Credit Repair is legal. Can you really improve your credit score? There are a number of federal and local laws that govern the reporting of consumer credit information. Each of these laws offer provisions for the consumer to challenge information that is reported by the credit reporting agencies that is erroneous or just reported wrong. So first we must know that credit repair is legal.

Are Credit Repair Companies Legitimate?

In the past many credit restoration companies where either out right scams, multi level marketing schemes, pyramid companies or just ma and pa shops that would take advantage of the vulnerable consumers. Today there are laws that protect the consumers against such companies. The Federal Trade Commission as well as state agencies monitor these companies and are tasked to enforce the applicable laws that govern such repair and restoration entities. Also the legitimate companies thought it important to monitor themselves so the formed trade associations like many other industries to set higher standards of protection and service for the consumer. These associations set the bar high for companies seeking to be associated with them so they can improve the image of the industry, especially member companies. So with a little due diligence it is easier to find reputable credit improvement companies that do not over charge and under deliver.

Does Legal Credit Repair Work.

Yes it does. There are thousands of people who have their credit improved with the assistance of such companies every month. I could ask you to take my word for it, but who am I to you? This is a testimony of a loan officer who submitted one of his customers to have their credit score improved and a mortgage late payment removed and here are the results:

I referred a borrower over mid July with a score of 598.  Not quite 2 months later, I repulled credit to find his middle score jumped 100 points!!!   And a mortgage 30 day late was taken off.  The loan is going to be subbed tomorrow!  Love it when that happens.  I was honestly just hoping that I could get his score above 620 to do an FHA refi.  After having a conversation with Specialized Credit, we decided to re-pull credit and see what we could do.   After pulling credit, he now has a mid score of 680 and his 30 day mortgage late was no longer there.  Not only could I do a refinance for him, I can now go conventional at a lower rate with no mortgage insurance.  Saving him $768 a month by paying off credit card debt that he is now paying 14% on.  Taking his mortgage rate from 6.625% to 4.875%.  This also gives him 20K cash out.  HUGE deal for him.  He is taking care of almost $15,000 in credit card debt and getting 20K cash out for a lower payment than he is paying now on his mortgage. Thanks Specialized!!! That is a $4K deal in my pipeline!!!

Marty Blackmon
Loan Specialist
Salt Lake City, Utah

See The Benefit.

This is not just to improve a credit score. Credit restoration is all about a financial benefit. In this case the customer lowered their interest rate and saved over $750.00 per month plus put $20,000.00 in cash on top of the savings. Yes being able to improve your credit score is a great feature. To lower your mortgage payment and get cash out as you refinance and consolidate your bills is the benefit that makes it all worth while. If you are a consumer who wants to improve your credit score send me an email at louisj@howtogetthebestcredit.com or leave a comment below. All comments are moderated and we will not publish or share your contact information.

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Many people want to improve their credit worthiness. Over the years lenders and creditors have evolved from looking at a credit profile and credit history to relying on a computer to determine your credit worthiness. Many creditors had a developed a credit score system that they would use in addition to a manual review. Creditors and lenders still have their internal credit scoring systems that place a different emphasis on different criteria. The basic criteria is universal and to improve your credit worthiness you need to work on all aspects of your credit profile. Whether you are buying a home, a car, furniture or just getting a credit card these 3 to 4 things are what make up your credit worthiness.

Capacity: Ability to Repay

Typically this is a calculation of your debt to your income ratio’s. For most creditors they review how much gross income you have coming in and compare it to your long term debt. This is a very important quantitative analysis that tells the credit what ability you have to repay a loan. Everyone is different. Every situation is different. In general people who do not have enough verifiable income to pay all their bills have a hard time doing so. Additionally, there must be a history of receiving the income and reasonable expectation that it will continue. To improve your credit worthiness increase your verifiable income and or decrease your long term debt.

Collateral: Security if you do not pay

Every extension of credit has a certain amount of risk involved. There is no risk free transaction. Therefore the strength of the collateral will improve your credit worthiness. For instance; if you are buying a home or a car and putting 50% of the purchase price down to finance the balance. The home or car will be the security for the loan and the creditor knows they have strong collateral and will be more apt to extend credit. On the other hand, if you are applying for an unsecured credit card or are putting little to no money down to purchase a car or home, the lender knows they have little to no collateral. The risk is higher and the creditor is more reluctant to extend credit.

