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5 Perks You Can Land If You Have Great Credit Scores

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5 Perks You Can Land If You Have Great Credit Scores

Everyone loves earning perks, benefits, and bonuses, right? Credit card reward programs, brand loyalty programs, and even grocery store discount cards are built upon this very concept. However, while most people can easily recognize the value of a credit card rewards program there are still many consumers who do not see the value of having high credit scores in the same light. That is a costly mistake.

The truth is that great credit scores can help you to score a lot of awesome perks. Check out the list below to help you start viewing the potential value available to you by maximizing your credit scores.

1. Saving with lower insurance premiums.

When you have excellent credit scores you can secure lower interest premiums. You may not be aware of this fact, but insurance companies routinely check credit scores when you apply for a new policy. In fact, your credit scores can even be more important than your driving record when it comes to determining how much an insurance company will charge you for an auto policy.

Earning great credit scores can pay off every single month in the form of money saved on insurance premiums. If your credit has improved since you took out your current insurance policy then it would be very advisable to talk to your agent or shop around to see if you now qualify for a better price on your insurance coverage.

2. Saving on deposits.

When you open a new utility account it is often common practice for the utility provider to check your credit in order to determine whether or not you will be required to put down a deposit for service. As a result when you apply for new electric service, gas service, cable service, or internet service having less than stellar credit scores can cost you. Additionally, when you apply for a new mobile phone account your credit will again be consulted not only to determine whether or not you will be required to put down a deposit for service but to also see whether or not you qualify for a new account at all.

3. Saving interest costs every month.

Did you know that financing a home with a questionable credit rating could realistically cost you nearly  $85,000 extra over the course of the loan? Purchasing a home with a credit score of 620 could cause you to pay an extra $235 per month on a $300,000 mortgage compared to what someone with a credit score of 740 would likely pay for the same loan. Over the entire course of a 30 year mortgage that is an extra $84,600 you would pay - a pretty expensive penalty for not having great credit scores.

If you have already overcome credit issues and have rebuilt great credit scores then you should take a look at your current loans (i.e. mortgage, auto, credit cards, personal loans, etc.). You may just qualify to refinance some of those loans at a lower rate and save yourself a bundle on interest.

4. Saving on vacations.

Having great credit enables you to land better credit card offers. Many credit cards offer exciting perks such as 0% interest on purchases for 12 months, generous airline reward miles which can be redeemed for free airfare, or even 0% financing with a specific resort or cruise line. However, the most attractive credit card offers are generally reserved for those consumers who have excellent credit scores. Achieving excellent credit scores can open the doors for you to cash in on some amazing vacation deals.

5. Saving face.

If you have ever applied for financing in the past and been turned down then you probably can recall a vivid memory of the red hot embarrassment which crept its way up your face when you heard the words, "I'm sorry, but your application was denied." Simply put, bad credit can be very bad for your self esteem and your sense of self worth, especially if you are the primary bread winner for your family. It is well worth the hard work required to build better credit scores just for the pay off of the added confidence you will receive once you know you never again have to worry about being turned down due to bad credit.

Earning Better Credit

It is completely possible to start earning better credit right away. However, just because it is possible does not mean that the process is easy. Earning better credit takes a solid plan, hard work, consistency, and patience. In fact, it is very advisable to seek the help of a reputable credit professional.

CLICK HERE to schedule a no-obligation credit analysis with a HOPE4USA credit expert. Our team can help you build a plan to achieve the better credit you deserve - either on your own or with our help every step of the way. You can also CLICK HERE to download our free HOPE4USA Credit Repair Tool Kit. 

hope4usa-michelle-black-credit-expert

Michelle Black is an author and 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 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. 

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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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Where to Get Truly Free Credit Reports and Scores

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Where to Get Truly Free Credit Reports and Scores

The word free can be defined as "without cost or payment, without charge, free of charge, for nothing." However, many of the "free" credit scores and "free" credit reports offered to consumers are not exactly what the average person has in mind when she hears the word free. It is difficult to get something for nothing and often there is a catch of some sort involved whenever a free credit product is being offered.

