Credit Facts
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A "Credit Bureau" is a private company that assembles and stores records on the credit history and payment patterns of millions of citizens. They generate profits in the billions of dollars by selling these records to mortgage and other lenders.
They are in no way affiliated with the US government and have no legal authority. But they nevertheless have enormous power and influence over the lives of individual Americans!
In the United States there are three major credit bureaus. They are:
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By gathering information from public records, debt collectors, the court system and mortgage and other lenders, credit bureaus put together information on individual consumers into a file called a "Credit Report."
Your credit report holds information on your open and closed accounts with mortgage lenders, auto loan lenders, credit card companies, and merchant lenders.
It also holds public records such as repossessions, court judgments, liens, foreclosures and bankruptcy.
Now when a lender is evaluating someone for a loan he will contact one (or more) of the credit bureaus and purchase a copy of that persons credit report. Based on the information in the credit report and "Credit Score" the lender will decide whether the borrower is a good risk or a poor one.
The lender will decide whether to grant the loan based on the credit report. If the borrower is granted a loan, the credit report and score will determine what interest rate he will have to pay.
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Your credit worthiness is reflected in your "Credit Score". This is a 3 digit number assigned to you by each credit Bureau based on your credit report. The higher the score, the better your credit.
This shows you the range of the scores.
Below 585 Very poor
585 - 669 Poor
670 - 699 Fair
700 - 729 Good
Above 730 Excellent
The individual bureaus have different ways of determining a credit score, and so your credit score will not be the same for each Bureau. But they are likely to be “in the ballpark".
In determining your credit score the bureaus look at five basic factors in degrees that vary, roughly as such;
History of Payments 35%
Have your bill payments been timely?
Have you made payments late?
Just how late?
How often have payments been late?
Are there accounts in collection?
How many accounts are in collection?
Are there repossessions on your credit report?
Have you ever been in bankruptcy?
Current Level of Debt 30%
What is the total of all your current debts?
How Long is Your Credit History 15%
For what length of time have you carried debt? Lenders prefer to see a long history (of accounts paid on time) and not a short one
Types of Credit 10%
Most accounts are either "installment" accounts or "revolving" accounts.
Installment accounts involved a predetermined payment at regular intervals. Mortgage and car loans are of this types.
With the revolving account you may pay more or less with each payment. Credit card accounts are of this types, but they often do require a minimum payment.
It's best to have a "healthy mixture" of both kinds..
Pursuit of New Credit 10%
Have there been lots of recent "inquiries" (lenders requesting a copy of your report)?
Lenders would rather not see many recent inquiries. It could mean the borrower may be overextending himself.
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How does all this affect me?
Credit bureaus keep records on millions of Americans, so it should come as no shock that there will be a few mistakes. But sadly, the mistakes number more than just the few. In fact, it's estimated that anywhere from a third to a shocking 90% of all credit reports have mistakes.
Let’s state it differently - at a very minimum there's a 1 out of 3 chance that your credit report has errors!
Now considering the importance of your credit score those are NOT very good odds - and that's based on the LOW estimate!
And do you want to know how many mistakes it would take to hurt your credit score?
............ It takes only one ............
Now one would think that when it comes to something as important as your credit ... something that has such a profound impact on your personal and financial life ... that the credit bureaus would avoid taking a slovenly attitude toward accurate reporting.
You may be thinking "Well, there ought to be a law ..."
Fortunately there is! The United States Congress passed one to address the problem ... the Fair Credit Reporting Act, or FCRA.
Under the FCRA everyone has the right to challenge the accuracy of information in your credit report. And when you contact one of the credit bureaus to dispute such information they have 30 days under the law to investigate. If they do not verify the accuracy of the information within those 30 days, they are required to remove it.
Even though the FCRA is a good law, there's still a problem.
From the perspective of the credit bureaus this law is a nuisance. There's nothing in it for them except lost time, money, and productivity.
So they put roadblocks in the way of the consumer. The FCRA has a "loophole" that the credit bureaus know how to utilize, the "frivolous" issue. The credit bureaus are not required to investigate a dispute they deem "frivolous". And who initially decides if they dispute is frivolous? Why, the credit bureaus!.
Talk about putting the fox in charge of the henhouse!
As you can well imagine the bureaus are not hesitant to label a dispute frivolous whether or not it actually is. And while the consumer can always challenge them in court (which is not a big problem if you've just won your state lottery) most people can't raise the capital to hire the high priced lawyers the credit bureaus can ... especially those who are paying outlandish interest rates because of mistakes on their credit report!
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We're familiar with the "roadblocks" the credit bureaus use to frustrate consumers and obstruct their efforts to get errors removed from their credit report. Utilizing your rights under the Fair Credit Reporting Act we guide you in challenging the correctness of data on your report to remove items that could be harming your credit score.
We know how to deal with the credit bureaus and get results!!
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But are you sure it's even legal to get help with my credit?
Although the credit bureaus would rather you don't seek help in disputing information on your credit report, don't ever let them convince you that it's in any way to legal to do so. It most definitely is NOT!
Another trick they like to use is to reply to your dispute and tell you that using help is wasting your money and that credit repair companies are all crooks! And while it's true that some are, what they're trying to do is NOT to protect consumers ... it's to protect credit bureau profits by putting roadblocks in the consumer's path!
Under the FCRA every citizen has the right to challenge - on his own - information on his credit report. But likewise, everyone also has the right to prepare his own tax return, and yet many people would rather hire an accountant to do their taxes rather than try to navigate the complexities of the tax code on their own.
By putting your credit in the hands of the experts you stand the best chance of credit score improvement ... and getting back the good credit you deserve!
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How much improvement can I expect in my credit score?
There will be variation in results, but there will almost always be some major improvement.
And keep in mind!
When it comes to your credit, ANY improvement will make a big difference in your personal and financial life ... impact in the form of lower interest rates, the ability to get loans when that ability was previously lacking, and less stress and mental anguish.
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Am I guaranteed to get results?
Nobody can (if they are the least bit honest) assure results in regard to improving your credit score. And No HONEST company will!
Everyone's situation varies. But in most cases there will be major improvement to one's credit report and credit score ... improvement that will enable the client to get a mortgage, credit card, or car loan ... and at a much lower interest rate.
Don't forget - depending on your situation even ONE mistake on your credit report could mean a difference in your credit score - and in whether or not you can buy a home.
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How long will this process take?
It will depend on your personal circumstances. Your credit history took form over the span of many years, and it's just not realistic to expect outstanding credit overnight.
Nevertheless, there are cases where major improvement will result in a little over a month. Other times it takes longer. It can take a year or longer, but this is rarely the case.
But most of the time you're likely to see substantial improvement in your credit in 4 - 8 months time.
