If you have ever shopped around for car insurance, you probably already know that there are a number of factors that affect the rates you will be paying. Age, experience, and the type of vehicle you drive all seem like reasonable criteria, but what about your credit score? Whether you are aware of it or not, your credit rating in most cases does affect your insurance rates; knowing your credit rating and what it means for your rates makes it easier for you to get the best deal.

How Does My Credit Score Affect My Insurance?

We all know that your credit rating can affect your ability to get a loan or purchase a home, but how your credit score affects your skill as a driver may not seem apparent—because it does not. The use of credit ratings as criteria for insurance premiums is a controversial topic, and the decision of insurance companies to include them is not fully understood. Your best strategy in determining what role your credit score has on your rates is to contact your insurance company and ask them for information.

How Do I Find My Credit Score?

If you are concerned about the effect of your credit score on your car insurance rates, you can easily determine your credit score. You can obtain your credit score from the three main credit bureaus such as Equifax, Experian, and Trans Union.  Each of these agencies will charge you a small fee to see your credit score when getting your FREE Annual Credit Report.  If you don’t need to see your credit report, you can check Credit Karma for your FREE CREDIT SCORE.  Having an up-to-date and accurate breakdown of your credit rating before contacting your insurance company will give you the power of knowing whether or not their evaluation is a fair reflection of your credit rating.

What Can I Do If I Have A Bad Credit Score?

If you do have a low credit score, repairing your credit is your best strategy in eliminating this negative factor in your insurance company's calculation of your premiums; this will not reduce your rates in the short term, however. If your credit score has a considerable effect on your rates, your only real option in the short term is to shop around for a new policy at renewal time.

Though the fairness of insurance companies in using credit scores as criteria for evaluating the risk of insuring a particular individual is arguable, at this point it cannot be changed. Arming yourself with information about how your rates are calculated—and remembering that as a consumer you have the right to shop around—will help reduce the impact of this factor.

photo by: jcrakow

How to Improve Your Credit Score

When many people think of credit reports and credit scores, they see them as important if you want to apply for a loan. And of course they are important when you apply for a loan. But your credit report and score are also absolutely critical to getting rid of debt. With a good credit score, you qualify for lower interest rates that can help bring down your total interest charges. With bad credit, you’re stuck paying double digit rates. So let’s look at some tips and tools that can help you:

#1 Understand Just How Important Your Credit Score Is!

As I explained above, your credit score is an important tool in getting out of debt as quickly as possible. Don’t believe me?  Check out these statistics from myfico.com for individuals with a FICO score of 660 (fair credit) versus 760 (excellent credit):

• Mortgage: The average interest on a home loan today is about 4.766% for excellent credit, but 5.379% for fair credit.
• Car Loan: With a credit score of 760, you can expect a car loan interest rate of about 6.3%. With a score of 660, the rate increases to about 9.8%.
• Home Equity: Excellent credit can expect a rate of around 8% or lower, while fair credit borrowers will pay as much as 11% or higher.

As you can see, your credit score matters!

#2 Get Your Free Credit Report!

The starting point is to get your FREE CREDIT REPORT and check it for errors.

#3 Get Your Free Credit Score!

Next you should get your FREEE CREDIT SCORE. You can get this from annualcreditreport.com., but you will have to pay for it.

#4 Pay Your Bills On Time!

There are a number of factors that go into a credit score, but one of the most important is paying your credit bills on time. (such as credit cards, mortgage, and car payments) Do whatever is necessary not to forget a payment, and make sure you make the payment far enough in advance of the due date so that there is no chance it will be late.

#5 Don't Close Credit Accounts!

As a general rule, don’t close credit card and other revolving accounts. One of the factors in determining credit score is the amount of debt you have in comparison to the amount of available credit. The greater the available credit, the better. You can always cut up some of your cards if you don’t want to risk using them, but don’t cancel them.

Credit Repair... Is it really possible?

There are several credit repair myths out there, but which ones are real and which ones are just plane untrue?  In this post, I will examine 4 common Credit Repair myths to shed some lite on the whole thing!

