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credit-bureau-disputes

7 New Year's Resolutions to Improve Your Credit

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7 New Year's Resolutions to Improve Your Credit

Whether or not you are a believer in New Year's resolutions it is a smart idea to take an honest look at your credit from time to time in order to see how it can be improved. Good credit can help you to save tons of money, get approved for the loans you need, and can even help you to land a better job. It is 100% worth your time, energy, effort, and money to work towards achieving and maintaining the best credit possible.

Here are 7 steps that every single person can take to make steps toward having better credit this year.

1. Pay every bill on time.

The importance of paying your credit obligations on time, every time cannot be overstated. In FICO's credit scoring model a whopping 35% of a consumer's credit scores are assigned based upon factors included in the "Payment History" category of a consumer's credit reports. If late payments do occur you can bet the bank that they will have a very negative credit score impact.

2. Cut spending.

Overspending is perhaps the #1 cause of credit problems for most Americans. When consumers charge more than they can afford to pay off in any given month not only do they hurt their credit scores by doing so (yes, credit card debt can in fact lower credit scores even when payments are made on time), but they also set themselves up for financial problems and serious credit problems in the future. In fact, overspending can lead to late payments, collections, judgments, and even bankruptcy if the problem is left unchecked.  

3. Make a plan.

Failure to plan is the same as planning to fail. A well planned budget is a crucial step towards healthier credit. Smart consumers tell their money where to go instead of wondering where the money went after it has already been spent. CLICK HERE for a free copy of the HOPE4USA Basic Budgeting Worksheet to get started.

4. Establish credit.

Credit cards can be extremely useful tools in building or rebuilding better credit, as long as they are managed properly (on-time payments and never revolving a balance from month to month). Even consumers with credit issues can qualify for many secured credit cards. CLICK HERE for a list of credit cards to compare and see which ones might be a good fit for you.

5. Become familiar with your credit reports and scores.

Every consumer should be in the habit of checking all 3 of his credit reports often. The credit bureaus and your creditors are obligated by law to report accurate information on consumer credit reports. However, it is up to you and you alone to ensure that the information contained on your credit reports is actually correct.

You can access your 3 free credit reports each year at www.annualcreditreport.com (credit reports only, not scores). You can also access your credit scores for a fee or as part of a free trial offer from a credit monitoring service. CLICK HERE to compare credit monitoring services which may offer free or low cost credit scores as part of their introductory offer.

6. Correct errors.

Errors occur on credit reports all the time. In fact, in 2013 the Federal Trade Commission released a study which found over 40 million errors to be present on consumer credit reports. If you discover incorrect or suspicious information on your credit reports then you have the right to dispute that information according to the Fair Credit Reporting Act.

Disputes can be handled yourself or you also have the right to hire a professional credit expert like our HOPE4USA team to assist you. CLICK HERE to schedule a no-obligation credit analysis with a HOPE4USA credit expert to learn more about how our team can help you fight for the better credit you deserve. Fixing credit problems can certainly be a difficult job, but it is not a job that you have to do alone.

7. Establish goals.

The final tip is perhaps the first step that you should take as you set out on your journey toward better credit. Identify the reason why you want to achieve better credit. Do you desire to purchase a home for your family? Is your goal to have the strong credit you need to finance your education or the education of your children? Do you need better credit to start or build a business? Building better credit can be a long, hard journey (especially if you are working alone without professional help). Your "why" can help you to stay the course even if you feel frustrated or impatient at certain points within your journey. Your "why" is also the reason that all of your hard work will be worth it in the end. 

michelle-black-credit-expert

Michelle Black is an author and a credit expert with over a decade of experience, the credit blogger at HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, and  a regularly featured speaker at seminars up and down the East Coast. She is an expert on improving credit scores, credit reporting, correcting credit errors, budgeting, and recovering from identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.

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Huge Changes Coming to a Credit Bureau Near You

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Huge Changes Coming to a Credit Bureau Near You

Consumers can expect to see major changes in the way that the credit reporting agencies - Equifax, TransUnion, and Experian - handle much of the information on their credit reports and the consumer dispute process in the coming months and years. In fact these changes, brought about as part of a settlement agreement released on March 9, 2015, are so sweeping that they have the potential to lead to higher credit scores for millions of US consumers.  