Before you become too cynical, the truth is that there really are quite a few places where consumers actually can claim truly free credit reports and scores. Check out this comprehensive list of websites where you can currently access your credit reports and/or credit scores online without the necessity of handing over your credit card information to anyone.


Equifax Credit Report and/or Summary
 Annualcreditreport.com
Quizzle.com
CreditKarma.com

Equifax Credit Scores		 Quizzle.com (VantageScore)
CreditKarma.com (VantageScore)
Mint.com (Equifax Risk Score)

TransUnion Credit Report, and/or Summary		 Annualcreditreport.com
CreditKarma.com (Can Update Weekly)
WisePiggy.com (Credit Report Summary)

TransUnion Credit Scores		 CreditKarma.com (VantageScore)
CreditKarma.com (TransRisk Score)
WisePiggy.com
Experian Credit Report and/or Summary Annualcreditreport.com
CreditSesame.com (Credit Report Summary and Credit Monitoring)
Credit.com (Credit Report Summary)
Experian Credit Scores CreditSesame.com (Experian National Risk Score)
Credit.com (VantageScore)

The Pros

All of the websites listed above will give consumers free access to their credit report and/or scores without the consumer having to pay a dime. Credit scores and reports wield an enormous amount of control over the life of every US consumer, whether the consumer wishes to acknowledge that fact or not. It is always in a consumer's best interest to keep a close eye on her credit which is why increasing free access to credit reports and scores is always positive for consumers.

The Cons

It is important to understand that, aside from Annualcreditreport.com which is the website that the 3 major credit reporting agencies use to provide free annual credit reports to consumers in compliance with the 2003 FACTA amendment to the Fair Credit Reporting Act, all of the websites listed above are for-profit businesses. They are not charities who are giving away free credit products to consumers out of a sense of altruism. Instead, these companies primarily make a profit by advertising financial services to their users. Whenever someone signs up for one of these advertised products the company will generally receive a commission. Still, being marketed to for products which could likely benefit the consumer financially anyway is arguably a pretty small price to pay for free access to credit reports and scores.

Perhaps the biggest downside to a consumer solely relying upon free credit products to monitor her credit reports and scores is the time which is involved in doing so. As you can see from the table above, there is no single website which offers a consumer free access to all 3 of her credit reports and all 3 of her credit scores. Therefore, in order to monitor all of her credit reports and scores thoroughly a consumer would need to take advantage of multiple offers from multiple websites - a very time consuming undertaking.

The Alternative

For consumers who want an easier, faster way to thoroughly monitor all of their credit reports and scores in one place it may be worth considering a fee-based credit monitoring service. There are several credit monitoring services which offer 3-bureau, 3-score access for a monthly fee. Depending upon the service, these fees generally range from $16.99 per month - $29.99 per month. Also, consumers should be aware that there are quite a few fee-based credit monitoring services that still only provide the capability of monitoring a single credit report and single credit score - something which a consumer can easily do for free at any of the free credit websites above. CLICK HERE for a list of several credit monitoring services currently available to compare fees and services before choosing the best fit for you.

The Moral of the Story

Mistakes on credit reports happen more often than most consumers realize. In fact, the FTC released a study in 2013 which proposes that as many as 1 in 5 consumers have errors on their credit reports. However you choose to do it, the fact of the matter is that you should be monitoring your credit reports and scores and you should be doing so frequently.

michelle-lambright-black-credit-expert

Michelle Black is an 13+ year credit expert with HOPE4USA, 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, budgeting, and identity theft. You can connect with Michelle on the HOPE Facebook page by clicking here. 

