Would you like to know how to improve your credit score?

 Here are a few very helpful tips you can use to do it yourself.

I've written several articles and blogs on the subject of Credit Repair, How to Improve Your Credit Score, How to Have Errors on Your Credit Report Corrected, etc. over the years.

When it comes to the subject of "CREDIT REPAIR", there are several misconceptions, but the most prevalent is that you can get the top three credit reporting agencies (Equifax, Experian or TransUnion) to remove negative information from your credit report.!

You may have seen ads from the newspaper, TV, radio, on line or phone making claims such as:

• "We can remove bankruptcies, judgments, liens and bad loans from your credit report!"
• "We can erase bad credit!"
• "We will help you create a new credit identity that is 100% legal!"

Credit Reporting agencies sell (that's right, they are in business to make a profit) your credit history to those who need to know that if they loan you money, you have (or have had in the past) the ability and track record to repay that loan!

Make sense?  Sure.  Then why would you think that you or some Credit Repair Company could magically make negative information disappear?

Yes, there are some credit repair companies who, in my opinion (and most likely your state's attorey general) have the methodology to have some negative items removed from your credit report for a short period of time or until the creditor realizes it and makes a claim to have it replaced!

Some people will pay a lot of money for this type of shady "credit repair" in order to get a loan or possibly qualify for an apartment or even for employment.

Be very careful of these claims!  They could come back to  haunt you!

The Federal Trade Commission has written many good articles on this subject and credit repair in general.

Here's a link to a very good article: CREDIT REPAIR: HOW TO HELP YOURSELF

OK, but what about LEGITIMATE ERRORS?

If you haven't done so already, you need a copy of your credit report (not necessarily your score at this time) from each of the top 3 Credit Reporting agencies.

If you have applied for credit, insurance or employment, and were denied, you can request a copy of the report, if you do it within 60 days.

You are entitled to a FREE CREDIT REPORT every 12 months.  Just go to www.annualcreditreport.com or call 1-877-322-8228.

Carefully check all of information on all 3 reports.

Make sure you name, social security number, address, etc. are correct.

What you are looking for is accounts that you know (and can prove) that you have paid off.

Also, depending on your state's statute of limitations, negative information in the past (charge offs, accounts that you were late paying often, etc.) can be removed after a certain number of years.

For example, if you live in Oregon, the statute of limitations is 6 years on most accounts.

But, the biggest thing you are looking for is for accounts that you have paid off and are still showing a balance or may have been turned over to a collection agency.

Make a copy of your the page of the credit report showing the account you wish to dispute.

• Circle the account.

Gather the proof of payment:

• Letter or account statement with $0 balance
• Copies of check and/or money order you used (you may have to contact your bank or go on line)
• Letter of satisfaction if you paid off a judgment

Now, you are going to write a letter with this information to EACH OF THE 3 CREDIT REPORTING AGENCIES.

Yes, you can go on line and in many cases this works best, but somehow I think the "paper trail" of a letter with proof is more effective.

If you do not get a reply within 45 days, make sure to follow up!  Don't GIVE UP!

This is where I think it may be a good idea to hire a professional, ethical credit repair company to do this for you.

Yes, it will cost you some money, but there is a lot of time and effort that will go into challenging several items and you may not want to spend the time.

Check with your state's attorney general's office for a list of good, reliable credit repair companies.

If you live in Oregon, click here for a list of registered companies.

Comment on the subject of Credit Report Disputes:

Recently, I had written a blog about this subject and received a comment from a Credit Repair Company owner.

The blog was titled "Best Options for Credit Card Debt Relief" in which I listed and explained several ways to help get debt.

He commented and asked the question why I did not explain how to "fight for non payment of a credit card" rather than file for bankruptcy.

I understand and apprecitate the comment, but in my opinion, if you or I agree to repay a debt by taking out credit, then we have given our word...made a promise to repay and should do so if at all possible.

I don't think it is right to try an find a loophole such as they fact that a debt collector (as much as I don't like most of them) can't provide sufficient paper work to prove that the debt is legitimate in order to get out of paying a debt you know you owe.

On the other hand, I've had cases where after a creditor or collector agreed to accept less than the full balance due to the severe financial hardship of the consumer, the remaining balance showed up at another collection agency later.

Of course, in that case, you should (and we successfully did) dispute the claim.

I understand that there are many circumstances that happen that may make repayment impossible.

In those cases, if a Debt Management Program or a Debt Settlement Program can help, then a person should take advantage of such programs.

