Year: 2013

How is a Credit Score Calculated?

People often ask how their credit score is calculated and why they have a different credit score from each of the 3 credit bureaus (Experian, Equifax and Transunion).

Nearly everyone has heard the term FICO and believe there to be just one way a FICO score, or credit score is calculated. That’s not true. The company that came up with the FICO scoring method (Fair Isaac Corporation) has actually released several versions of the scoring model. And, other models exist such as the VantageScore model. Then of course, just to complicate it even more the 3 credit bureaus use variations of each.

credit score

On top of that you must realize that creditors do not report to all 3 credit bureaus in many cases. Why? Because it costs them money to report to the bureaus. This is not a free service offered. Make no mistake. The credit bureaus are billion dollar companies making huge profits on being a receptacle for your information and selling that information to large corporations that want to advertise to you, and need to pull your credit report to evaluate your credit worthiness in order to sell to you. Therefore, a creditor may decide to only report to one or two of the bureaus. This will create even more of a difference of your score from bureau to bureau.

Don’t let all this confuse you. Keep it simple and pay attention to what you can control, and control it well. Here is what really matters regarding your credit score and the weight applied to calculating your credit score.

Payment History- 35% of your credit score

  • Current payment record on car loans, mortgages, installment loans, retail accounts, credit cards. What you are looking for is a “paid as agreed” status listed for these accounts on your credit report
  • Public records such as bankruptcies, foreclosures, liens of any kind, judgments, wage garnishments
  • Past due amounts listed
  • Any past delinquencies even if the balance is now current or the account is closed with a zero balance

Payment History Advice

  • Pay your bills on time or even ahead of time. Recent late payments can impact your score dramatically. Paying ahead of schedule can result in lower balances being shown on your report.
  • Get any past due accounts current.
  • Closing accounts with a good history may also impact your score. Think carefully before you close accounts.

Balances Owed- 30% of your credit score

  • The ratio of the balance you owe versus your credit limit on each account and in total will dramatically affect your credit score

Advice on Balances Owed

  • Keep balances owed on credit cards and store accounts low. There is conflicting advice on this but they should never be above 30%.
  • As stated above, if you pay your credit card payments before they are due and pay them in full you’ll be able to show a zero balance each month.
  • Don’t open new accounts just because you can. This can actually lower your score.

Length of Credit History- 15% of your credit score

  • Age of existing accounts
  • Number of recently opened accounts
  • Time since the latest account activity
  • Ratio of new credit versus established credit
  • Re-establishment of new credit following adverse payment problems

Advice on Credit History

  • If you are young and do not have a credit history dating back decades be careful not too open too many accounts quickly. This can be perceived as a risk factor.
  • If you are trying to establish or re-establish a credit history, open an account and use it wisely. Pay it off each month. Then open a second account several months later and do the same. Opening 4 new accounts at once is not a good strategy.
  • Stay away from consumer finance companies if possible. Future creditors know that they lend to consumers with less than perfect credit.

Types of Credit- 10% of your credit score

  • The number and type of accounts you have opened

Advice on Types of Credit

  • Because this accounts for a small percentage of your overall score don’t open accounts just to open accounts. If you have a car loan pay it each month. However, if you have a car that is paid for do not refinance it simply to have a car loan on your credit report.
  • It is good to have a credit card. Do not shy away from opening a secured or unsecured credit card account because you had problems in the past. Open an account and use it only for items you need anyway such as groceries, gas, etc. Then pay it off every month.

New Credit and Credit Inquiries- 10% of your credit score

  • Recently opened accounts versus the number of inquiries by potential creditors
  • Recently opened accounts versus the number of inquiries by potential creditors
  • Time since the inquiries
  • Time since account was opened

Advice on Credit Inquiries

  • The only types of inquiries you need be concerned with as it relates to your credit score are “hard inquiries”. These are inquiries you authorized to be made for the purpose of evaluating you as an applicant for credit.
  • Excessive inquiries in a short time can cause your score to go lower. If you are denied credit by one company do not apply at 5 more companies to see if they will give you credit. This will show up as potentially excessive.
  • When trying to buy a car, dealers may contact several finance companies within a day or two to see if they can find one to give you a loan, or the best deal. This can cause your score to go lower in some scoring models. Others give you a period of days for these type inquiries. Before walking into a dealer to buy a car go to your bank or credit union and see about a loan from them. If you cannot qualify do buy the car. If you can walk into the dealership with financing in place.

