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10 Little-Known Benefits of a Better Credit Score

By | Credit Scores

Better Credit Score Ovation

There are many reasons why you want to make sure your credit score is as high as possible; it’s not just to ensure you can qualify for a credit card or mortgage. Take a look below at 10 little-known benefits of better credit scores that you’ll want to learn right now.

1. Moving Violations Don’t Hurt Your Credit Score as Much

It’s unfortunate, but a moving violation can cause your insurance premiums to go up. The amount of the increase ranges depending on the situation. Your risk level is also taken into consideration. A big part of this is your auto insurance score, which is almost the same as your basic FICO score.

So, you’ll find yourself in a much better situation after a moving violation if you have good credit. In fact, the amount your premiums could go up may be as much as $1,000 a month after a single violation. Yet, if your credit-based insurance score is strong enough, you might only see a smaller increase of $100 to $150 per month.

2. You Can Negotiate With Insurance Providers

Companies that offer auto and homeowner insurance typically use the credit-based insurance score to determine your risk level. If your score is strong, it’s possible to negotiate a better insurance premium.

Additionally, if you can prove your risk level isn’t as high as it seems, you may be able to improve your credit score, and your current insurer may reduce your premiums. If you are rejected, it doesn’t hurt to check whether other insurance companies are willing to offer more competitive rates.

3. Renting a Home Gets Less Difficult

A typical tenant screening process involves a credit check. The landlord or property manager might not care if your credit isn’t good. However, there are many that will use this as a quick way to deny your approval. Someone renting out a place is likely to see your good credit score as proof of your financial stability. Therefore, if you have excellent credit, you’ll get priority dibs for the rental properties you can afford.

4. Reward Cards Become a Lot More Rewarding

You can qualify for any reward credit card when you have excellent credit. This gives you the opportunity to earn cashback rewards on all the shopping you do. The best reward cards sometimes pay as much as 3 to 5 percent back on all your purchases. In the end, you could save thousands of dollars every year by taking advantage of rewards programs.

5. Signup Bonuses Get Better

It’s important to inspect all terms before you apply for a credit card. Picking one just for the signup bonus isn’t a good idea. However, sometimes having excellent credit can gain you access to incredible signup rewards. There are travel reward credit cards that pay especially well. In fact, some signup bonuses can be worth $1,000 or more.

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6. Better Credit Score = Tier 1 Borrower

Many banks and lenders categorize borrowers by tier level. There are three tiers, which essentially put a borrower into one of three borrowing statuses. You’ll either be ranked as “Good”, “Better”, or “Best,” depending on your FICO score.

The cutoff depends on the company reviewing your file. Sometimes, you’ll need at least a 750 score, but on other occasions, you might require at least an 800 score. So, having as high of a credit rating as possible will ensure lenders consider you as a top tier borrower. This will result in optimal interest rates and a higher chance of approval.

7. Starting a Business Is Less of a Struggle

Most small businesses require a bit of startup capital. Without it, you have a much higher chance of experiencing failure. This is because there are many startup costs and scaling expenses you can face along the way.

Also, if your personal credit is excellent, your business creditworthiness will be sky high. This could mean that you can borrow as much as you need instead of getting capped at a few thousand dollars. If you like, all your monthly expenses and sudden purchases can go under one business card, as well.

8. Skipping the Paperwork

You are pre-approved for many credit opportunities. This ensures less paperwork when you do want a new credit card or loan of any sort. You also get to enjoy shorter wait times when you apply for new credit.

9. Qualifying for Unique Financing Options

There are certain types of financing that are not available to the average borrower. For example, you need to have excellent credit to qualify for a vacation home rental unless you make a a sizable down payment.

10. Real Estate Investments Become Trivial

Now, you have easy entry into the real estate market. You can qualify for mortgages with little down. Your interest rate is super low, so your holding costs are kept to a minimum. Sometimes, you can even get into a great deal without making a down-payment. Then, it’s just a matter of getting renovations done, which you might be able to get cheap financing on, as well.

Increasing your credit score will do you and your family good. The key is to not use your financial strength for impulsive spending or unnecessary expenses. Heed this advice, and you can enjoy the financial gain behind your excellent credit status.

Boo! Credit Scores Can Be Scary, Fear Not with These 5 Secrets

By | Credit Scores, Uncategorized, Your Credit

Credit score repair company

Credit Scores can seem scary when you think about how that three-digit number can affect so many financial decisions in your life. Frightening enough, that score can then scare away lenders when you’re applying for a loan or a mortgage. The ones not frightened away give you a horrifying interest rate!

Before you go and hide under your covers, here are 5 ways to calm your fears and improve your credit score.