Credit: History of how you have paid in the past

Many people believe that your credit history or worse yet your fico score is the only determining factor in credit worthiness. Yes in very few programs it is. But overall it is just another piece to the puzzle. If some one has a great credit score with not verifiable means to repay a loan or little or no collateral the risk are very high. These are not good loans to make. So yes it is import to pay your bills on time and improve your credit score but truly it is only a part of your credit worthiness.

Character: Subjective personal profile to guess if you will pay

The final “C” that many creditors look at is the character profile of a customer. How long have they been on their job and lived in their home. How stable are they. Do they have a bank account and established pattern of savings. These and other characteristics point to stability. To improve your credit worthiness increase your stability.

We may be a strong in one area and weak in another. The strength of the entire credit profile is reviewed to determine your credit  worthiness. Improve where you are weakor even improve your strengths and you improve your credit worthiness. But financial success requires that you know, understand and manage your complete credit profile.

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To get the best credit and interest rates you must have the best fico credit scores. These strategies will help you improve your fico credit scores and qualify for the best mortgage rates, auto loan rates and credit cards. Implement these to improve your credit score today.

Legal Credit Repair.

You have the right to legal credit repair. Whether you do it yourself or hire a professional company to assist you to remove items off of your report that are either inaccurate, improperly reporting or just do not meet the legal standards required for the credit reporting agencies to follow in reporting your credit history. So the number one strategy that many people use to improve their credit scores is to dispute those items. It is an effective method especially if the you stick to it. Unfortunately, the credit reporting agencies are not eager to help you. In some cases they have been known to arbitrarily dismiss many consumers disputes as frivolous and unfounded. This deters a lot of people. It has been said that as much as 20% of all disputes submitted to the credit reporting agencies are dismissed as frivolous. That means 80% are reviewed and worked on. Chances are if you dispute the inaccuracies one or 2 more rounds that they will be properly reviewed and handled.

Reduce Your Balances and or Increase Your Credit Limits.

A second strategy almost as effective as disputing negative items on your credit report is to reduce the balances on your credit cards and or increase your limits. The balanced owed on a credit card as a percentage of the high credit limit affects your credit score. They higher that ratio the lower your score. The lower the ratio the higher the score. This factor alone can account for one client who pays his bills on time every month with a credit score of 750 while another client who also pays their bills on time every month only has a 600 score. A 750 is considered very good credit while a 600 score is fair and the consumer would not qualify for most credit programs. If they do qualify they would pay a higher costs. On time payments account for 35% of your credit score. The available credit percentage factor represents 30% of your credit score. These two strategies alone can account for 65% of your total score.

Negotiate Old Collections and Late Payments.

The older negative items are on your report the less impact they have on your credit score. To improve your fico credit score you want to remove them completely from the report. If you pay them off or make payment arrangements you create a new activity that make the negative item a recent activity therefore effectively lowering or worsening your score. This is the exact opposite of what your intentions may be. To improve your score negotiate with the creditor to pay the item off at a reduced amount and for that they must complete remove the item from the credit bureau. You must get this in writing before you send them the money. Otherwise they have no incentive to follow through and remove the item.

Finally Strategies.

These three strategies will help you improve your credit score and allow you to qualify for the best credit at the lowest interest rates. Other strategies to remember is time. The longer an account is open the more positive points you add to your credit score. The type of accounts you have also affect your score. Mortgages and installment loans have the highest value, then major bank credit followed by national department store accounts. All other accounts, though they affect your credit score they have less of a positive impact. Use these strategies to improve your credit, get a mortgage, credit card or auto loan.

Louis J.

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Manage Your Credit Score.

The days of easy credit are long gone. With the economy being in turmoil and the banking system suffering massive losses over the last couple of years it is so important that we are diligent in managing our credit and managing our credit scores. To qualify for a home mortgage, have a car financed and even get a credit card today requires a higher credit score than years past. Therefore it is so important that we make sure our FICO scores are as high as they can be.

Improve Your Credit Score.

