.
Here is an important question most people ask, how can you tell if this is a reputable credit repair company? There has been a bad rep given to this industry because of many scams that have taken place. Fortunately, the fraudulent companies have been shut down. I think it is still necessary that you take some precaution and figure out if you have found a legitimate company before working with them.
Familiarize yourself with some of the laws that surround credit repair companies. The Credit Repair Organizations Act was drafted to protect you, the consumer, from any credit repair scams. They also protect your right to get any help with credit repair for your report.
There is always the Better Business Bureau (BBB) reports, they keep all complaint on file made against companies. If there are multiple complaints against a company or a low rating, proceed with caution.
Also, if you come across a company that does not list “credit repair” in their services on the BBB then also be wary of them. The nice thing about the BBB is that they have high standards for credit repair companies. If you have found a company that is possibly fraudulent, the give away is that they have not listed “credit repair” with the BBB.
As with anything you do, concerning your finances and credit, take the time to do some research. There are many reputable companies available and thanks to the internet you can find them within minutes of searching! Credit repair is possible for everyone and good credit is definitely in your future.
If you have decided to fix your bad credit, there are credit repair companies that can help. This is a big decision and not one you should take lightly. On average, a credit repair company will charge you a few hundred dollars and their program usually takes a year to complete.
You don’t want to pick the wrong company and find yourself deeper in debt and nowhere closer to improving your credit. On the other hand, if you find a great company to help you that might be one of the smartest financial decisions you can make!
Let’s first of all take a look at what you should hope a credit repair service will do for you. Take a look at your credit and ask yourself what you think needs to improve. Credit repair goes beyond disputes with your credit companies and the credit bureaus.
Credit repair has been seen as something that is repairing the credit report. Now, working to repair your bad credit can also help to fix your credit report. You have rights under the Fair Credit Reporting Act to dispute any items that you feel are inaccurate.
This part of repairing your credit has been very beneficial to people who have incomplete or inaccurate information on their credit reports. This will of course only help your credit score once you get the items corrected.
This is just the beginning, repairing your credit. Although some people are not satisfied with just working to correct their credit reports. If you find a reputable credit repair company then they should also work with your creditors to have them stop reporting negative accounts.
Another thing they should do for you is contact collection agencies to have them stop reporting negative accounts. Some credit repair companies will even dispute some debts reported and find out how legitimate those claims really are.
Now, it depends on each individual credit situation just how well a credit repair company can help you. Some people might only want to get help on fixing their credit reports, while others need more extensive help and look for a company that provides full credit repair service.
Here is an important question most people ask, how can you tell if this is a reputable credit repair company? There has been a bad rep given to this industry because of many scams that have taken place. Fortunately, the fraudulent companies have been shut down. I think it is still necessary that you take some precaution and figure out if you have found a legitimate company before working with them.
Familiarize yourself with some of the laws that surround credit repair companies. The Credit Repair Organizations Act was drafted to protect you, the consumer, from any credit repair scams. They also protect your right to get any help with credit repair for your report.
There is always the Better Business Bureau (BBB) reports, they keep all complaint on file made against companies. If there are multiple complaints against a company or a low rating, proceed with caution.
Also, if you come across a company that does not list “credit repair” in their services on the BBB then also be wary of them. The nice thing about the BBB is that they have high standards for credit repair companies. If you have found a company that is possibly fraudulent, the give away is that they have not listed “credit repair” with the BBB.
As with anything you do, concerning your finances and credit, take the time to do some research. There are many reputable companies available and thanks to the internet you can find them within minutes of searching! Credit repair is possible for everyone and good credit is definitely in your future.