1. Pay Off Your Balances, Especially Large Ones, Quickly

This pointer might sound obvious, but the sooner you can eliminate your balances, the healthier your credit score will be. If you make a hefty purchase with a credit card, try to pay it off right away, even if you must sell a favorite possession to obtain the funds. When you do so, you might find that your score goes up substantially. Plus, you’ll lower the interest rate you’re paying. At the very least, try to pay down your highest balances to the greatest extent that you can.

If you’ve routinely paid your credit card bills late, don’t fall into despair and assume that punctual payments won’t do you any good now. Instead, start paying those bills on time. Despite your history, your credit score will eventually reflect your newfound effort. What’s more, you’ll get into a good habit.

Remember as well that you can use an online service that will automatically pay your credit card debts each month. Such a tool will ensure that you won’t ever forget one of your bills.

2. Consider a Debt Consolidation Loan

You could speak to a financial expert about taking out a debt consolidation loan. This solution isn’t ideal for everyone, but perhaps you’d benefit from one.

First, you might find it easier to pay off your credit cards by combining the amounts of money you owe to various credit card companies into one sum. It might feel less painful to make a more substantial payment each month rather than a series of smaller payments. Plus, you won’t accidentally overlook a payment that you owe. Even more appealing, your overall interest rate will be lower. And taking out such a loan might soon result in a higher credit score.

3. Bring Your Credit Utilization Ratio Down

Your credit utilization ratio is the portion of your total credit limit that you spend every month. This ratio should be less than 30 percent. Of course, that number might sound low, especially if your limit is less than $1,000.

Keep calculating your credit utilization ratio each month. If you find that it exceeds 30 percent, try to pay more with cash or a debit card. You could also try to make fewer purchases, rely on coupons and discounts more often or start shopping around for less expensive products and services.

Another way to improve your credit utilization ratio is to ask for a higher line of credit. That way, you might not need to reduce your spending rate. If you have any credit cards that will grant such an increase without investigating your credit, consider making this request. Just be certain that none of those companies plan to do a hard credit check; having such an inquiry performed lowers your score a little.

4. Don’t Be Afraid to Use Your Credit Cards

Even though it’s important to keep your credit utilization ratio down, you should still be making regular purchases with all of your credit cards. Spending with your plastic and then making your payments in full is a highly effective way to raise your credit score. By contrast, when you completely avoid taking your credit cards out of your wallet or purse, you’re not doing anything positive for your credit report. And closing one or more of your credit cards could actually hurt your score.

On top of that, using your credit cards might allow you to collect exciting rewards. Possibilities include securing special deals on airfare and hotel stays as well as getting cash back when you buy certain items. Why pass up those goodies?

5. Seek Help from an Outstanding Credit Repair Service

Finally, a dependable credit repair service can help you boost your score and maintain that higher number over the long haul. It can keep careful track of your credit report and identify any mistakes or irregularities that might be unfairly damaging your credit.

The experts who work at such a company could also sit down with the credit card companies and other parties you owe money to. And they might be able to hammer out new agreements that are more lenient and favorable to you.

So there you have it: five financial tricks that can lead to real credit treats. These actions could provide you with the monetary rewards ― including better loan terms and insurance rates ― and the peace of mind that come with a healthy credit report.


Credit Score Hit – Is the 10% Offer Worth it?

By | Credit Cards, Credit Scores

Credit Score Retail Credit Cards

We’ve all been there. You are out the checkout counter of a fancy department store when the cashier asks “Would you like to open a store credit card and receive 10 percent off your order?” On the surface, it sounds like a great deal. Who doesn’t like to save money? Plus, many retailers will offer additional benefits to cardholders, like 10 percent off every time you shop, or even special sales that are only for credit card holders.

The problem is that opening retail credit cards can affect your credit score (yes, even if you pay them off each month), and all the credit repair in the world won’t help if you are constantly adding to the problem. Here is what you need to know:

Regret is Real

According to Today, roughly half of all people who open retail store credit cards regret doing so. “You need to understand all the terms and the potential collateral damage that you might cause yourself,” says credit expert John Ulzheimer. “If you’re going to carry a balance on that new card for even a couple of months, you’ll give back any sort of discount you received at the register – and then some – in the form of interest.”

High Interest is the Norm

The discounts stores offer to people who open credit cards are there for a reason – the stores make money. It is not unusual for a retail store credit card to charge interest rates over 25 percent, even for people with good credit. Stores like TJ Maxx, Staples, Toys R Us, and JC Penney each charge their retail credit card customers annual percentage rates (APR) of 26.99 percent or more. Even Amazon charges its customers 25.99 percent APR.