MYTH # 1:

If you have negative or derogatory accounts, a credit repair company can get them removed.

Although some negative or derogatory accounts can be removed from your credit report, a few of them cannot. Before you pay a fee to any company, make sure you "get in writing" their guarantees of what they can and cannot do for you.

If any company states that they can remove all negative items, RUN!

MYTH # 2:

If you are delinquent on an account and call the creditor to close that account, it will help your credit score.

Sorry, this one is not true either!  Inactivity and/or delinquency will damage your score.  FICO (Fair Isaac Corporation) has information that tells you what is in and not in a credit report.

Unfortunately, your PAYMENT HISTORY accounts for 35% of your credit score, and closing the account will not change your payment history.

MYTH # 3:

If you add a statement to your credit report (up to 100 words), it will raise your credit score.

If you cannot get the  three major credit reporting agencies to remove inaccurate information or mistakes, you can opt to add a statement on your credit report.

Unfortunately, FICO usually does not see or use it in determining your credit score. Even though adding a statement might make you feel better, the effort may not be worth it.

MYTH # 4:

You cannot do anything on your own about improving your credit score!

This myth is absolutely FALSE! There are several things you can do to improve your credit scores:

Of course, the most important is to PAY OFF YOUR CREDIT CARDS AND ACCOUNTS in a timely manner.  There are no shortcuts to living up to your responsibility to repair what you agreed to repay!

But, if you see errors on your credit report, you can make requests to have these removed.  If you provide the proper documentation to prove you either did not incur the debt or that you have repaid the debt, it will be removed.

To contact the 3 major credit bureaus, click on the links below:

• Experian
• Transunion
• Equifax

Want to read more about credit repair directly from the source, the Federal Trade Commission  has some good advice on How to Repair Your Credit. 

If you would like a FREE CONSULTATION about your situation, please let us know.  We have been helping people become DEBT FREE for many years, and may be able to help you too!

DIY credit repair is not as hard as you think!

If you think you have errors on your credit report, there are steps you can take to correct them without paying a so-called "credit repair company".

BY THE WAY...DO NOT FALL VICTUM TO SO CALLED CREDIT REPAIR SCAMS THAT CLAIM THEY CAN REMOVE NEGATIVE ITEMS AND INCREASE YOUR CREDIT SCORE...FOR A FEE!

First, you need a FREE COPY OF YOUR CREDIT REPORT.

Each of the three major credit reporting agencies will have on line information on how to submit challenges to errors on their reports:

• TransUnion
• Experian
• Equifax

1.  Get proof of payment or settlement for the account in question:

Let's say you paid off a credit card bill and yet there is still an outstanding balance showing either to the original creditor or to a collection agency.

• Request copies of cancelled checks from your bank
• Print online report from your bank
• If you have the last statement show a zero balance...even better!

2.  Follow the instructions for each reporting agency to submit or open a challenge to your report.

You will be assigned a FILE NUMBER.  Make sure to write it down or better yet, make a copy of the page.

3.  The credit reporting agency will contact the creditor about the account in question. 

This may take up to 30-60 days.

4.  If you do not receive an email or letter within 45 days, check back with the credit reporting agency to get an update on your open file.

Your proof of payment should do the trick, but in some cases you may need to MAIL copies of proof of payment with explanation. The point is...DON'T GIVE UP! The credit reporting agencies want to provide an accurate report and will correct errors when proven to be errors.

If you are having trouble paying off credit card or other unsecured debts, we can help!

If you find that you have legitimate balances on some of your credit card accounts, a Debt Settlement Plan could be the answer!

Does reading your credit report make you feel like this? 

Getting a copy of your credit report is simple to do right from your home computer using AnnualCreditReport.com.  When you have your credit report, you'll be able to see what your creditors are saying about you. However, credit reports can be a little confusing and very intimidating. In this post, you'll find a step-by-step explanation of how to read and interpret your credit report.

