Would you like to know more about credit repair? First off, what is credit repair? How does it work? Why does it work? Get the answers to these credit repair faqs and more before you decide if credit repair is right for you.
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Credit Repair FAQs
WHAT IS A CREDIT SCORE?
A credit score is a number that reflects your risk level, as an individual, to a lender. The higher the number, the lower the risk will be to the lender. As you apply for increased credit or attempt to make a purchase, the lender will check your ability to pay back that loan. The more negative marks you have on your credit report, the less likely you will be granted the loan or purchase you requested.
WHAT IS A CREDIT REPORT AND WHAT IS IT USED FOR?
A credit report is a history of your use of credit and other personal information that gives lenders a snapshot of your credit history. Whether you are applying for a credit card, a car loan, a personal loan, or a mortgage, lenders want to determine your credit risk level. In short, lenders want to know if they can rely on you to pay them back on time.
There are three major credit reporting agencies: Equifax, Experian, and Transunion. These agencies collect data and maintain records on millions of Americans and their bill payment histories. The reports tell lenders how much credit you’ve used, what types of credit you’ve used, how long you’ve had various accounts, and whether you pay your bills on time. Every year, billions of lending decisions are based upon the information in those reports. Your credit report and score strongly influence how much credit will be made available to you and the terms you are offered by lenders. The speed you are approved for credit, the interest rates you get, and decisions about the amount of credit are all determined by the information found in your credit report.
WHAT’S IN YOUR CREDIT REPORT?
Although each credit reporting agency formats and reports this information differently, all credit reports contain basically the same categories of information.
Identifying Information- Your name, address, Social Security number, date of birth, and employment information are used to identify you. These factors are not used in credit scoring. Updates to this information come from the information you supply to lenders.
Trade Lines- These are your credit accounts. Lenders report on each account you have established with them. They report the type of account (bank card, auto loan, mortgage, etc.), the date you opened the account, your credit limit or loan amount, the account balance, and your payment history.
Credit Inquiries- A Most Asked About Credit Repair FAQs -When you apply for a loan, you authorize your lender to ask for a copy of your credit report. The inquiries section contains a list of everyone who accessed your credit report within the last two years. The report you see lists both “voluntary” inquiries, initiated by your own requests for credit, and “involuntary” inquiries, such as when lenders order your report so as to make you a pre-approved credit offer in the mail.
- Hard Inquiries- A Hard Inquiry is the type of inquiry done by a potential creditor when you apply for credit. Many times people are concerned with the number of hard inquiries on their credit reports and how much they are affecting their credit score. Hard inquiries will drop your credit score a few points each but only for one year. Hard inquiries may be listed on credit reports for up to two years, but will only affect your credit score for one year.
- Soft Inquiries- There are 2 types of soft inquiries. The first is done by existing creditors to check on your overall debt utilization on a regular basis. Also, companies may also purchase your credit information from one or more of the credit bureaus to send you offers for credit. The second type of soft inquiry is when you obtain your own credit report. Regardless of the type of soft inquiry, none affects your credit score.
Public Record and Collection Items- Credit reporting agencies also collect public record information from state and county courts, and information on overdue debt from collection agencies. Public record information includes bankruptcies, foreclosures, lawsuits, wage attachments, liens, and judgments.
Credit Repair FAQs About Credit Scores
HOW IS MY CREDIT SCORE CALCULATED? - A MOST IMPORTANT CREDIT REPAIR FAQs
The formula used to calculate your FICO score includes information based on several factors: 35% on your payment history, 30% on the amount you currently owe lenders, 15% on the length of your credit history, 10% on the number of new credit accounts you’ve opened or applied for (fewer is better), 10% on the mix of credit accounts you have (mortgages, credit cards, installment loans, etc.)
HOW LONG DO NEGATIVE ITEMS STAY ON A CREDIT REPORT
Negative credit accounts, or trade lines, can remain on your credit report for up to 7 years, and bankruptcies, and other public records for up to 10 years. Inquiries on your credit report may remain for 2 years. These are the maximum times that are permitted by federal law for reporting agencies to show negative items; however, these times are not mandatory. At any time, a creditor or credit bureau may remove a derogatory remark from your credit report if the consumer requests an investigation into remarks that they feel are incorrect.
IS THERE ANYTHING THAT CAN NOT BE REMOVED FROM A CREDIT REPORT?
No, all information reported by the credit bureaus is subject to the same laws and criteria. We may challenge on your behalf any items you request and the credit bureaus must investigate these items.
WHY DO THE CREDIT BUREAUS HAVE SEPARATE REPORTS FOR HUSBAND AND WIFE?
The credit bureaus collect information based on individual Social Security numbers. Information on a married couple's credit reports will differ as they reflect the individual's credit history.
DO ALL THREE CREDIT BUREAUS REPORT THE SAME INFORMATION?
Not necessarily. What information is reported on your credit report is dependent on your creditors. A creditor may choose to report to one, two, or all three of the credit bureaus. This is also one reason why your credit score with each of the 3 major credit reporting agencies will differ.