Should I Choose a Local Credit Repair Company?

When people have the choice to do business with a local credit repair company or a national company most of the time they would choose to do business locally. There is simply a comfort level doing business locally. Perhaps the thought of being able to find and visit the company should something not go quite right is a compelling reason. And, we would more likely want to help out a business in our own economy. This is no different when choosing a credit repair service and perhaps these reasons are even more compelling.

Credit Repair Process and Concerns

I was in a similar thought process when I was looking for a local credit repair company to refer to some of our accounting clients. I called several of our local San Diego credit repair companies. I found many companies that were one woman or man operations. I made the decision to not do business with these newer credit repair services because I wanted to make sure they were going to be around for a while. I was looking for a credit repair agency with a proven track record.

Local Credit Repair in San Diego local credit repair

There were two or three local companies that did credit repair in San Diego that had a track record but they were very expensive. I was also looking for an affordable service for my clients. Then I started calling national credit repair companies that had a track record but discovered that most of them were expensive as well. And, I didn’t get the comfort level that my clients were going to receive personal attention.

I had a bit of a dilemma on my hands until I found United Credit Education Services. They had everything I was looking for in a credit repair agency. They had a ten year track record, proven results, an A+ Better Business Bureau rating, a very affordable price, and a customer satisfaction guarantee. There was only one problem. They didn’t have a local representative in San Diego.

A New Local Representative in San Diego

Given the need of so many people in need of local credit repair in San Diego, I eventually made the decision to turn over the operations of my accounting business and represent this company to begin offering consumers in San Diego credit repair. The advantage is that I and my customers had a large staff of credit repair experts in the home office to utilize. Yet my clients also have a local representative that will give them the personal attention they need.

My solution to the problem of not finding a local credit repair company in San Diego was to find the best credit repair company and represent them. If you want to find a service in your specific area, yet you want the experience and track record of a larger company, contact us. We’ll look within our network of credit repair Agents and find you someone that will help you.

Starting a Credit Repair Business for Under $500

 

Start a Credit Repair Business for Under $500

If you’re looking to start a credit repair business you may have come to the conclusion that you basically have two options. The first is to piece together the business by paying separately for software, a website, contracts, training and other essential components by buying kits, CD’s and manuals. Or, you could purchase a credit repair franchise that presumably has everything you need to get started. We actually are going to provide you a third option for a credit repair business opportunity below that we believe you’ll find head and shoulders above the first two.

Neither of the first two options overcomes a major issue in the credit repair business. You need to have the time to not only find clients but also do the credit repair service for these clients. Finding clients is a full time job by itself. Doing the work of credit repair is another full time job. So, to work with either of the first two options you must come to the conclusion that you’ll have to limit the amount of credit repair business you can have coming in or you have to hire staff to go get the business or do the credit repair service, whichever part you do not want to do or are least skilled to do.

If you have done any homework on the topic you probably did an internet search for the following terms as we did

starting a credit repair business start a credit repair business

credit repair business opportunity

credit repair business franchise

and terms very similar. What you found are the types of opportunities mentioned above. Companies that provide pieces of the business, and others that offer a credit repair franchise.

Before you can decide on a company to work with that offers pieces of the credit repair business you need to understand all the pieces you’ll need. Here is a partial list of what you would need to start a credit repair business.

A web site– and text for that web site such as frequently asked questions, a marketing video explaining your service, a contact form, an option for a client to sign up for your credit repair service online, and more.