The settlement came about after New York State Attorney General Eric Schneiderman and his office began investigating the practices of the 3 credit reporting agencies in 2012. While the neither Equifax, TransUnion, nor Experian were actually found to have violated any laws, the 3 credit reporting giants have agreed to a settlement which will implement a very significant overhaul affecting many different credit reporting and consumer dispute policies.

Additionally, the changes will not merely apply to residents of the state of New York but rather will be implemented for consumers nationwide. Without question the settlement marks the most significant change in credit reporting since the Fair and Accurate Credit Transactions Act (FACTA) amendment to the Fair Credit Reporting Act (FCRA) in 2003.  In fact, credit reporting changes of the magnitude included in the settlement agreement generally only come about when mandated by federal law.

The lengthy settlement agreement (a whopping 41 pages long of not-so-light reading) details a massive amount of information regarding the credit reporting practices changes to come. Here are some of the most important highlights.

Time Frame

·        The changes detailed in the agreement will not take place overnight; however, they will be implemented nationwide over the next 6 to 39 months (3.25 years).

Medical Collections

·        According to the agreement unpaid medical collections will not be permitted to be added to a consumer's credit reports for a period of 180 days (approximately 6 months). The change is designed to prevent consumers from having unnecessary derogatory collection accounts added to their credit reports in cases where a medical insurance company is simply dragging its feet to pay a bill - a common occurrence.

·        When a medical collection is paid by an insurance company it must be removed from a consumer's credit reports immediately, regardless of how long it has been there. Previously paid medical collections were permitted to remain on a consumer's credit reports, leading to credit score damage, for 7 years from the date of default on the original account.

More Free Credit Reports for Consumers with Disputes

·        Each credit bureau has also agreed to provide an additional free credit report to consumers who file a dispute using an AnnualCreditReport.com credit report. Previously, as part of 2003's FACTA, consumers were only entitled to only one from credit report every 12 months via the same website.

Changes to the Dispute Process

·        Perhaps the biggest changes to come about as a result of the settlement are among those involved with the consumer dispute process.

¨      Refusing to Process Disputes - The credit bureaus are no longer permitted to refuse to accept a dispute due to the fact that a consumer has not receive a credit report recently nor for the failure of a consumer to include a credit report identification number with his/her dispute.

¨      Deceased Indicator Changes - When a credit bureau receives a dispute from a consumer than an account on his/her credit report is inaccurately reporting that the consumer is deceased (and the credit bureau's investigation has in fact revealed that the consumer's dispute has merit) the credit bureau must share the information regarding the incorrect "deceased indicator" with the other 2 credit bureaus so that they may remove the indicator as well. (These inaccurate deceased indicators often show up on a consumer's credit reports when they hold a joint account with someone who has passed away.)

¨      Review of Supporting Dispute Documentation Submitted by Consumers - Previously if a consumer filed a dispute with documented proof of a credit reporting inaccuracy the credit bureau would still rely upon the data furnisher (i.e. creditor or collection agency) to review the dispute and determine whether to verify or delete the account. Under the new agreement when a consumer includes documentation to support a dispute and the data furnisher verifies the account as accurate anyway the credit bureau will be required to assign an agent to perform its own investigation, independent of the data furnisher. If the credit bureau agent determines that the consumer's dispute is indeed valid then the agent will have the authority to modify or delete the disputed account.

¨      Escalated Dispute Handling - The credit bureaus will be required to process disputes occurring as a result of fraud, identity theft, and mixed credit files (where the files of 2 consumers are merged into 1) in an escalated manner. Escalated disputes will be handled by specialized groups with experience in these complex dispute situations. 

michelle-lambright-black-credit-expert

Michelle Black is leading credit expert with over 13 years of experience, the credit blogger at HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, and  a regularly featured speaker. She is an expert on credit reporting and scoring, budgeting, and identity theft.