It All Adds Up

Some retail store credit cards do charge less interest, but the average is still a whopping 23.4 percent APR. “Let’s say, for instance, that you rack up $1,000 in debt on a typical store credit card. You’d pay off the debt after six years, paying $833 in fees, if you paid only the minimum each month,” explains Time’s Money. “On a card with an APR of 15%, by contrast, you’d pay off the debt 18 months sooner and save $463.”

It Hurts your Credit Score

Even if you are committed to paying off your retail store card each month, there are still consequences. For one, expect your credit score to take a hit. According to Forbes, “If you already have a limited credit history, or if you’re straddling the line around 700 FICO, this could potentially move you from ‘good’ to ‘average’ credit and negatively affect your interest rates and credit allowances on future loans (like auto loans, mortgages, and even low interest credit card deals).” The thing is that your retail store credit card is treated like any other credit card when it comes to your credit score. You’ll get dinged for making the credit inquiry, hit for trying to open too many cards in a short period of time, and pinged if your credit utilization rate goes up (that’s the proportion of your credit card balances to your credit card limits).

Options are Limited

Also, just because you can qualify for a store credit card, it doesn’t mean you will actually get a credit card. You will still need good credit to qualify for a store credit card that is co-branded with American Express, MasterCard, or Visa. Without it, or if the retail store you are shopping doesn’t offer a co-branded credit card option, you will be stuck with a credit card that impacts your credit score but has a low credit limit and can only be used at that retailer.

At the end of the day, the 10 percent offer simply is not worth the hit to your credit score, let alone the extra interest you’ll pay and the limitations on how you can use it. If you have questions about retail store credit cards, other things that affect your credit score, or want to know how to repair your credit, contact us. Ovation Credit Services can review your credit report and design a personalized plan for repairing your credit that takes into account your unique credit situation as well as your financial goals.

If your credit score has taken a hit from too many retail store credit cards, we can help with that, too. Ovation Credit Services offers personalized credit help to help get you back on track and get your credit score back to where it should be. Contact us for more information.

4 Tips to Prevent Personal Liability With Business Credit Cards

By | Credit Cards, Personal Finance

Personal Liability Business Credit Cards

Are you starting up a small business? If so, there are many things you have to think about. You must consider variables like accounting, legal and tax concerns, and even what exact type of business you need to register. So it should come as no surprise that you could make a mistake that you will regret in hindsight.

The perfect example of a common “fork in the road” for business owners comes when getting business credit cards. This is a potential roadblock that many new business owners do not expect. Yet, the problems that could come up are sometimes extreme, which is why you must know what to expect ahead of time. One particular risk relates to putting yourself personally liable for your business debts. While this is fairly standard and most business card providers require a personal guarantee, you can find some workarounds to avoid this issue.

Personal Liability and Business Credit Cards

You might not be aware yet, but you usually qualify for business credit cards based on your personal credit. As a small business owner, this means you need to have good enough credit to qualify for a business credit card in the first place. Otherwise, it would be necessary to secure the credit card by giving a deposit of up to 100 percent of the card’s limit.

Even if you go the unsecured route, it’s possible that the card issuer reports your account to the major credit bureaus. Most of the time, this means Equifax, Experian and TransUnion factor your business card into your credit report and score. While you might think of this as a plus, it’s unfortunately a big problem.

How Business Credit Cards Can Destroy You

Say you took out a mortgage that’s fixed for five years, four years ago. What happens when you go to refinance?

Well, unfortunately, that all depends on the specifics of your business credit. Worst case scenario, you are unable to refinance your home because your credit rating suffers a dramatic drop. You can expect to see your score fall by upwards of 50 points just because of the new accounts. Even worse, if your running costs are sky-high, the card you need (even if secured) will cause your total debts to read sky-high.

Simply put, you DO NOT want your business credit card to mix with your personal credit information.

Avoid Personal Liability at All Costs!

This is not something you want to push aside, because chances are you will seriously regret doing so in the future.

Even if you have a $300 card for your business, you might find yourself increasing the limit later. This will just increase the amount of damage done to your FICO score. You cannot create a net-positive impact this way; surprisingly, this is the one scenario where it’s understandable for your credit rating to go up if you were to close your account.

Remember: Just because it’s a “business credit card” doesn’t mean they report to business bureaus!

Nevertheless, your business credit card is incredibly important. You will need to apply for one either way, but at least consider the workarounds that are available. Since there are many solutions, you do not need to assign personal liability to get a credit card for your small business.

