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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.


What Is Revolving Utilization and Why Is It So Important to Your Credit Scores?


What Is Revolving Utilization and Why Is It So Important to Your Credit Scores?

If you want to have great credit scores then pay your bills on time every month. The previous statement is great advice; however, it is incomplete. Simply paying your bills on time is not enough to achieve and maintain great credit scores. In fact, only 35% of your FICO credit scores are based upon your payment history. The other 65% of your FICO scores have nothing at all to do with how timely you pay your bills.

30% of your FICO credit scores, plus a significant portion of your VantageScore credit scores, are calculated based upon the "Amounts Owed" category of your credit reports. The primary factors considered within the category are based upon those little pieces of plastic you carry around in your wallet: your credit cards.

What Is Revolving Utilization?

Revolving utilization is a term used within the credit world to describe the proportion of your credit card balances to your credit card limits. Your revolving utilization ratio is also known as your debt-to-limit ratio or your credit utilization ratio. It measures how much of your credit limits are in use on each of your credit card accounts and expresses that calculation as a percentage. Here is a quick look at how revolving utilization is calculated.

Credit Limit: $5,000
Balance: $3,500
Revolving Utilization: Balance ($3,500) Divided by Limit ($5,000) = Revolving Utilization (70%)

Why Is Revolving Utilization Considered in Your Credit Scores?

Your revolving utilization is an important consideration in your credit scores for one very simple and important reason: it is statistically predictive of higher credit risk. When you carry outstanding credit card debt on your credit reports you represent a higher credit risk than someone whose reports show paid off credit card balances.

All debt is not created equal. When you take out a mortgage loan or an auto loan, for example, you are opening an installment account. Credit cards, by comparison, are revolving accounts. Installment debt is much less risky for lenders to extend because the debt is generally secured by some sort of collateral (aka your house or your vehicle) which the lender can seize and resell in the event you stop making your payments. However, credit card debt is different.

Because of the nature of credit card debt, it is much more predictive of increased credit risk than installment debt. Think about it. If you begin to struggle financially due to an illness, divorce, job loss, or even poor financial management habits like overspending, which is the first obligation you will probably allow to slide in the event that you have more bills than money at the end of the month? Most likely you will not skip your mortgage payment, your rent, or your auto loan payment if you can help it. Credit card payments, however, are much more commonly skipped in the event of a financial shortage.

Additionally, increased credit card balances might indicate that a financial problem is looming. If a consumer loses his job then it is very common to rely upon credit cards to help finance every day expenses until a new source of income can be secured. As you can easily see, if your reports show that you are revolving balances on your credit cards from month to month, especially high balances when compared with your credit limits, it might make you appear to be a higher credit risk in the eyes of a lender.

The Good News

Although revolving unpaid credit card debt on your credit reports from month to month will almost certainly lower your credit scores, you can currently regain those lost points rather quickly, as soon as you start to eliminate the debt. The other goods news is that the score increase you may be eligible to earn from paying down your credit card balances and lowering your credit utilization can be earned incrementally (instead of an "all or nothing" scenario). In other words, as you pay down your credit card balances little by little you should begin to experience small credit score increases. You do not have to pay a credit card balance all the way down to zero on your credit reports before you can hope to receive a score boost.



Michelle Black is an author and leading credit expert with nearly a decade and a half of experience, a recognized credit expert on talk shows and podcasts nationwide, and a regularly featured speaker at seminars across the country. She is an expert on improving credit scores, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here.


New Changes Coming to Your Next Mortgage Application: Trended Data


New Changes Coming to Your Next Mortgage Application: Trended Data

Planning to apply for a mortgage in the near future? If so you should be aware of some major changes on the horizon in the mortgage world which might impact your next application. At the end of June, 2016 Fannie Mae will be adding a new element of credit data to be considered by their automated underwriting system, Desktop Underwriter (DU Version 10.0). The new element which DU will consider the next time you apply for a mortgage is known as "time series data" or "trended data."

What Is Trended Data?

According to Fannie Mae trended credit data is "expanded information on a borrower's credit history at a trade line (credit line) level [based] on several monthly factors, including: amount owed, minimum payment, and payment made." More simply phrased, trended data is a just a list of your account management information which allows lenders to see a chronological history of your credit card balances, payment amounts, and minimum payments over a series of time (2 years to be exact).  This historical payment data shows lenders whether you are a credit card balance transactor (someone who pays off her credit card balances monthly) or a credit card balance revolver (someone who does not pay off her credit card balances monthly and instead revolves a balance from month to month).