Marketing materials– brochures, flyers, videos, business cards, logo

Credit repair contracts for your state or other states if you want to do business outside your state

Software to assist in the credit repair process, sales tracking, and accounting

Dedicated phone line for customer support

Automated process for updating clients on the their credit repair progress

Training on credit repair law such as the Fair Credit Reporting Act and the Credit Repair Organizations Act, sales training, and business training that can be done online and in person.

We found no companies other than the third option which we’ll reveal below that provide all these pieces. Costs will range upward from $1,000 with these options to start a credit repair business. But that does not include many of the missing parts of your business. You can estimate the true start up costs yourself but our figure is conservatively at $10,000 over the first year.

Now you have the credit repair franchise option. We found two although there may be more.

CreditCRM has a start up of $19,500, and Credit Dispute Pro $9,500. Assuming they provide everything you need which you would need to investigate, these costs would be fine if they also provided an office to work out of which they don’t. Or a household name that everyone recognizes, which they don’t.

There is also a company once called Credit Repair Nerds that has now changed their name to Credit Repair USA which is not a franchise. They consider you a licensee. According to a video on their website as of the date of this post they’ve been bringing on licensees since March of 2015 and have about 90 such licensees. Licensing fees range from $999 to $4,500.

So, what if you could find a company that provided everything you needed to get started listed above?

You have a staff that does all the credit repair service work for you so your job would simply be to go out and get clients.

They offer credit repair at one of the most competitive rates in the industry.

And, offer clients a satisfaction guarantee.

And, they’ve been in the credit repair business since 2004, have an A+ rating and are accredited by the Better Business Bureau and their credit repair division is accredited by the National Association of Credit Services Organizations

They do not limit you with geographical limitations. You can do business in any and all 50 states.

And, can find and develop other individuals who wanted to also be in the credit repair business, and get paid on their business.

You can offer other services such as a Will and Trust, LifeLock, a service to help your clients pay off their bills faster, a service that showed them how to increase their credit score beyond just fixing their credit, and more.

They provide the benefit of up to $100,000 in life insurance for their Independent Agents.

And, you could get started immediately for less than $500.

In addition, the online, conference call, and live seminar training that is second to none. You’ll also have the opportunity to work directly with two of  the top producers in the company.

Well, if you’re serious about getting into the credit repair business this is not a hard decision.

ERA Credit Services can provide you with the opportunity to be in the credit repair business, get everything listed above, and do it for less than $500 out of pocket start up costs. You can literally start today and begin earning money by the end of the day. On top of everything listed above we have the best compensation plan in the industry.

If it sounds too good to be true, it’s not. We have simply found a way to provide a better opportunity. Don’t you owe it to yourself to find out more?

Watch This Video to Learn
How to Start a Credit Repair Business for Less Than $500

If you are seriously interested in a career in credit repair and finding out more contact us at info@eracreditservices.com, visit our website at www.eracreditservices.com or call 727-222-0120 right now!

Repairing Credit After Bankruptcy

If you are contemplating bankruptcy, have filed bankruptcy but it has not yet been discharged by the court, or if your bankruptcy has been successfully discharged, you are not alone. According to statistics from the Administrative Office of the U.S. Courts over 1.2 million people filed for bankruptcy in 2012. However, you are also going to want to know how to repair credit after bankruptcy.

credit repair after bankruptcy

However, that may not give you a comforting feeling because your credit and credit score has taken a serious hit. It’s true that you’ll soon, if you haven’t already, be receiving credit card and other offers of credit in the mail because those companies know that you cannot file another bankruptcy for a long time. But beware of the interest rates and annual fees being offered especially from companies offering you an auto loan.

Fully Recovering From Bankruptcy

If you want to fully recover after a bankruptcy you can. But you must be proactive. Sitting back and waiting for the bankruptcy and the listings on your credit report from each of your creditors to fall off your report will not help at all. To repair credit after bankruptcy you want to work in two general areas as soon as possible.