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5 Steps to Prepare for a New Auto Loan

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5 Steps to Prepare for a New Auto Loan

Having good credit is an important goal for every adult to set, but it is never more important for a consumer to have good credit than when he is preparing to make a major purchase - such as a home or a vehicle. If you are planning to apply for a new auto loan in the near future then check out these 5 steps to make sure your credit reports and credit scores are ready before you ever submit your first application.

Step One: Don't Allow Impulse to Drive You.

Give yourself enough time to bring about actionable changes on your credit reports. Buying a car is often very impulsive, certainly more impulsive than purchasing a home. However, deciding to purchase a new vehicle on impulse may be a financial mistake. Trying to purchase a vehicle without making sure your credit is in tip top shape first can result in higher interest rates, less favorable terms, higher monthly payments, and even an outright denial for a loan.

Step Two: Check Your Credit Reports.

Checking credit reports several times a year is an important habit for every consumer to develop. The importance of checking your credit is only compounded further when you are preparing to apply for a loan. Thanks to the Fair and Accurate Credit Transactions Act (FACTA) everyone has the right to a free credit report from each of the 3 credit bureaus every year via www.annualcreditreport.com. Surprisingly, even though the right to access these free reports has been available since 2003, only 4% of the available free reports are claimed annually.

Unfortunately there is currently no law which grants consumers free access to their 3 credit scores. Still, there are several websites online which offer a free or $1 view of all 3 of a consumer's credit scores as part of a trial offer for their credit monitoring services. Greatcredit101.com offers a comparison between several of the most popular credit score offers.

Step Three: Correct Errors.

If you think that credit reporting errors are rare, think again. In fact the Federal Trade Commission conducted a study on credit reporting accuracy in 2013 which concluded that over 40 million mistakes could be found on the credit reports of American consumers. Errors happen, but thankfully you have the right to dispute errors when they occur. Consumers can dispute credit report errors on their own or with the help of a reputable credit repair professional. (CLICK HERE to schedule a no-obligation credit analysis with a HOPE4USA Credit Expert.)

It is worth noting that auto lenders will not be checking all 3 of your credit reports and scores like a mortgage lender would do. However, that does not mean that you should try to take a shortcut and focus on correcting the errors on only 1 of your 3 credit reports. Different auto lenders will use different credit reports in their application processes. In other words, if you apply for a loan with ABC Bank they may pull an Equifax report but if you apply with XYZ Bank they might pull a report from Experian instead. Take a tip from the Boy Scouts and "Be prepared!" so that regardless of which credit report is pulled you will not have to worry about any unpleasant surprises.

Step Four: Take a Long, Hard Look at Your Credit Card Balances.

Arguably the most actionable way for a consumer to see a credit score improvement within a relatively short period of time is to pay down his credit card balances. Credit card balances almost always have a negative credit score impact even when the monthly payments for the accounts are made on time. Believe it or not, a whopping 30% of a consumer's FICO credit scores are based in large part upon the amount of credit card debt he carries. The lower a consumer's credit card balances the better the impact will be upon his credit scores. (CLICK HERE to read The Ideal Credit Card Balance to Optimize Credit Scores.)

Step Five: Choose the Right Lender for Your Credit.

The last step to preparing for your auto loan is picking the right lender for your credit. Consumers with great credit are often best served by applying for financing with a "captive" lender. A captive lender is simply the financing option available through the manufacturer of the vehicle (i.e. Chrysler Financial). Captive lenders often offer financing at very low rates, sometimes even 0%, as an enticement for consumers with pristine credit to purchase their vehicle over a vehicle made by another auto manufacturer.

Consumers with good, but less than perfect credit should consider checking out the financing options available through their local bank or credit union. Finally, remember that it is smart to ask questions and to rate shop before settling on a lender as well. Purchasing a vehicle is one of the most expensive purchases that an average consumer makes. It pays to take the time to prepare for your best possible outcome ahead of time.

credit-expert-michelle-black

Michelle Black is an author and a credit expert with over a decade of experience, the credit blogger at HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, a contributor to the Wealth Section of Fort Mill Magazine, and  a regularly featured speaker at seminars up and down the East Coast. She is an expert on improving credit scores, credit reporting, correcting credit errors, budgeting, and recovering from identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here. 

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Credit Cards: Evil Traps or Useful Tools?