Here are four quick tips that can help you out:

1. Find Card Issuers That Report to Business Credit Bureaus Only

You can get a card and only have it show up under one of the major business credit bureaus. To do this, you need to have a DUNS number for your business. DUNS stands for Data Universal Numbering System. This was created by Dun & Bradstreet, one of the major business credit bureaus. The other two major bureaus are Equifax Business and Experian Business.

2. Consider Alternative Financing Methods Instead

There are always other financing options available. One great workaround for small business owners is Amazon.com’s Corporate Credit Line. But when you get into these alternative options, you always have to consider whether the higher interest rate is really worth it. If you choose this option, look specifically for corporate credit lines through lenders authenticated by the Small Business Administration.

3. Incorporate or Register as an LLC

If your business is an LLC (Limited Liability Company) or a corporation, you can exempt yourself of some liability. This will not save you if your business credit card defaults. However, if you ever get sued it will exempt you from being financially liable. If you do not incorporate or register as an LLC, you will not get this protection.

However, things can get a little hazy. If you do get sued and you expect to lose big time, your business credit cards should be paid off and canceled. Doing this will prevent your credit from getting hurt if the claimant wins the lawsuit and your business debts default. This is a rare scenario and generally not something to worry about.

4. Move on to a Commercial Liability Card Later

It is possible to qualify for a commercial liability credit card once your business establishes a quality borrowing history. But you will need both a good personal credit record and a good credit report under your business’s file. This type of business credit card is backed by your business in the event of a default. Typically, you would do this if you run a larger business and you have major assets to back your corporate cards. After your small business develops a credit history and gains traction, it might be worth applying for a commercial card.




The Pain Lives On –Unpaid Medical Bills and Your Credit Score

By | Credit Scores, Debt

Medical Bills Affect Your Credit Score

A serious illness or injury can not only impact your physical and mental well-being, it can also hurt your credit score. Medical bills simply can’t be avoided in many situations, and sometimes, the amount you are expected to pay is quite high. Know you’re not alone. Medical debt has continually been the leading cause of bankruptcy in the United States. It’s not unheard of for up to 20 percent of Americans to hear from medical debt collectors in a given year.

Those numbers are staggering.

If you have unpaid medical bills piling up on your financial table, it’s important to understand when and how this will affect your credit score. Here’s all you need to know.

Unpaid Medical Bills Aren’t Factored Into Your Credit Score Right Away

Generally speaking, healthcare providers don’t report payments–or missed payments–to credit bureaus, as they usually have no direct relationship with them. If you are having trouble paying off the bill, and your healthcare provider does turn the bill over to an agency, it will then be calculated into your credit score. It will negatively affect your payment history, which makes up 35 percent of your FICO® score, and your current loan and credit utilization ratio, which makes up 30 percent of your score.

So, if you have an unpaid bill, what you need to look out for–and ask about–is when that bill will be handed to a collection agency. Because then it will start hurting your credit. Note that while hospitals and healthcare institutions give collection agencies more business than financial companies, that doesn’t mean they contact the agency if you’ve missed one or two payments. You usually get a reasonable amount of time, though that isn’t always the case with certain medical providers. The hospital or medical establishment could give you anywhere from a few months to a few years to pay the bill. Thankfully, the Healthcare Financial Management Association (HFMA) and ACA International are working to establish standards for medical debt collection in an effort for more transparency and less unwelcome surprises.

In order to avoid letting an unpaid medical bill go to collections, talk with your medical provider’s finance department immediately after getting the bill. Ask about financial assistance and attempt to work out a payment plan that fits your current economic situation.

How Much and for How Long Does an Unpaid Medical Bill Hurt Credit?

Depending on your current financial situation and the amount you have left to pay on the health bill, your score could be affected by as little as a few points to 100 or more points once it’s reported to a credit bureau, according to Anthony Sprauve, a FICO.com spokesperson. That’s a lot, and that will certainly impact your ability to get affordable loans and funding from financial institutions.

There is some good news, though. If the amount is less than $100, it will be ignored by FICO®. Moreover, while an incident like an unpaid medical bill being handed over to collections will stay on your credit for seven years, the impact lessens over time. If you practice good financial habits after the incident, such as paying off credit cards in full each month and cutting down on other debt, your score will also rise back up more quickly.

Additionally, although the FICO 9 credit score is not widely used by lending firms yet, it does not weigh unpaid medical bills as heavily. Such credit scores could become more mainstream in the future. Law changes in the future from government agencies like the IRS could also place limits on a medical institution’s right to turn over bills to debt collection firms, especially nonprofit healthcare providers.

What If the Unpaid Medical Bill Was Actually Paid, And Still Reported to Collections?