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Foreclosure? Bankruptcy? You Might be Able to Purchase a Home Sooner Than You Think

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Foreclosure? Bankruptcy? You Might be Able to Purchase a Home Sooner Than You Think

Qualifying for a mortgage loan can be a daunting task, especially for consumers with certain types of credit problems such as bankruptcy, foreclosure, or short sales. Even if a consumer is able to rebuild his credit scores to a high enough level to satisfy a lender after one of these events (no small order), he may still be turned down for a loan until enough time has passed since the derogatory credit event before a lender will approve him for a new mortgage loan. The reason why consumers in these situations can be turned down for a mortgage even if their credit scores meet the minimum score criteria is due to the existence of mandatory waiting periods.

Not sure what your credit reports and scores look like? CLICK HERE.

Normal Waiting Periods

Fannie Mae, the government-sponsored enterprise (GSE) which is the leading source of residential mortgage credit in the United States, is slower to purchase the home loans made by lenders when certain types of credit issues appear on a borrowers' credit reports. These problematic credit issues include bankruptcies, foreclosures, and foreclosure alternatives such as short sales and deeds-in-lieu of foreclosure. When these specific credit issues occur Fannie Mae requires that a mandatory waiting period be instituted so that there is a cooling off period between the time when the major credit issue occurred and when the consumer will be eligible to qualify for a new mortgage loan in the future. Lenders have to abide by the guidelines set forth by Fannie Mae if they want the ability to sell the loans to Fannie Mae instead of being forced to hold the loans on their own personal balance sheets.

Mandatory waiting periods vary based upon both the derogatory credit event which occurred (i.e. bankruptcy, foreclosure, etc.) and the type of loan for which a consumer is applying (i.e. FHA, VA, USDA, or Conventional). If a consumer has a foreclosure on his credit reports, for example, then in many circumstances he could be required to wait up to 3 years before he is eligible to qualify for a new government-backed loan (i.e. FHA, VA, or USDA) and possibly up to 7 years prior to qualifying for a conventional mortgage.

Fannie Mae routinely adjusts mandatory waiting periods for loan programs so it is always best to check with an experienced loan officer to find out the specific wait period required for the mortgage loan program which interests you. Plus your loan officer will be able to help you determine if your situation qualifies for a reduced waiting period based upon certain "extenuating circumstances." (Don't have a loan officer? EMAIL US if you would like a referral to a loan officer we know and trust.)

FHA Back to Work Program - Extenuating Circumstances

HUD's announcement of the new FHA Back to Work Program in 2013 was very good news for consumers who experienced negative "economic events" which lead to a foreclosure, short sale, deed-in-lieu of foreclosure, or had filed for bankruptcy protection from their creditors. Thanks to the program, consumers who find themselves facing one of the situations above may be able to qualify for a new mortgage after a shortened waiting period. Qualified borrowers under the new program could be eligible to receive a new mortgage loan after as little as 1 year has passed since their derogatory credit event.

Who Qualifies?

In order to qualify for the Back to Work program consumers must be able to document the following.

1. Borrower must meet FHA loan requirements for "satisfactory credit."
2. Borrower can document the mortgage or credit problems resulted from a financial hardship.
3. Borrower has re-established a responsible credit history.
4. Borrower has completed HUD-approved housing counseling.

To qualify for the program a consumer must have credit reports and credit scores which meet the minimum requirements for approval set forth by both FHA and the lender. Next, he must be able to provide documented proof (i.e. tax returns) which demonstrates that he experienced an income reduction of 20% or more for a period of at least 6 months which lead to his derogatory credit event (i.e. bankruptcy or foreclosure). He will also need to demonstrate that he has recovered financially from the event as well. Additionally, the consumer will need to have at least a 12 month history of on-time rental payments and a 12 month credit history which is free from late payments as well.

Your Next Step

If you have taken the necessary steps to rebuild your credit after recently experiencing one of the derogatory credit events above, then you may be ready to meet with a loan officer to see if you qualify for a new FHA mortgage loan under the Back to Work Program. (Remember, if you are not already working with a loan officer you can EMAIL US if you would like a referral to a loan officer we know and trust.)

