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7 New Year's Resolutions to Improve Your Credit


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 (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 is an author and a credit expert with over a decade of experience, the credit blogger at, 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.


Why Doing "Nothing" Can Do So Much Harm to Your Credit


Why Doing "Nothing" Can Do So Much Harm to Your Credit

Ignorance is bliss...or so the saying goes. However, when it comes to your credit reports and scores being ignorant can be a truly horrible strategy which can have some seriously negative consequences as well. People generally ignore their credit for one of two reasons. First, many consumers with good credit assume that everything on their credit reports is fine and do not even bother to check their reports until their next loan application. The second most common reason why consumers ignore their credit is due to the fact that it is so bad that they feel overwhelmed and powerless to change their credit situation. Regardless of the reason, ignoring your credit is a really bad idea.

Why Consumers with Good Credit Need Still Need to Pay Attention

If you always pay your bills on time and maintain very low or even $0 balances on your credit cards then odds are high that your credit scores are probably in pretty good shape. The truth is that you have the right to expect your credit reports to contain accurate information. However, the reality of how the credit scoring system works is that mistakes on credit reports happen. In fact the Federal Trade Commission released a study in 2013 which proposes that there were around 40 million mistakes on the credit reports of US consumers. Although the Fair Credit Reporting Act does give you the right to expect accurate credit reports, errors still occur every single day. What you may not realize is that the responsibility to make sure you credit reports remain error free lands squarely on your own 2 shoulders.

Credit reporting errors can range from insignificant with little to no credit score impact to all the way on the opposite side of the spectrum where the wrong credit reporting error can wreak utter havoc upon your credit scores. Thankfully, there are several options which make it extremely easy for you to keep a close eye on your credit reports in order to ensure that they remain accurate.

Option 1: In 2003, thanks to the FACTA amendment to the Fair Credit Reporting Act, consumers were given the right to access all three of their credit reports completely free of charge once every 12 months. To access these free credit reports you simply need to visit (Not-so-fun-fact: an average of only 4% of these available free reports are actually claimed by consumers annually.)

Option 2: If you are wise enough to understand the importance of keeping a close eye on your credit reports then you will also realize that checking your credit reports once a year is not going to be often enough. The good news is that there are many free options available to access and review your credit reports throughout the year - though this option can be a bit time consuming due to the fact that truly free reports can generally only be accessed one credit bureau at a time.

Option 3: Finally, there are also several affordable fee based credit monitoring services which will allow you to check an monitor all 3 of your credit reports and scores simultaneously and easily.

Why Consumers with Bad Credit Still Need to Pay Attention

There is no question that credit problems can feel overwhelming and insurmountable. When faced with credit problems the desire to stick your head in the sand and ignore them can be very tempting. Unfortunately, ignoring credit problems does not make them go away but only keeps you stuck in the same bad situation for longer than necessary.

Whether you choose to work on resolving credit issues yourself or to seek professional assistance with your credit problems you should make the decision to do something. No matter how bad your credit reports are currently - even if you are one day out of a freshly discharged bankruptcy - there are always steps which you can take to begin moving your credit back in the right direction.

CLICK HERE to schedule a no-obligation credit analysis with a HOPE4USA credit expert to learn how to improve your credit reports and what HOPE4USA can do to help.

CLICK HERE to download our free credit repair toolkit - no strings attached. 


About the author: Ron Lambright has been a credit expert for over 14 years and is the Executive Director of HOPE4USA - a company he helped to found after struggling to overcome personal credit issues on his own twice before. He is a regular guest on radio talk shows and is featured weekly as the premier credit expert at training seminars in the Charlotte, NC region and up and down the East Coast.  Ron is an expert on teaching consumers how to achieve  "loan ready" credit reports, improving credit scores, and an expert in the fields of business financing and business credit as well. You can connect with Ron on Facebook page by clicking here.


Is Settling My Debt the Key to Better Credit?


Is Settling My Debt the Key to Better Credit?