Develop Positive Credit

First, you want to develop positive credit. If you can get a credit card (possibly a secured card) with a decent interest rate, do so and use it. Do not put items on your credit card that you cannot pay off each month. Buy your groceries and gas (items you have to purchase anyway) on the card and pay the balance each and every month. You’re trying to demonstrate responsible use of credit. There are other proactive steps you can take as well. If you visit
www.eracreditservices.com and fill out the contact form we will email you a list of several steps you can take to increase your credit score.

Repair Credit After Bankruptcy

Second, you want to go through the process of after bankruptcy credit repair. You should try to remove the derogatory items on your credit report that are dragging your credit score down including the items included in the bankruptcy. You may be surprised to find out that these items do not have to remain on your credit report for 7 to 10 years. If you request it, your creditors (the ones in and outside of the bankruptcy) must verify the accuracy of the listings on your credit report. In many cases, if a creditor is not entitled to any more money from you (as in the case of a bankruptcy, foreclosure, short sale or repossession) they will choose not to respond to this request. Federal law then mandates that the item must be removed from all 3 major credit bureau reports (Experian, Equifax, Transunion).

Would You Fix Your Own Car?

You can do this yourself if you have the time to learn how to do it and the time to actually do self credit repair. But just as most people do not fix their own car, or represent themselves in court, it’s best to let an experienced company go to work for you. Is there a guarantee that your creditor will let it go and not respond? No, but if you do nothing you will be guaranteed that these listings will remain on your credit report for up to 10 years.

Repairing credit after bankruptcy is possible and very worthwhile. To find out more about increasing your credit score and repairing credit after bankruptcy visit www.eracreditservices.com , email info@eracreditsrvices.com , or call 619-492-3040 or 727-222-0120.

Credit Repair Scams, Learn the Facts

When searching the internet one will find a lot of misinformation about credit repair and scary warnings about credit repair scams. A lot of this is based on half truths and comes from people that seem to only want to appear as experts on the topic but haven’t done their homework on the credit repair industry. I would like to clear up some of this and give people the full truth.

credit repair scams

Can a Company Charge Fees Before They Remove Items From A Credit Report?

The quick answer is “no”. According to the Credit Repair Organizations Act (CROA) only 501(c)3 non-profit companies, banks, credit unions and attorneys may charge fees before performing service. However, a nominal account set up fee may be charged to a client by any company. The recommendation here is to check out the company you are about to do business with. How long have they been in business? Are they accredited and rated by the Better Business Bureau? Are they certified by the National Association of Credit Services Organizations (NACSO)? Do local real estate, mortgage companies and banks use them to help their clients?

Can Accurate, Non-Obsolete Items Be Deleted Before 7 years?

Another credit repair scams warning is that items that within a 7 year time frame of the date of the last activity on the account and are accurate cannot be deleted. The credit bureau must remove accurate, negative information from your report only if it is over 7 years old. Bankruptcy information can be reported for 10 years. However, if the creditor cannot or chooses not to verify the information they previously reported on a consumer credit report federal law forces the credit bureaus to remove it.

If the creditor cannot or chooses not to verify the information contained in a consumer credit report within 30 days it must be deleted. The provision of the Fair Credit Reporting Act that says that an item may stay on a consumer credit report for 7 years or 10 years is there to protect the consumer, not punish them. This prevents a late credit card payment or even bankruptcy from hurting a person for the rest of their life. It doesn’t state that it must stay on there under any circumstances. Many creditors choose not to verify an item on a credit report for a multitude of reasons. It is the right of the consumer to ask that the creditor verify these items.

How to Avoid Credit Repair Scams

In review, companies that charge for their services in advance of delivering them are not necessarily bad companies or credit repair scams if they are, in fact, nonprofit. It is important for the consumer to look into the track record of a company (for profit or nonprofit) through the Better Business Bureau and the National Association of Credit Services Organizations (NACSO). Obviously if a company has a poor rating or no rating from the BBB, or is not certified by NACSO then they shouldn’t do business with them.