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Credit Cards: Evil Traps or Useful Tools?

Your credit scores are arguably the most important numbers in your life. After all, credit has an impact upon you when you apply for a mortgage, try to finance a vehicle, open a new utility account, and credit may even impact you when you apply for new insurance policy. In fact, building healthy credit scores is so important that you should consider it to be one of your top wealth building priorities. Building healthy credit scores is right up there on the financial importance scale with becoming debt free and saving for retirement.

In order to establish healthy credit scores, you have to prove that you are capable of managing credit responsibly. One of the best ways to prove that you can manage credit responsibly is to open credit card accounts. However, for many people it can be very intimidating to have open credit cards. If you have ever made credit mistakes in the past or if you have ever overextended yourself financially and found yourself underneath a crushing load of debt then it is understandable why you may be a little gun shy where credit cards are concerned.

It can be very tempting to avoid credit cards all together if you have ever made credit card management mistakes in the past. Unfortunately, avoiding credit cards might have negative repercussions where your credit scores are concerned. What you need to remember is that credit cards themselves are not evil. A properly managed credit card offers customers a lot of great benefits. Here are a couple of the best ones:

1. Fraud protection –
If someone steals your cash, you have no reliable way to get your money back. If someone steals your debit card, your personal money could be at risk (at least temporarily) while the bank investigates the unauthorized transactions. If someone steals your credit card then the bank’s money is on the line, not your own.

2. Credit Building Possibilities –
If you keep a $0 or very low balance on your credit cards and you always make your payments on time, you have the potential to receive a credit score boost from your well-managed credit card accounts. The longer you manage your credit cards properly, the better the impact may be upon your credit scores.

Consider the Facts

People who are determined to live a “plastic-free” life with a cash only payment mentality often wind up paying more money in the long run than those who have credit cards but manage them properly. Remember, credit cards are not evil or bad. Racking up a ton of credit card debt by overusing your credit cards is definitely a horrible idea. However, excessive credit card debt can absolutely be avoided if you manage your accounts properly.

Properly managed credit cards can be a powerful tool to help to build your credit scores. An individual with no credit scores (or low credit scores) will likely pay more for car insurance, home insurance, and utility deposits. Plus, while it would be nice to pay cash for a house, most of us have to take out a mortgage to in order to purchase a home. Without good credit scores you can expect to either be turned down for a mortgage or to perhaps pay a higher interest rate and down payment. A higher interest rate on your mortgage could cost you tens of thousands of extra dollars over the life of the loan.

The truth is that bad credit happens to good people all the time. Just because you have low credit scores does not mean that you are a horrible person. Low credit scores simply mean that either you have made credit management mistakes in the past or that you have been the victim of unfortunate circumstances. Either way, you deserve a second chance and you can absolutely make a plan to begin rebuilding healthier credit again today. However, swearing off the use of credit cards is not a good strategy.

If you need help developing a plan developing a plan to begin rebuilding healthier credit, CLICK HERE to schedule a no-obligation analysis with a HOPE Credit Expert.

CLICK HERE to check out some great reviews for secured credit cards. It is best to do your research BEFORE you apply.

michelle-black-credit-expert

Michelle Black is an author and a credit expert with over a decade of experience, the credit blogger at HOPE4USA.com, a recognized credit expert on talk shows and podcasts nationwide, a contributor to the Wealth Section of Fort Mill Magazine, and  a regularly featured speaker at seminars up and down the East Coast. She is an expert on improving credit scores, credit reporting, correcting credit errors, budgeting, and recovering from identity theft. You can connect with Michelle on the HOPE Facebook page by clicking here. 

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60 Minutes Exposes the Credit Bureaus

On Sunday, February 10, 2013, 60 Minutes exposed their shocking investigation of the nation's 3 major credit bureaus: Equifax, Trans Union, and Experian.
If you have not seen the report yet, click here. Every American should see this report:

If you are a victim of the credit bureaus, like 40 million other Americans, you have rights! You have the right to dispute errors and inaccuracies on your credit report; however, you do not have to face this challenge alone. Call 704.499.9696 today and a HOPE credit expert will be happy to explain your rights and to answer your questions.

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