Many people falsely believe that just by paying their bills on time they will have a good credit score. This is the furthest thing from the truth. As a matter of fact your payment history only accounts for 35% of your FICO score. There are people who are never late on their bills with a 600 score and some with an 800 score. These tips below will help you improve your credit score.

1. Reduce the balances on your credit cards.
2. Increase the limits on your credit cards.
3. Try not to close out an account even if you no longer use it. Length of history increases your score.
4. Monitor your history with an credit monitoring service.
5. Limit inquiries to your accounts.
6. Do not frivolously apply for credit. Excess credit lowers your score.
7. Review your credit reports annually for errors and dispute any negative items.

These seven tips can help you keep your score high and help you qualify for financing and get the best rates available.

Risk Based Pricing.

This is not a new concept but it is very prevalent in today’s market. What risk based pricing means is that lenders access the risk and price accordingly. Your credit score is a primary factor and sometimes the only factor that determines the risk to a lender. Therefore, the higher you score the lower the risk. The lower the risk the better the pricing. Conversely a low score will cause you to pay much more for the same services. Hence the importance of managing your credit and especially your score.

Your Mortgage.

As a mortgage banker for over 20 years I have never seen credit as tight. In the past if you had a stable job, made your payments on time and could afford the payments based your your income and existing debt you would qualify for a mortgage. But with the advent of the computer models and easy credit that backfired credit is tighter than ever. Worse than that people who have always been faithful to pay their bills on time are suffering. As we fight to change the system by supporting politicians whose plans will make this an equitable playing field, we must learn to ensure we get the best financing options possible. That means focusing our efforts to manage our credit and our scores based on the 7 tips above. This way you can get the best credit score and the lowest rates possible.

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Debit cards can be somewhat misunderstood because SOME of them have activation fees and monthly fees. But are there certain advantages that only prepaid cards provide?  In this article, let’s consider advantages that prepaid cards bring:

1. Spend only the money that you have.  When you make a purchase and charge it to your credit card, technically, you borrow the money from the credit card company in order to make the purchase and you pay it back at a later time.  Prepaid cards allow you to only spend the money you have in the attached account.  With a debit card, you are more conscience of what you spend since you know once you have spent all the money in the account, that’s it, the card will not allow further purchases.

2.  You spend only as much money as you load onto the card.  Credit cards can lead to overspending and breaking your budget.  Since you can charge as much as you want on a credit card, you risk going over your budget if you’re not careful.  This is impossible with a prepaid debit card.  With a debit card, you can only charge the amount that you have in your account.  Spending more than what you have is simply not possible.

3. A convenient tool for small business entrepreneurs.  Business owners and entrepreneurs will find giving debit cards to their freelance workers as a convenient and inexpensive way of sending payments.  Are your freelance workers working outside of your State or from another country?  It doesn’t really matter.  You can use your debit card for sending money anywhere in the world.

4.  Prepaid debit cards are convenient for transferring money.  Aside from business owners, parents too can find debit cards really useful when transferring funds to their kids who are in college.  Debit cards provide worldwide services so you can send money to anyone wherever you are in the world.  Wire transfers and western union can be pricey.  Debit cards are a much cheaper way of sending payment.

5. Company owners can use prepaid debit card in paying employees.  With a few clicks of your mouse you can schedule payroll for your employees to be automatically deposited on to their debit cards. Thus eliminating the need to mail out checks.  This is advantageous for employees as well since they can choose to withdraw their wages at their most convenient time.

6. Debit cards are useful tools for those with no bank accounts.  Having a checking account isn’t needed in order to open a debit card account.  You can use your paycheck or any automatic payment to set up your account.  If you want to do your shopping without the need to bring cash, you can use a debit card instead.

7. Prepaid debit cards are easier to get approved for than credit cards.  Credit card companies have adopted strict credit score requirements.  On the contrary, anyone can apply for a prepaid debit card and get an approval.

In fact, people with bad credit or low credit scores can apply for a debit card to improve their credit status.  Once their credit is improved, they can apply for credit cards with better rates without getting declined or refused.

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Go- Prepaid (http://www.go-prepaid.com ) is a resource site for people who want to live debt free! If your on a budget using pre-paid credit cards and pre-paid cell phone services can save you big money!

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