If things are so dire that neither program can help, then Bankruptcy may or should be the only option.

So, for your DO IT YOURSELF CREDIT SCORE CHECK UP:

• Order a FREE Credit Report
• Check for errors
• Gather proof of payment
• Write letters
• Follow up! Follow up! Follow up!

If all of this sounds like TOO MUCH, we can help:

A lady from Portland, Oregon called to ask, "What really determines my credit score?"

There is a lot of misleading information about credit scores and this information should help.

According to the Fair Isaac Corporation (FICO), your credit score is made of many factors, but the most important are:

• Payment History (35%) 
• Amounts you Owe (30%)
• Length of Credit History (15%)
• Types of Credit Used (10%)
• New Credit (10%)

Your PAYMENT HISTORY (which accounts for the greatest percentage in determining your credit score) looks at how and when you pay your debts!

• Do you pay on time?
• If not, how late were you and how often were you late?
• Do you have negative items on your credit report such as a bankruptcy, judgment, lien or lawsuit?

Being late on a payment is not necessarily a terrible factor on your credit report, but they are looking at:

• How late where you (30,60, 90 days, or more?)
• How much was the balance?
• How recent were you late?
• How many times are or where you late?

The next major factor that affects your credit score is the total amounts or balances on your accounts. (This makes up 30% of your credit score!)

Having outstanding balances is not a bad thing, but what the credit reporting agencies are looking for is how much of your available credit have you used?

They refer to this as your "DEBT RATIO".

What is my debt ratio?

Let's say you have 5 Credit Card accounts with a total available credit line of $20,000.

If you have only two balances of the five and the total balance is $2,000, then your DEBT RATIOwould be only 10% (2,000/20,000).

This shows creditors that although you have $20,000 of available credit, you are only using a small percentage and therefore are a better "CREDIT RISK".

On the other hand, let's say of the $20,000 of available credit you have, you have had to charge up $15,000.  Now your DEBT RATION would be 75%!

Creditors could be cautious in lending or extending any more credit to someone with that high of a DEBT RATIO!

The next factor that is used in determining your credit score is the LENGTH OF YOUR CREDIT HISTORY.

Although it may seem unfair, those who are young and/or have never established a credit history will not have a very favorable credit score, but will find it hard to be extended credit.

What type of credit accounts do you have?

The credit reporting agencies look at the various types of accounts such as:

• Credit cards
• Store or retail accounts
• Installment loans
• Finance Company Loans (pay-day loans)
• Mortgages

You don't have to have one of each, but what the credit reporting agencies are looking for are a balance.

For example, if you had 5 or 6 Finance Company or Pay-Day loans (which usually carry very high interest rates and fees), you would most likely be considered a greater risk than someone who had a couple of credit cards (Visa, Master Card, Discover, etc.) and maybe one Sears card.

Finally, what about your NEW CREDIT?

How does New Credit affect my score?

The credit reporting agencies look at several "new accounts" as a greater risk than someone who say, had been using a (or a few) credit cards for several years and just recently signed up for one store card.

It is a negative mark on your credit report to go out and sign up for several NEW ACCOUNTS in a short period of time.

One final bit of advice, DON'T CANCEL OLD ACCOUNTS!

Closing accounts does not help your credit score.  You want an established credit history.

Even if you have had problems in the past, you can improve your credit score!

But what if you have so much debt that you simply cannot keep up with the payments?

Here in Oregon, we've been helping people become DEBT FREE for over 10 years.

Many people have used our DEBT SETTLEMENT program to final become DEBT FREE!

Once it has been determined that you simply cannot keep up with your minimum monthly payments and cannot meet the payment required in a Debt Consolidation or what is called a Debt Management Program, a Debt Settlement Program could be the answer!

We are not talking about secured debt (home mortgage, equity line of credit, etc.) but rather UNSECURED DEBTS, such as:

• Credit Cards
• Store Cards and Accounts
• Personal bank loans
• Deficiency Judgment after repossession
• Private Student Loan
• Pay Day Loans
• Medical bills

A Debt Settlement Program can help you:

• By lowering your monthly total debt payment
• Potentially save you thousands of dollars by negotiating a settlement for less than the full balance due
• Avoid turning to Bankruptcy!

photo by: Casey Kinstantin

Looking for Oregon credit repair?

Errors and inaccurate information on your credit report can cause your credit score to be lower than it should be.

Here's a few TIPS ON HOW TO CORRECT YOUR CREDIT REPORT:

1.  Take a close look at your credit report!

If you don't have a current credit report or if it has been a long time since you took a close look at it, you need to get an updated report.