Healthcare systems are far behind financial institutions when it comes to tracking payments and keeping accurate records. There is simply too much disconnect between departments and systems, and sometimes this leads to a paid bill being mistakenly tagged as unpaid, and subsequently being reported to collections. It could also lead to a wrong charge and higher bill.

This is why Congress has been working to pass medical debt acts that give patients time to address inaccuracies before credit scores are hurt. If your unpaid medical bill is already being reported to credit bureaus, and you believe there is an inaccuracy, don’t throw your hands up in defeat. Take the following steps:

  • Gather documentation that proves the services rendered to you and/or the payments you’ve made.
  • Write a dispute letter to all three credit bureaus.
  • Stay in contact with those credit bureaus and your medical provider, and be ready to submit other evidence if requested.

While it you may not win this dispute, it’s certainly worth it. If you prove you’ve paid the bill or you’ve been wrongly charged extra, you’ll get the incident waived from your credit report.

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Keep on Fighting

Even if an unpaid medical bill has already harmed your financial health, know that the pain can be ended. Start by practicing good money habits, and, if that bill is still looming over you, try to negotiate payments and/or assistance. A billing advocate or lawyer can also help you negotiate bills and perhaps lower the amount to be paid.
Also, if you wish to see a higher score on your credit report more quickly, credit repair companies can help. Ovation Credit, for instance, can help clean up discrepancies and outdated information on your credit report, which will help boost your score in no time.









Credit Score – 4 Reasons It Matters During Retirement

By | Credit Scores, Your Credit

Retirement and Your Credit Score

You’ve reached your retirement years. Congratulations are in order. What’s more, you might have enough money to live on thanks to some combination of savings, investments, a pension and Social Security payments. On top of that, you might not be planning to make any major investment, such as a new home, in the future. So who cares about your credit score, right?

Well, this idea is a common misconception among seniors. In fact, your credit report will matter a great deal to you for the rest of your life. Without one that’s above average, you won’t have access to the following financial benefits.

1. Loans

For one thing, your car could stop suddenly working due to age, an accident or another problem. If you want a decent chance of securing an adequate car loan, you must have good credit.

Likewise, the need for an emergency loan might arise. It’s certainly horrible to think about, but household accidents, abrupt illnesses and other crises can happen at any time. To avoid paying an exorbitant interest rate on such a loan, a high credit score is again essential.

2. Refinancing

The Consumer Financial Protection Bureau reports that 30 percent of Americans who are at least 65 years old make mortgage payments. In addition, the research company Strategic Business Insights has found that about 40 percent of Americans who are between the ages of 60 and 64 have mortgage obligations.

If you’re in one of those groups, you might want to ease your burden at some point by refinancing your mortgage, especially in a time of low interest rates. However ― and you may be noticing a pattern here ― you won’t be eligible for those low rates if you lack an acceptable credit score.

Not to mention, if you ever find yourself in trouble financially, you might wish to negotiate a cash-out refinancing. Doing so should be a last resort, but if you’d like access to such funds, you’ll probably obtain better terms with a strong credit report.

3. Rewards Cards

You might have a longtime aversion to using credit cards. And it’s true that a person who has trouble paying off credit cards would be wise to avoid them altogether.

On the other hand, if you’re diligent about paying your debts, your plastic can actually provide financial relief. That’s because it can give you so many rewards.

For instance, a cash back card will essentially supply you with free money as you make purchases, and those bonuses can really add up over time. Plus, credit card companies often give people small sums of cash just for signing up.

Frequent travelers can especially benefit from credit card usage ― by using platinum rewards cards in particular. That’s because those cards can help you earn free nights in hotels as well as discounts on airfare, rental car insurance, luggage fees and more.

However, if your credit score is poor, it’s unlikely that you’d be eligible for any cash back cards, let alone one at the platinum level.

4. Insurance Rates

It’s wise to keep looking for the best insurance rates you can, even if that means switching companies from time to time. Why spend money on your insurance unnecessarily?

It might not seem fair, but home and car insurance providers might take your credit score into account when they’re determining your monthly rates. Yes, a low score can mean higher costs.

The thinking behind this strategy is that people with good credit scores are responsible individuals and less likely to cause car accidents, leave their homes unsecured, start fires by accident and so on.

So How is Your Credit Score?