However, if you already know that you credit reports need some work before they will be clean enough to qualify for a mortgage then it is likely best for you to begin by scheduling a no obligation credit analysis with a HOPE4USA credit expert to learn what we can do together to help prepare you for your goal of homeownership.

michelle-black-hope4usa.com-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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Saying No-No-No to Holiday Overspending!

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Saying No-No-No to Holiday Overspending!

There are many holiday traditions which are beautiful, meaningful, and worth repeating year after year. However, the tradition of holiday overspending has become all too common among American consumers. Trust me, I understand the temptation to overspend during the holidays and I have heard every excuse in the book given to try to justify this bad habit. "I want to do something really special for my loved one this year because he/she has been going through a difficult time. I'm not worried about charging gifts on my credit cards because I will pay the balances off in a few months with my tax refund. Money is so tight during the rest of year so my family and I deserve to have a little fun during the holidays."

It is much easier for consumers to talk themselves into overspending during the holidays than at any other time of the year. Social pressure, pressure to please loved ones (whether the pressure is real or perceived), and incessant retail marketing can make it difficult for many consumers to stick with a spending budget they can actually afford. However, the truth is that consumers do not have to fall into the debt trap in order to have a happy and meaningful holiday season with their loved ones.

The Plan

The single most effective way for a consumer to swear off holiday overspending once and for all - and to actually achieve this goal - is to start with a plan. As a reader of the HOPE4USA Credit Blog you know that having a written budget to follow for your monthly expenses is essential to financial and credit success. (Need help creating a monthly budget? CLICK HERE for a free HOPE4USA Budgeting Guide.) However, with all of the extra expenses present during the holiday season it is also important to have a separate, written budget for holiday spending as well.

How It Works

When starting a holiday budget it is important to begin by listing the amount of money which is actually available for spending, not the expenses. Starting with the amount of money you can actually afford to spend (without going into debt or dipping into non-holiday savings) will help you to build the most effective budget possible.

Let's say that you determine your total available spending limit for the holidays should be $1,000 or less. The next step should be to divide those funds into spending categories such as charitable giving, Christmas presents, holiday treats and meals, decorations, and unplanned expenses. The funds can be allocated within the spending categories however you see fit. Here is a possible example:

·        Charitable Giving - $100 (10% of available funds)

·        Christmas Presents - $550 (55% of available funds)

·        Holiday Treats and Meals - $200 (20% of available funds)

·        Decorations - $50 (5% of available funds)

·        Unplanned Expenses - $100 (10% of available funds)

Once you have separated your available funds into separate spending categories you can move on to determining how much you will spend for each person on your Christmas gift list. One of my favorite strategies for budgeting Christmas gifts is to list each person for whom you wish to buy a gift in their order of importance. Next you can determine which percentage of funds you wish to spend on each person and calculate those percentages against your pre-set budget to find out your gift "allowance" for everyone on the list. Here is an example.

·        Spouse - 20% ($110 in the example budget above)

·        Child #1 - 15% ($82.50 in the example budget above)

·        Child #2 - 15% ($82.50 in the example budget above)

·        Grandchild #1 - 10% ($55 in the example budget above)

·        Grandchild #2 - 10% ($55 in the example budget above)

·        4 Friends - 5% each ($27.50 each in the example budget above)

·        Misc. Friends, Teachers, Neighbors, etc. - 1% each ($5.50 each in the example budget above)

Make the commitment to set a budget and stick to it and you will make the holiday immensely more enjoyable for yourself and your family this year. As a bonus you can give yourself and your family the gift of starting 2015 off on the right foot financially, without a Christmas overspending hangover.

Merry Christmas from HOPE4USA! Click the image to the left to download the HOPE4USA Basic Christmas Budget worksheet and set yourself up for a holiday season without regrets.

Merry Christmas from HOPE4USA! Click the image to the left to download the HOPE4USA Basic Christmas Budget worksheet and set yourself up for a holiday season without regrets.

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 HOPE4USA Facebook page by clicking here. 

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