Section One: Your Personal Information

Here you'll find identifying information like your:

• name
• current address
• social security number
• date of birth
• spouse's name (if applicable)

Don't just skim over this section. Make sure everything is correct. One bad piece of information and the credit history listed on your report could be wrong.

Section Two: Credit History

The Credit History section contains a list of your open and paid credit accounts and indicates any late payments reported by your creditors. It is extremely important to read through this section very thoroughly. If you find any information that is incorrect or accounts that don't belong to you, you'll need to submit a dispute letter to the credit-reporting agency.

• Company Name - identifies the company that is reporting the information.
• Account Number - lists your account number with the company.
• Whose Account - Indicates who is responsible for the account and the type of participation you have with the account. Abbreviations may vary depending on the reporting agency but here are some of the most common:
  
  
  • I - Individual
  • U - Un-designated
  • J - Joint
  • A - Authorized User
  • M - Maker
  • T - Terminated
  • C - Co-maker/Co-signer
  • S - Shared
• Date Opened - This is the month and year you opened the account with the credit grantor.
• Months Reviewed - Lists the number of months the account history has been reported.
• Last Activity - Indicates the date of the last activity on the account. This may be the date of your last payment or last charge.
• High Credit - Represents the highest amount charged or the credit limit. If the account is an installment loan, the original loan amount will be listed.
• Terms - For installment loans, the number of installments may be listed or the amount of the monthly payments. For revolving accounts, this column is often left blank.
• Balance - Indicates the amount owed on the account at the time it was reported.
• Past Due - This column lists any amount past due at the time the information was reported.
• Status - A combination of letters and numbers are used to indicate the type of account of the timeliness of payment. Abbreviations for the type of account are as follows:
  
  
  • O - Open
  • R - Revolving
  • I - Installment
• Date Reported - Indicates the last time information on this account was updated by your creditor.

Section Three: Collection Accounts

If you have accounts that have been referred to collection agencies in the last seven years, this is where they will be reported. The name of the collection agency will be listed along with the amount you owe and, in some cases, their contact information. If a collection is listed on your report that doesn't look familiar to you, contact the credit bureau and submit a dispute letter.

Section Four: Public Records

Here you'll find a listing of public record items that reflect your history of meeting financial obligations. Such as:

• Bankruptcy records
• Tax liens
• Judgments
• Collection accounts
• Overdue child support

Look closely at all the information listed here. If anything is mistaken, contact the credit bureau and submit a dispute letter.

Section Five: Additional Information

This section consists primarily of former addresses and past employers as reported by your creditors.

Section Six: Inquiries

Contains a list of the businesses that have received your credit report in the last 24 months. If you find the names of businesses that sound unfamiliar, you should find out who they are and why they're looking at your credit! The credit-reporting agency may be able to help you with contact information.

If you find out that you have more debt that you thought and need help ELIMINATING YOUR DEBT once and for all, our Debt Solutions Specialist can help you find the right program to fit your goals.  Click the link below to get a FREE Debt Summary based on your debt and start heading towards becoming debt free today!

photo by: Kay Kim

There are only three states, Claifornia, Hawaii, and Massachusetts, that prohibit insurers from using credit information when calculating premiums.  If you live in one of the other 47 sates, your low credit score could affect your insurance premium. 

Why does your credit score affect your insurance premium?

The answer is simple.  Insurers have found a strong correlation between credit scores and insurance claims. It turns out, people with low scores are more likely than people with high scores to file claims. And when insurers looked more closely, they discovered that people who made late payments were the ones who tended to have more claims.

They didn't find as strong a correlation with other factors, such as taking on too much new credit, which other lenders care about because they worry that you won't be able to keep up with your payments.

Insurance companies use a different credit score to determine your premium

The version insurers use is slightly different from the one that lenders use. Both types of scores are based on information from your credit report, but insurers weigh the items differently. For example, insurers look a lot more closely at how you've managed credit over time rather than how much credit you've applied for recently.