At this point, you might realize that you’ve been neglecting your credit score for a while; you might even be starting to worry. Fear not. There are plenty of ways to boost it. To give you just a few examples:

  • Always pay all your bills on time.
  • Remember that not using your credit cards won’t help your credit score. If a credit card company ends its relationship with you because you’re not taking advantage of its card, it could hurt your credit score. For the same reason, try not to close your credit cards.
  • Use your credit cards for small, regular purchases, and make a habit of paying them off on the same day every month.
  • Keep searching your credit history for errors. If you have a friend or a relative who’s a financial expert, she might be able to help you find a mistake. Then contact the credit reporting agency that made the error to argue your case.
  • Obtain outstanding credit repair services, and watch happily as your score rises.

Finally, you’ll find that good credit brings an additional benefit, one that’s intangible yet invaluable: peace of mind. If your children or grandchildren need monetary help or if life throws an expensive curveball your way, you’ll have the means to improve the situation. After all, you’ve worked hard all your life. You deserve to enjoy your golden years without fearing financial hardships.








Improve Your Credit Score with Debt Consolidation

By | Credit Cards, Debt

Debt Consolidate Credit repair

Debt consolidation isn’t something that many people know about, but it can be a great way to improve your credit score and help you improve your overall credit profile. Why should you consider debt consolidation? The best reason is to better manage your credit, which can improve your credit score. For example, you may have a number of credit cards that are nearly maxed out. Having to manage multiple credit cards can cause stress and negatively impact your credit score.

How Debt Impacts Your Credit Score

According to FICO, a key element of your credit score is the amount that you owe to creditors. FICO says that 30 percent of your credit score is made up of amounts owed. Credit reporting agencies look at credit utilization as a factor in the amount that you owe. For example, using most of the credit line that you have available can reflect negatively on your credit score. If you have multiple cards that are near their limit, your credit utilization is high, and this can further deflate your credit score.

Ways to Consolidate Debt

You can consolidate debt in a few ways.

  • Balance Transfers – One option is to move balances from one or more credit cards to one that offers a zero percent interest rate or a low interest rate on transfers. You can quickly go from having multiple credit cards with high interest rates to a single card with a low interest rate.
  • Home Equity Loans – Over time, as you pay your mortgage and as the value of your home increases, you build equity. A home equity loan allows you to borrow against this equity and take out a lump sum that you can use to pay off high-interest credit cards.
  • Debt Consolidation Loans – These are loans from banks and specialty lenders and are designed specifically for the purpose of debt consolidation. Interest rates are generally lower than what you pay on credit cards, so your monthly payment may decrease.

The most important thing to remember when using any of these options is that you still owe this money, but you’re consolidating it with a single loan. The idea is to lower your interest rate, reduce your credit utilization, and get out from under the weight of managing multiple lines of credit.

Debt Consolidation, Not Settlement

Be wary of companies that offer “debt settlement” services, which differ from credit repair services. The Consumer Financial Protection warns against paying upfront fees to companies that offer to settle your debts. Debt settlement firms may request that you stop paying your creditors as a way to negotiate with lenders. This can have an immediate and detrimental impact on your credit score. A better option is to use a firm that specializes in credit score repair and works with you to fix your credit score. Ovation Credit Services provides tools to dispute inaccuracies on your credit report as well as education and advice on how to improve your score.


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Maintain Good Credit Habits

A debt consolidation loan means some of those previously maxed out credit cards now have credit available. After working so hard to repair your credit score, the worst thing that you can do is to start relying on these credit cards too heavily. You’ll find yourself back where you started – or perhaps worse off – if you aren’t careful about managing your money. Once again, a good credit repair service will provide education and advice on how to maintain a healthy credit score.

Ultimately, debt consolidation is a good way to remove some of the challenges and stresses of managing multiple lines of credit. It can also lower your monthly payments. Consider debt consolidation as a way to improve your credit score and your overall credit health.





How Credit Scores Impact Mortgage Loans

By | Credit Repair, Credit Scores, Home Buying, Loan, Mortgage, Your Credit

Credit Scores Impact Mortgage Loans

Are you working towards financing a home? You probably know how your credit rating will impact your loan qualification. You pretty much need the minimum credit rating for FHA home loans, which is a 580 FICO score. If you cannot qualify for FHA insurance, you will be hard-pressed to find any lender until you fix your credit.

There are many implications that your credit rating can have on your prospective home loan, such as whether you actually qualify for the mortgage, how low of an interest rate you will get and what type of lender will work with you.
Now, there’s also an unspoken factor: how much your mortgage will cost in total.

How Your Mortgage Could Cost More

When you apply for home financing with a bad credit score, it is unlikely that a major bank will approve you. Since it is the major banks that get the best borrowing rates in the first place, your alternatives will be more costly. In the worst case scenario, only a private lender would consider you.