Why Does Your Mortgage Lender Care about Trended Data?

Credit reports and scores are products, sold by the credit bureaus and FICO (among others), which serve the purpose of helping future lenders predict the risk of doing business with you. If your credit reports and scores show lenders that you are a high risk borrower (aka you likely will not pay your bills on time) then future lenders may either turn you down when you apply for a loan or may charge you a higher interest rate to offset the risk they are taking.

Before trended data was featured on credit reports mortgage lenders (and any other lender for that matter) could not truly tell whether or not you made the habit of paying off your credit card balances in full each month or not. They could only see a snap shot of your current credit card balances.

Your historical payment data is important to lenders because it allows them to more accurately predict the risk of loaning you money. If your credit reports show that you pay off your credit card balances monthly then you are without question a lower risk borrower than someone who revolves credit card balances from month to month. Adding trended data to DU's risk assessment process allows mortgage lenders to more accurately predict risk.

Will Trended Data Impact Your Credit Scores?

At present trended data is only being considered by Fannie Mae's DU system when you apply for a mortgage. The data is used to help mortgage lenders using DU to predict risk, but it will not have any impact upon your actual credit scores at this time. Trended data is not considered in the calculation of your credit scores currently, but in all likelihood it is only a matter of time before trended data will have an impact upon your credit scores. Trended data is a powerful predictor of risk. You should expect to see it used more widely in the years to come.

Your New Pre-Mortgage Game Plan

In the past the best way to prepare your credit for a mortgage was to pay your bills on time, maintain credit reports which were free from derogatory information (i.e. collections, public records, etc.), and to pay off your credit card balances. However, since trended data shows lenders a 24 month window into your historical credit card payment habits, paying off your credit card balances 30-60 days before a new mortgage application simply is not going to cut it in the future.

(Need help preparing your credit for a mortgage? CLICK HERE to schedule a no-obligation credit analysis with a HOPE4USA Credit Expert today.)

As mentioned previously, mortgage giant Fannie Mae will begin considering trended data in the mortgage application process at the end of June, 2016. GSE Freddie Mac has also expressed an interest in eventually considering trended data as well. What this means for you is that with the consideration of trended data quite possibly thrown into the mix for your next mortgage application the truth is that the habit of revolving credit card balances from month to month could certainly cost you more money on your next loan and (in cases of borderline approval) could even potentially prevent you from being approved for a mortgage at all.

It has always been important to pay your credit card balances off monthly, both from a credit and a financial perspective. Yet it is now more important than ever to make and execute a plan to eliminate your credit card debt. That plan may include dipping into your savings, taking out a consolidation loan, or using the snowball method to wipe out your credit card debt as quickly as possible. Regardless of the exact method, it is important to stop feeling overwhelmed by your credit card debt and to start taking action. Remember, failing to plan really is as good as planning to fail. 


Michelle Black is an author and leading credit expert with over 13 years 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, budgeting, and identity theft. You can connect with Michelle on the HOPE4USA Facebook page by clicking here. 


The Top 5 Things You Need to Know about the Credit Reporting Agencies' New Settlement Agreement


The Top 5 Things You Need to Know about the Credit Reporting Agencies' New Settlement Agreement

Media outlets were set into a frenzy last month when the New York Attorney General's office announced a landmark settlement agreement which had been reached with the 3 major credit reporting agencies - Equifax, TransUnion, and Experian. The agreement will completely overhaul many of the practices and policies previously held by the credit reporting agencies (CRAs) and has the very real potential to bring about credit score increases for millions of American consumers.

The 41 page long agreement will introduce a large number of credit reporting and dispute resolution changes, some of which are not all that exciting for consumers and several others which are extremely so. If you are interested in reading the agreement in its entirety it can be found here. However, for those of you who would simply prefer the highlights you can read below for the top 5 things which you need to know about the new settlement agreement and the ways it may or may not impact you directly.