Your credit report is constantly changing as creditors are reporting and or inquiring about your credit report.

You can get a FREE Credit Report by going to WWW.ANNUALCREDITREPORT.COM  This site will link you to all three of the major credit reporting agencies... Equifax, Experian and TransUnion.

2.  Mark any items on the report that you need to dispute

Sometimes you will find items on your credit report that just shouldn't be there such as:

• Paid off or settled accounts that still show a balance
• Judgments that you have satisfied that still are showing a balance owed
• Accounts that have been on the report for longer than the statute of limitations in your state
• Inaccurate names or addresses
• Accounts that are not yours (yes, this happens)

#3 Submit your dispute to each of the three credit reporting agencies

Write a letter to each credit bureau detailing your challenge and requesting that the item is removed or corrected.

You should also demand that the creditor reporting show a complete history of the debt (Fair Credit Reporting Act).

It usually takes 30 days or more for the credit bureaus to respond, so you may need to do a lot of follow up.  But DON'T GIVE UP!

Yes you can have incorrect or inaccurate information removed, but it will take time and effort!

If you would like help, please let us know!

You CAN correct errors on your credit report in 3 easy steps!

Step #1 - Get a Copy of your Credit Report

If you are willing to spend a little time and effort, there is no reason to spend hundreds of dollars paying someone else to correct errors on your credit report.

Start by pulling a current copy of your credit report. You can do this absolutely free once per year at www.annualcreditreport.com. 

This site allows you to access your credit report from all three of the major credit reporting agencies (Experian, Equifax, & TransUnion)

If you want to see your credit score, you will have to pay a small fee.  However, if you are just looking to clean up your credit report, there is really no reason to pay for your score at this time. 

Step #2 - Take a Close Look at Each Credit Report

If you have paid off old accounts and they are still showing a balance or if it was charged off and moved to a collection agency, you can dispute the entry and it will be removed.

Most disputes can be addressed online.  Each agency will have it's own procedure, but basically you will need to provide them with proof of payment such as:

• A statement from the creditor or collection agency showing the account has been paid.
• A canceled check showing the payment was processed.
• A bank statement showing canceled check or check-by-phone entry to the agency.

Here are the links to dispute errors:

• Experian Disputes
• Equifax Disputes
• Transunion Disputes

Step #3 - Follow Up!

Correcting or removing errors on your credit report may take 30-60 days. You should receive an email or letter as to the status of your dispute, If you don't, go back online to see what's been done.

If the credit bureaus have not made the correction, make a follow up dispute!  If you have provided proof (as above) that this account has been paid or settled-as-agreed, they will eventually correct the error, so don't give up.

You may need to call the agency and speak to a representative if you can't find any updates online.

Experian:       888-397-3742

Equifax:         800-685-1111

TransUnion:  800-916-8800

If you have accounts that you have not paid on in some time, we may be able to negotiate a settlement at 50% or less!

photo by: TrinityCreditServices

Beware of credit repair scams! 

Many so-called Credit Repair companies make claims like:

• "We can remove bad loans, bankruptcies, judgments and liens and improve your credit score!"
• "We can erase bad credit!"
• "Bad credit history?  We can improve your credit score in 30 days!"


Sound a little too good to be true?

Credit Repair companies target consumers with bad credit histories or low credit scores promising to clean up or eliminate negative items on their credit report...FOR A FEE!

You may have received a call or email and wondered..."How did they get my name and information?"

The credit reporting agencies sell information to companies! 

Nice to know!

Anyway, the truth is, these companies cannot provide an improved credit report by using methods or tactics that you could not do yourself!

Step 1:

If you haven't done so already, request a FREE copy of your credit report from each of the 3 major credit reporting agencies:

• Equifax
• Experian
• TransUnion

You can receive your FREE report by going to www.annualcreditreport.com

Step 2:

If you find inaccuracies and/or errors, you will dispute them by:

Write a simple dispute letter stating the dispute and provide copies of documents that support your dispute:

• Paid off statements
• Settlement agreement with copy of processed check
• copy of the error on the credit report

Step 3:

Mail your letter with supporting documents to the credit reporting agencies by CERTIFIED MAIL, return receipt requested so that you can document that the agency received it.

For addresses of the three major credit agencies, click here.

Credit reporting agencies must investigate your claims within 30 days.

They must forward all the relevant data that you provided to the company to the company.