You might be somewhere in the middle and can get a home loan through a financial institution that accommodates bad credit borrowers. There are many reputable lenders in this area, but you still face the issue of a higher interest rate. This is because the banks know you are a higher risk.

Tip: Get your mortgage through a highly legitimate financial institute that works with bad credit borrowers while also offering traditional home loans. That way, you can repair your credit while holding the costlier loan and refinance under the same lender after your credit score improves.

Your credit score does not have to hold you back from a mortgage. You just need to make sure it’s not unexpectedly costing you extra.

What Will Your Credit Score Cost You?

When applying for a home loan, your decided interest rate is mainly calculated based on your credit score. So if you were to apply for a mortgage right now, what would this mean to you?

It all depends on where you live …

Let’s use Manhattan, New York as an example, seeing as how even a one-bedroom will easily set you back $400,000 or more.

Say you are buying an apartment for $400,000 and you give the minimum of 10 percent down. This leaves you with a $360,000 principal to finance through a mortgage provider. Let’s say the mortgage will run for 30 years and it’s a fixed-rate loan.

Below shows your total interest cost for the lifetime of the mortgage. These calculations come from MyFICO.com’s Loan Savings Calculator, which estimates your interest rate based on your FICO score range.

  • 620 to 639 FICO score: $319,418 total interest (4.793% APR)
  • 640 to 659 FICO score: $277,706 total interest (4.252% APR)
  • 660 to 679 FICO score: $245,727 total interest (3.825% APR)
  • 680 to 699 FICO score: $230,167 total interest (3.613% APR)
  • 700 to 759 FICO score: $217,414 total interest (3.437% APR)
  • 760 to 850 FICO score: $201,683 total interest (3.217% APR)

To put it into context, you are looking at saving $117,735 over 30 years by financing with perfect credit instead of below-average credit. From another perspective: your monthly payment will be about $327 less!

How to Make Your Mortgage Cost Less

There are some tricks that can help you qualify for a more affordable mortgage. Four simple ways to do this include:

1. Refinance Your Mortgage After You Buy

Your mortgage payments go through on time for half a decade, and suddenly the huge debt does not keep your credit score suppressed. The result could be seeing your credit rating go up by a considerable amount since when you first qualified for the mortgage. If this is the case, you could refinance the mortgage to lower your interest rate and ultimately make the rest of the mortgage term cheaper for you.

2. Rent-to-Own the Place First

If you are repairing your credit, but you want your new home now, you could try to buy through a rent-to-own agreement. You will be able to guarantee the seller gets the asking price as long as you follow through with financing at the end of the term. While the rent-to-own contract will set you back a little in equity, the much lower interest rate will create much more savings.

3. Wait a Little Before Buying

While this is not the most exciting solution, sometimes it makes a lot of sense. Say you have a bad debt in collections from six years ago. If that’s the case, waiting roughly a year will cause the negative item to leave your credit report and thus it will not hold back your FICO score. The end result could be a huge boost in your credit rating, or at least enough to score you a better interest rate.

4. Purchase Under Owner Financing

If you want your new home now, but rent-to-own will not work, you might be able to purchase via owner financing. This means the seller holds the mortgage for you for so long (usually 1 to 3 years), and then you can get your mortgage and make a balloon payment to buy it out. You can use the in-between time to repair your credit and this will help you secure a good interest rate. In the meantime, you will be paying on the home under the current mortgage conditions and your bad credit status will not cost you more.

Owner financing is really the only cost-effective and sound way to approach buying a home with bad credit. Otherwise, you could be throwing well over $100,000 out the window. That’s a lot of extra money to pay, especially if you are actually eyeing a one-bedroom apartment.

To conclude, get your credit repaired before applying for a mortgage because the cost of doing so is minuscule in comparison to what you will save on interest payments.


  • http://www.fha.com/fha_credit_requirements
  • http://www.myfico.com/crediteducation/calculators/loanrates.aspx
  • http://www.investopedia.com/articles/mortgages-real-estate/10/should-you-use-seller-financing.asp

A Healthy Credit Score in Your 20s and 30s Is Possible if You Follow These Tips

By | Credit Scores

Managing finances can be tricky, especially when you’re young. For many people, getting started with financial planning is made more complicated by the plethora of information out there. That’s why it’s a good idea to have an easy-to-follow set of fundamental principles that provide a good foundation for financial health. Whether you’re trying to maintain an exemplary credit score, planning for retirement, or determining how best to repair your credit, these “money musts” can help you get started.