Your insurance score can vary from insurer to insurer, based on the company's claims history. Insurance companies won't reveal all of the details of what goes into their scores, but you can get a version of your insurance score from TrueCredit, available through TransUnion for $9.95. The site provides separate scores for auto and homeowners coverage, which weigh the factors a bit differently, plus advice for improving your insurance score.

Even though your insurer may use its own calculation, the general advice can help anyone improve his or her score. Because each insuance company uses it's own calculation, it is important to shop around occasionally.  You can often find a better deal if you look.

Improving your score can make a big difference in your auto insurance premiums. If you need help eliminating your debt, there are several options available to you.  The Solutions Specialists at Debt Relief can discuss your situation with you and help you find the best option to get out of debt fast!

Give Us a Call --->>>   1-877-492-4109

When most people think of a credit check, they think of this vague thing where the someone checking their credit puts in their name and other private information and gets this number along with everything they have ever done wrong financially. However, it’s a little known fact that there are actually two kinds of credit checks: Hard Pulls and Soft Pulls.

So, what is the difference between a Hard Pull and a Soft Pull?

Soft pull

This is a basic inquiry of your credit score, and is meant for informational purposes only. a soft pulls does not show up on your credit report.

Examples of a Soft Pull:

• Checking your own credit
• A lender checking your credit for "pre-approval"
• An employer checking your credit
• A landlord checking your credit

Hard pull

A Hard Pull is the complicated report that gets done when you apply for a loan, mortgage, as well as many other things. This type of credit check can affect your credit score.

Examples of a Hard Pull:

• Credit check when applying for a mortgage
• Credit check when applying for a credit card or signature loan
• Credit check when opening a new checking or savings account
• Credit check when opening a new wireless phone account
• Credit check when you open a new cable television account

The first couple of Hard Pulls don’t really do anything, but after several in a row, it will start to affect your credit score. If you’re opening multiple accounts that require multiple hard pulls, you’re spending a lot more money. If you are already paying on several accounts that you have recently started, how do they know that you’ll be able to continue your payments on another new account? Luckily, this is only 10% of the total calculation of your credit score.

So, what does this all mean to you?  First, be aware of how often your credit is bing looked at, and try not to have too many Hard Pulls at the same time.  Next, feel free to shop around a bit for the best home loan, but make sure to find out all of the details first and only apply for your top couple of choices. Finally, keep checking your credit report for inacuracies, and report any errors that your find.  Checking your own credit does not affect your credit score, and making sure that the information is accurate will help you when you do apply for thos more complicated loans.

phot by: the Italian voice

As you are working to clean up your debt, it is extremely important to order copies of your credit report and credit score.  You can easily get a copy of your credit report for free and your credit score will cost your around $15. The information found on these reports will directly affect the interest rates you're offered on credit cards, mortgages and other loans, so it is best to know what you are dealing with before you start applying!

Everything you need to know about Your Credit Report and Credit Score

There are three major credit bureaus: Experian, Equifax and TransUnion. Each collects information on your credit history which is turned into a credit report. From that report, a credit score is derived. That score is a quick way for lenders to assess how risky you are as a potential borrower. The higher your score, the less risk you pose to lenders and the more likely it is that you'll get their best available rates.

The score most commonly used by lenders is the FICO score, developed by Fair Isaac.

When lenders review your credit reports and FICO scores, they take into account not only how much you owe but also how much credit you have available to you. Too much of either, and they may not loan you any more money.

When you get your reports, check for inaccuracies. The bureaus are required to investigate and correct any issues once you report them. Look for things that may lower your credit score, including open lines of credit you never use or accounts you thought had been closed long ago.

Each of the bureaus may have different information about your credit history, which means your credit score can vary slightly from bureau to bureau. Therefore, it's important to view reports from all three.

You can get any of the bureaus' credit reports free at www.annualcreditreport.com and your FICO score from MyFICO.com.

We talk to a number of people who regret signing on the dotted line for their sister, best friend, boyfriend......  If they had just listened to Judge Judy in the first place, they would not be in this position. You should NEVER co-sign a loan for someoen unless you are married to them! That being said, so many people get talked into co-signing a loan and regret it later.