And, items on a credit report, even though they are accurate, may be deleted from the report if the creditor cannot or chooses not to verify them. A consumer should exercise the rights under federal law to inquire about all items on their credit report that are adversely affecting their credit score and ability to get credit, sometimes get a job, and force them to pay higher interest payments and fees on their purchases.

Call Us to Learn More

This is what we do. We’re dedicated to this business. We are accredited and rated A+ by the Better Business Bureau. We are certified by the National Association of Credit Services Organizations. We have been in business since 2004. We are able to conduct business in all 50 states.

Further, we provide a no obligation, no cost consultation on your specific situation. Take 20 minutes and listen to what we have to say and what we can do to help you. If it makes sense let’s work together.

San Diego Office 619-492-3040
Clearwater, FL office 727-222-0120

Tips on Choosing a Credit Repair Company

You may already know that attempting to clear derogatory items from your credit report is not only possible, but it’s your right as a consumer through the Fair Credit Reporting Act. Erroneous, inaccurate and outdated items can cause your credit score to plummet which can keep you from getting a home loan, car loan or even a credit card. Even items that are more recent and are accurate can be removed if the creditor does not respond to your dispute. But how do you choose a credit repair company to help you?

choose a credit repair company

Consumer Disputes Have Very Low Success Rates

In theory a consumer can dispute these items without any assistance from a credit repair company. The chances of success are very low however. There are several reasons why. You must know the process, know what to put in the letter, know the correct dispute code, and know what to do if the creditor and credit bureau responds stating there will be no change on your credit report. Most often an individual doesn’t have the time to learn the process and continue it through to a successful conclusion.

That is why it’s important to choose a credit repair company that is reputable. They will draft letters on your behalf with the correct dispute code and continue the dispute process for up to a year. They have the expertise and experience to overcome difficulties a creditor may present in the process. And, they will follow through on the process as they have professionals overseeing your account.

How to Choose a Credit Repair Company

However, because of the number of people in need of credit repair a myriad of companies have popped up in the last year or two. Some of these companies may have the ability to successfully help a client but some are run by individuals who have purchased a software program and are suddenly in the credit repair business. There are also stories of consumers getting charged a significant fee only to never hear from the company again.

If you are looking to choose a credit repair company, follow these simple tips. And remember, success leaves clues. If the company of individual you are talking to doesn’t seem legitimate follow your instinct.

  • The company should be in business for 2 to 3 years or longer. If not, that could mean they just recently started in order to take advantage of the need in the marketplace.
  • They should have a Better Business Bureau rating. And that rating should be at least an A.
  • They should have accreditation from a third party national credit services organization. One such agency is the National Association of Credit Services Organizations.
  • The person selling you the service shouldn’t be the person handling the dispute process. If they are that means they are a very small, perhaps one woman/man operation and your account may get buried if they get busy. Also, there is no accountability if something happens to this person.
  • The fee should be reasonable. You should not have to pay more than $500 for a thorough credit repair service from a reputable company. Note- some services seem reasonable because they charge a low fee to remove each derogatory item. However, won’t they may not tell you is that each item must be removed from each of the 3 major credit bureaus. So, if someone has 6 derogatory items on each of the 3 credit bureau reports, and the company is charging $50 per item, that’s going to cost $900.
  • The company should offer a customer satisfaction guarantee.
  • The individual or company should explain that some items, most in fact, will not be deleted from your credit report on the first dispute. In some cases it takes several attempts. They should commit to at least 3 attempts. 5 is optimum.
  • The individual or company should be able to show you examples of success they have had with other clients.
  • There should be a way for you to monitor the progress of your credit repair process online.
  • The individual or company should draft the dispute letters on your behalf but the letters should be sent to the credit bureau by you. You are the one that needs to dispute your items. It becomes far less effective if the letters are not signed by, and sent by you.

If You are Going to Choose a Credit Repair Company
We Hope You Choose Us!
Click to Learn About ERA Credit Services