Once the information provider receives notice of a dispute from the consumer reporting agency, it is required to:

• investigate
• review the relevant information
• report the results back to the credit reporting agency

If the investigation proves that your dispute is true, the information provider has to notify the credit reporting agency so that they can correct it in your file.

As you can see, this may take some time and effort, but you could certainly save yourself several hundred dollars by doing-it-yourself.

For a complete report from the Federal Trade commission, click below:  Credit Repair: How to Help Yourself

We get asked that question all the time, and for good reason!

To answer "What is included in my credit score?", let's look at what FICO says.  

Fair Isaac Corporation (FICO) calculates credit scores for the major credit reporting agencies like TransUnion, Experian and Equifax.

So how do they determine your score?

Basically, FICO uses 5 different categories by various weighted percentages:

PAYMENT HISTORY:   35%

Major categories:

• Past due accounts
• Bankruptcies
• Judgments
• Wage attachments
• Paid as agreed accounts

AMOUNTS OWED:   30%

• Amounts owing on all and specific types of accounts
• Number of accounts with balances
• Proportion of credit lines and installment loan amount used

LENGTH OF CREDIT HISTORY:  15% 

• Time since accounts opened
• Time since account activity

NEW CREDIT:   10%

• Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
• Number of recent inquiries
• Re-establishment of positive credit history following past payment problems

TYPES OF CREDIT USED:   10%

• FICO weighs different types of accounts and it is not very clear which type has more weight.
• Large accounts such as your home mortgage are not as adverse as say too many small credit cards with very high interest rates.

FICOtakes into consideration all of these categories, not just one or two.  In other words, no one piece of information or factor alone will determine your score.

A lender will look at other things when making a decision:

• including your income
• how long you have worked at your present job
• the kind of credit you are requesting.

Finally, your score considers both positive and negative information in your credit report.

For example, late payments will lower your score, but re-establishing a good track record of timely payments will raise your FICO credit score!

If you feel overwhelmed with too much credit or would like to know how to improve your credit score, please request our FREE, FINANCIAL ANALYSIS.

We will help you determine the best course of action with no obligation!

Call 877-492-4109 TODAY

photo by: SMJP

I need to know about Do It Yourself Credit Repair.

I've been told that there are credit repair companies that can remove all of the bad things from my credit report and raise my scores dramatically...FOR A LARGE FEE!

No company has the ability to remove negative items on you credit report without proof that they are in fact mistakes.

A credit score in the US is a number representing the creditworthiness of a person or the likelihood that this person will pay their debts.

Lenders, like banks and credit card companies, use credit scores to determine if in fact a person should be given a loan and based on the score, what interest rate they will charge.

The most widely used credit score model in the US is FICO or Fair Isaac. 

In 2006, the three major credit reporting agencies, Equifax, Experian and TransUnion, introduced VantageScore. 

Regardless of which reporting agency is being used, they all use a somewhat similar formula to determine a CREDIT SCORE. 

This score is based on:

• Payment History (highest weighted percentage)
• Credit Utilization (debt-to-credit ratios as well as how much debt is available) This is the 2nd highest weighted percentage.
• Current and and Delinquent Balances The total amount you owe relative to your employment/income history plus bad debt will impact your score.
• Length of Credit History If you have little or no credit history, it could be a negative to your score until you establish a credit history.
• Types of credit used (installment, revolving, consumer finance, mortgage) A variety of types of debt and a good history of management helps.
• Recent searches for credit.  Credit inquiries that were made yourself (say, to check your credit score), by your employer (to check prior employment history), or by companies initiating prescreened offers of credit or insurance do not have any impact on your credit score.

 OK, so what do you do if you see mistakes on your credit report?

You can contest and correct legitimate errors on your credit report by contacting each reporting agency.

You will need one or more of the following:

• A statement from the company showing that you indeed paid off this account
• Letter from the company if you negotiated a settlement
• Canceled check showing payment was received and processed

 You can contact each yourself:

FICO  (877) 434-7877 or www.support@fico.com

Equifax  (800) 238-8067 or 

https://www.ai.equifax.com/CreditInvestigation/jsp/ECC_Dispute_Login.jsp

Experian (714) 830-7000 or  

https://www.experian.com/consumer/cac/InvalidateSession.do?code=DISPUTE

TransUnion  (800) 916-8800 or 

http://annualcreditreport.transunion.com/entry/disputeonline

The process may take time, so be patient and persistant.

But, if you just don't have the time, you may consider seeking professional help...AT A PRICE!