What does co-signing a loan actually mean?

Co-signing a loan basically makes you just as responsible for repaying it as the party actually taking the loan out in the first place.  For many consumers, that seems feasible.  After all, the only people asking you to co-sign a loan are either family members or close friends; you’re not gonna co-sign a loan for any regular Joe.

But, as is often the case, stuff happens and your friend or family member can’t afford to pay the loan off, leaving you holding the bill all by yourself.  So how do you get out of it?

Is it possible to remove yourself from a co-signed loan?

As a wise Homer once said to his wife Marge, “Weaseling out of things is important to learn. It’s what separates us from the animals, except the weasel.”  While we certainly don’t condone weaseling out of your financial obligations, we certainly understand the feeling of buyer’s remorse that comes with co-signing a loan.

Banks and other financial institutions typically don’t let co-signers off the hook unless the other signer can demonstrate he has the funds to pay back the loan on his own.  Since that doesn’t happen often (why would they ask you to co-sign in the first place?), here are three ways to remove yourself from a co-signed loan:

 #1 Time off for good behavior

Some loan programs will release your obligation to the loan as a co-signer if the other person is able to make their payments on time over a set period of time (usually about 2 years).

#2 Have them refinance it

Assuming your buddy has a good credit history on their own and has enough income to make the payments, you can try and get them to refinance the loan in their name. The account may still show up on your credit report, but it should be listed as either closed or paid in full.

#3 Sell, sell, sell!!

Did your friend or favorite second cousin ask to take out the loan for a new car or house?  If so, and they’ve fallen behind on the payments, you can certainly try selling the car or home to help with the payments – assuming your name is on the title. 

Hopefully you can use these tips to get yourself removed from a co-signed loan.  If you need more help, one of our Debt Solutions Specialists can help. 1-877-492-4109

What is a SECURED CREDIT CARD?

A secured credit card is one on which you don’t have to make monthly payments. It doesn’t add to your debt because you have to load money onto the card before you are able to use it. The amount you place on the card is your available credit. It is not a debt that you incur, but it does give you peace of mind in knowing that you do have a credit card to use for emergencies or while on vacation.

You can obtain a secure credit card from your bank even if this bank will not approve a regular credit card for you because it is not the bank’s money that you are borrowing – it is YOUR MONEY.

How will using a secured credit card RAISE MY CREDIT SCORE?

Even though you don't have to qualify to get a secured credit card, the bank does report your use of the card to at least one of the three credit reporting agencies (TransUnion, Experian, or Equifax). This card doesn’t show up on your credit report as a secured card, but is seen as a positive item on your report. The fact that you are not carrying a balance on the card means that you don’t have any debt on the card and you have available credit to use for your needs. It's a Win Win!

If you do decide to use a secured credit card to help raise your credit score, be sure to read the FINE PRINT! There are fees associated with the use of the card, so it is important to find the one with the lowest fees, thus giving you more of your money to spend.

Also important to make sure that the issuer of the card reports to all three credit agencies. If not, it is possible that it may report to one where your credit score is seen as being in good standing and this won’t help you.

When you load money onto your account every month and make sure you have enough there to cover the fees. Most of the time, after you have been using the card for a period of time, the bank will see that you are responsible with credit card usage and will then transfer the card to one that you don’t have to pre-pay.   In the majority of cases, it will take about 6 months to a year for this to happen, which is about the same amount of time it takes for you to see any improvement in your credit score.

Key Take Aways:

1. A Secured Credit Card is a card that you get from your bank and "load" with money.
2. The bank will report your credit card usage to one or all of the three credit reporting agencies.
3. When you "load" money onto the card, be sure to put enough to cover what you plan to purchase AND the bank's fees.
4. After 6-12 months you should start to see an increase in your credit score and may be offered a regular credit card by the bank!

Already have too much debt? 

We can help with that too. 

Give us a call or click on the link below!

1-877-492-4109