Let's face it, no one plans on having bad credit. Aside from a few bad apples, the vast majority of consumers never set out with the intention of acquiring debt and failing to pay it off according to terms. Instead, most consumers who develop bad credit do so as a result of some unfortunate circumstance such as a job loss, an illness, divorce, etc. Even those consumers who find themselves swimming in collection accounts as a result of poor financial planning typically do not realize that they have overextended themselves financially until they have already bitten off more than they can chew.

One of my favorite sayings is the HOPE4USA slogan, "Bad credit happens to good people all the time." The reason why this statement means so much to me is because it is 100% true. Whether a person is facing credit problems due to bad luck or bad decisions, that does not mean that he or she is a bad person. Everyone deserves a second chance.

Cleaning Up Past Mistakes

Unfortunately, when most consumers set out to begin cleaning up their past credit mistakes they do it wrong. I cannot count how many consumers have expressed their frustration to me over the years after they paid off a pile of old collection accounts and their credit scores remained low - often even lower than they were initially. The fact that most consumers fail to understand is that paying off or settling collection accounts generally will not do anything to improve credit scores.

Why Paying Collections Doesn't Raise Credit Scores

The FICO credit scoring models currently in use by lenders do not reward consumers for paying off collection accounts. Current versions of FICO are much more concerned with the fact that a collection occurred in the first place than they are with the balance of the account. In fact, a collection account will have virtually the same negative impact upon a consumer's credit scores whether the balance is $2,000 or $0. (Defaulted credit card accounts are typically the exception to this rule.)

The purpose of a FICO credit score, also known as the design objective, is to predict the likelihood that a consumer will become 90 days past due on any of his/her credit obligations within the next 2 years. Current FICO credit scoring models are built with the assumption that a consumer who had collection accounts in the past is still likely to be 90 days late on an account in the future. Therefore, the presence of a collection account - regardless of the balance - is going to have a negative credit score impact.

Change on the Horizon?

FICO 9, the most recent credit scoring model released by FICO was designed to treat $0 balance collection accounts very differently than they have been treated in the past. The new scoring model was built with scoring logic to completely ignore collections with $0 balances. The result? Consumers who settle or pay their collection accounts could potentially see a massive score increase under the new scoring model.

Before you get too excited it is important to realize that it will likely be many years before FICO 9 is widely adopted by lenders - if it is even adopted at all. Check out my previous article, "Why You Shouldn't Be Too Excited About the New FICO 9 Scoring System...Yet" for more details. If lenders are not using the new scoring model then it is impossible for consumers to see any benefit from the new scoring logic.

What Should I Do?

If you believe that the fact that settling your collection accounts will not likely help your credit scores is a good reason to ignore the accounts, you may want to think again. Unpaid collection accounts have the potential to come with a lot of nasty consequences. Lawsuits, judgments, and wage garnishments are a few of the unpleasant side effects that often accompany unpaid debts. Settling past due accounts can be a very smart move, though it may be advisable to consult with a reputable professional for help and guidance before you get started

Where to Begin

It is important not to become overwhelmed when you make the decision to begin trying to fix past credit issues. The best place to start is to get a copy of all 3 of your credit reports (and possibly your scores as well). You can access a free credit report from each of the 3 major credit bureaus every year at Credit scores are not free, but you can often access them as part of a free or inexpensive trial to a credit monitoring service. CLICK HERE to compare trial offers which offer 3-credit scores.

Once you have your reports, review them thoroughly for mistakes. Credit mistakes happen more commonly than many consumers realize. In fact, the FTC estimates that over 40 million consumers may have errors on their credit reports.

When reviewing accounts for errors remember that all aspects of the account (i.e. balance, date opened, date of last activity, etc.) should be correct. If errors are discovered you have the right according to the Fair Credit Reporting Act to dispute those errors. You can dispute credit errors on your own or with the help of a professional. CLICK HERE for a great, free Credit Repair Toolkit to help you get started or you can schedule a no-obligation credit analysis with a HOPE4USA Credit Expert.


Michelle Black is an author and a credit expert with over a decade of experience, the credit blogger at, 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.