1. Changes will be implemented for consumers nationwide.

Although spearheaded by the New York Attorney General, Eric Schneiderman, and the despite the fact that the settlement was actually made solely with the state of New York, all of the changes detailed in the settlement will be implemented for all US consumers across the country. One of the primary reasons why the new policies and procedures will be rolled out for all consumers instead of only those consumers located in New York state is due to the fact that it does not make sense, logistically speaking, for the CRAs to have separate policies and procedures in place for an individual state.  

2. Changes will still take time.

The CRAs are going to have to complete tremendous amount of programming work in order to implement the changes detailed in the settlement and, as a result, the changes are not expected to happen overnight. Instead the CRAs have been given a total of 3 years and 3 months, broken down into 3 phases, to complete all of the steps which will be required in order to comply with the settlement. Here is a quick overview of the 3 phases.

·        Phase 1 (September 8, 2015)

The easiest changes in the settlement must be implemented by this date. These primarily include changes which will not require an extensive amount of programming and/or training.

·        Phase 2 (September 8, 2016)

The changes which must be implemented by the Phase 2 deadline are those which are more (but not most) time consuming from a logistical standpoint. Phase 2 initiatives will involve the development of many new internal policies in addition to new polices for credit reporting between the CRAs and their customers (aka data furnishers).

·        Phase 3 (June 8, 2018)

The "Completion Date" detailed in the settlement is the deadline for implementing all remaining changes in the settlement. Changes included in the Phase 3 rollout are the most time consuming in nature from a programming and training standpoint.

3. Medical Collections

Among the most exciting new policy modifications in the settlement include those which are related to the handling of medical collection accounts. Once implemented there will be 2 major changes in medical collection reporting procedures.

a.      Delayed Reporting - Medical collection accounts will not be permitted to appear on a credit report until the account is at least 6 months past the date when the account initially went delinquent. This change is required to be implemented by Phase 3 (June 8, 2018). Preventing the early reporting of medical collections will allow consumers more time to ensure that medical bills are paid by insurance without the fear of their credit reports and scores being damaged due to slow insurance claim review processes.

b.      Accounts Paid by Insurance - By the Phase 2 deadline (September 8, 2016) the CRAs will be required to remove or suppress from credit reports any medical collections which are paid or are being paid by a consumer's medical insurance provider. The removal/suppression will be retroactive and will apply to medical collection accounts which were paid by insurance in the past but are still currently remaining on any consumer's credit report. What makes this change especially exciting is the fact that the removal of a collection account from a consumer's credit reports, depending upon the situation, could potentially have an extremely positive impact upon that consumer's credit scores especially if it were the only negative account present.

4. More Dispute Resolution Influence from the Credit Reporting Agencies

One of the more anticipated changes by consumers which will be implemented in Phase 1 (September 8, 2015) has to do with the way which the CRAs handle certain disputes. In the past when a consumer disputed an account with the CRAs and included supporting documentation (i.e. proof that an account was paid off) the CRAs would still fully rely upon the data furnisher to either modify, delete, or verify the account.

Once the new policy is implemented, should a consumer submit disputes to the CRAs with supporting documentation AND the account is still verified as accurate then the CRAs themselves will also be required to assign agents to review the supporting documentation in order to determine if a deletion or change is warranted. If a change is deemed to be warranted then the CRAs will actually modify or delete the inaccurate account themselves. Should everything work as planned then it should result in a much easier process for consumers to see errors corrected on their credit reports (provided they have proof of the error).

5. More Free Access to Credit Reports

Since the FACTA amendment to the Fair Credit Reporting Act was passed in 2003 consumers have had the right to claim a free credit report from each of the 3 CRAs annually via the website In addition to this free report some consumers will also be entitled to a 2nd free annual credit report from the same website as part of the new settlement. The additional free report, which must be made available by the Phase 2 deadline (September 8, 2016), can be claimed by any consumer who meets the following criteria: (a.) the consumer already pulled an initial report from in the past 12 months and (b.) the consumer initiated a dispute after doing so.

As previously mentioned, the full settlement agreement spans a total of 41 pages. There are certainly many other changes which will be brought about as a result of the new settlement in addition to those listed above. If you are interested in learning more about the coming changes feel free to check out the following article: Huge Changes Coming to a Credit Bureau Near You


Michelle Black is leading credit expert with over 13 years 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, budgeting, and identity theft. You can connect with Michelle on the HOPE 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.