DO ALL 3 CREDIT BUREAUS CALCULATE A CREDIT SCORE THE SAME WAY? ONE OF THE MOST ASKED ABOUT CREDIT REPAIR FAQs
Each of the credit bureaus uses a different credit scoring model. Therefore, in conjunction with the answer to the question above, your credit score will be somewhat different from all 3 of the bureaus.
Credit Repair FAQs About the Credit Repair Process
HOW DO MISTAKES GET ON MY CREDIT REPORT? - A KEY CREDIT REPAIR FAQs
It is estimated that as many as 80% of credit files have errors. If your credit report contains errors, it is often because the report is incomplete, or contains information about someone else. This typically happens because:
- You applied for credit under different names (for example, Margaret Jones versus Margaret Jones-Smith)
- Someone made a clerical error in reading or entering name or address information from a hand-written application
- You gave an inaccurate Social Security number or the number was misread by the lender
- Loan or credit card information was inadvertently applied to the wrong account
WHO CAN REMOVE ITEMS FROM MY CREDIT REPORT?
Only the credit bureaus have the power to remove items from your credit report. But, as required by law, the credit bureaus must delete inaccurate, unverifiable, or outdated information.
IS CREDIT RESTORATION LEGAL?
Absolutely. The Fair Credit Reporting Act allows anyone to dispute inaccurate items on their credit reports. There’s nothing we do that you cannot do yourself when it comes to fixing your credit situation. Individuals can restore their credit on their own but this can take time and a lot of knowledge when it comes to credit laws. That’s why we are here to help since we have the experience and knowledge to get you positive results.
HOW MUCH WILL YOU INCREASE MY CREDIT SCORE?
Many of our clients have seen an increase of 100 points or more*. However, the actual amount will vary per customer. There are many factors that affect a credit score besides derogatory items. For example, the ability to pay down revolving debt, the type of credit you have, your length of credit history, and even the number of inquiries on your credit file. It is especially important that no current accounts fall into a negative status.
HOW LONG DOES THE PROCESS TAKE?
Everyone’s credit situation is completely different, so how long it takes for you to achieve your expected results depends on the number of derogatory credit items on your reports, your participation in getting credit reports to us, and the level of credit bureau cooperation. We will do our part, the auditing, and creating dispute letters based on your reports, usually within 48 hours from the date we receive them. Most of the wait-time after is usually spent waiting for the credit bureaus or creditors to respond.
WHAT DO I HAVE TO DO?
Once you Enroll in Our Service, you will choose Credit Restoration from the menu. You will then follow our simple process to dispute negative items on your credit report. Watch the video below for details.
CAN I RESTORE MY OWN CREDIT?
Yes, you can. You can also represent yourself in a court of law, and do your own oil changes on your vehicles. We are a service company. Just as you are probably better at what you do than we would be, we are probably better at credit restoration than you would be. We offer experienced, professional help at very affordable rates for your convenience and benefit.
CAN YOU REMOVE A BANKRUPTCY OR FORECLOSURE?
Yes. If the listing is inaccurate, incomplete, misleading, or unverifiable, it can be removed. The severity of bankruptcies, foreclosure, liens, etc. does not factor into their removal as much as you would believe. There are a number of elements, unrelated to severity, upon which such items can be successfully removed.
WILL THE CREDIT BUREAUS RESPOND TO ALL OF THE DISPUTES I SEND THEM?
The credit bureaus are required by law to respond to all correspondence. It is not uncommon for credit agencies to send letters stating they want more information, or that they will not re-verify an account. These types of responses are very common and customers should not be alarmed if they receive them. Customers must continue to send all correspondence they receive from the agencies to the processing center.
HOW LONG WILL IT TAKE THE CREDIT AGENCIES TO RESPOND AFTER I SEND THEM MY DISPUTE LETTER?"
You will receive updated credit reports from all three credit bureaus after 30 to 45 days. At that time you will see what was deleted. However, you could see your score increase beforehand by logging into your Membership.
HOW CAN I CHECK MY PROGRESS?
Check your progress 24/7 by logging into your online Membership account.
HOW DOES MY CREDIT SCORE CHANGE IF I OPEN OR CLOSE CREDIT ACCOUNTS?
At first glance, it may seem like a good idea to close old credit accounts or open a host of new ones. But it’s not. More accounts can hurt, not help. Financial experts agree that you should not open multiple new accounts just to show a credit history. If you have had little credit in the past, build your credit history slowly. Open no more than one or two accounts initially. Also, don’t close your old accounts. Long credit history has a positive impact on your credit score. Having a large number of accounts in good standing with zero balances is a plus, not a negative.
IF I KEEP PAYING MY BILLS WILL THAT RAISE MY CREDIT SCORE?
Paying your bills on time should do nothing but help your credit score. Good payment histories will help clients who are trying to buy a home, refinance a home, or qualify for new credit.
WHEN THE PROCESS IS COMPLETED WILL I BE APPROVED FOR A LOAN?
You should be in a much more favorable position as long as you meet several requirements of the credit grantor, such as a good credit history over the past 6-12 months, length of employment, debt ratio, length of time at current residence, and have the amount of the down payment, etc.
AS A CLIENT, WHO DO I CONTACT IF I HAVE QUESTIONS?
You can access our Help Desk from your online account 24/7 or call 727-222-0120.