3 “Money Musts” to Jump-Start Your Finances in Your 20s

1. Break the cycle of credit card debt. It’s tempting to hold off on repaying debt until you’re older and bringing in a bigger paycheck. But the fact is, as your salary increases, so do your expenses. Along with that extra money comes a natural progression of increasingly costly expenses: buying a house instead of renting, having a family, or combining finances with a partner. That makes tackling debt early and often a good idea as long as you’re avoiding making big repayments you can’t afford. Budget out a realistic plan and stick to it.

2. Build up those emergency savings. The best way to do this? Set up a direct-deposit from your paycheck into a high-yield savings account. That’ll keep you from spending that money before you get a chance to save it. Stay realistic: Start off by saving one month’s salary. Then build to three months’ worth of pay in your emergency fund. Work your way up from there until you hit the emergency savings sweet spot: six times your monthly take-home pay.

3. It’s never too early to start saving for retirement. As far away as retirement might seem, it’s vital to start putting some of your extra cash into your 401(k). Thanks to compound returns, even small amounts can make a big impact. Once again, it’s important to start slow. Put away a reasonable portion of your paycheck and increase it by 1% every six months until you reach the maximum allowed. If your company participates in an employer match, take full advantage. Not doing so is leaving free money on the table.

3 “Money Musts” To Jump-Start Your Finances in Your 30s

1. You’ve hacked away at that debt? Great. Keep at it. Once you move into your 30s, it’s all about strategically taking down your remaining debts. Focus on the credit card with the highest interest rate and pay the minimum on the others. You might be close to paying off your student loans in your 30s, but if you’re paying higher interest rates (6 percent and up) on other debt, pay off those loans first as soon as you’re financially secure. If your student loan interest rates are low, you can even feel free to concentrate on other financial goals while continuing to pay off the low-interest loans.

2. Don’t forget about the kids. By now, your money management needs might include planning for others besides yourself. This could come in the form of child care costs and college savings for your children. To lessen some of the financial strain of tuition costs and college fees, consider opening a 529 plan. Just make sure you choose wisely—529s sold by investment advisers tend to carry higher fees than the ones made available directly from the state.

3. Take stock of big life events and reassess your insurance needs. View the big milestones in your life as the perfect time to take a second look at whether your insurance needs are being met. For example, securing life insurance may become a priority if there are people in your life who depend on you for financial security.

Following these tips should put you on the path to solid money management. Another huge part of financial health is the state of your credit score. That’s where a credit repair agency like Ovation can really make a difference. Give us a call today so that we can connect you with one of our credit experts for a free consultation.

6 Ways to Keep Your Job Search Away From Your Credit Score

By | Credit Repair, Credit Scores

“Job hunting is cheap and easy,” said no one, ever.

There are many resources to consider as you search for the perfect job; however, some of these resources may cost a pretty penny. Applying for another line of credit to pay for these expenses, however, is not the answer, since that course of action may affect your credit score.

To avoid fluctuation of your credit score or a need for credit repair down the road, here are six ways you can search for a new job with minimal costs:

1: Be your own headhunter

The Internet provides many resources that can help you find a job. You can browse through employment websites and download job-hunting apps to your smartphone.

Most of these employment services are free; however, if you are looking for a high-level position, you may want to consider a headhunter. Do your research first so you get results for the money you are spending.

2: Consider a career coach

Career coaches can help you determine your career goals, and they can help you establish your career path. Their services do involve a fee, though, so research your options and find someone credible. You may even consider bartering your services for free career advice.

3: Look good, spend less

Always be sure you look professional at an interview. That said, putting together the right outfit doesn’t need to cost a fortune. Hiring managers will be much more concerned with your experience and personality than your designer suit or shoes. If you really want to buy a new outfit, however, consider shopping at a local second-hand store for business attire.

4: Keep those receipts

Keep track of all your finances while you are searching for a new job. Expenses such as resume preparation costs and headhunter or career coach fees may be tax deductible. These costs are deductible as long as you are searching for a job within your current occupation.            Remember, too, that only the total amount exceeding 2% of your adjusted gross income can be deducted.

5: Use your community resources

Take advantage of the career resources in your community while you are searching for a new job. Employment centers and public libraries may offer workshops for job hunters as well as classes to brush up on computing skills. Additional resources may include clinics for helping with interviews and resume writing.

6: Network online and offline

Networking is one of the best ways to find work. It’s important to introduce yourself and get your name out there. You can find local networking events by visiting the Meetup website or by joining a professional association in your field.

LinkedIn is also a powerful online networking tool. Be sure to use a professional photo (no selfies!) and proofread your profile for accuracy. Moreover, write a summary to tell your profile viewers who you are and what your goals are. You never know who could be looking at you.

The best job resource

It’s you! Sure, searching for a new job can be time-consuming, and the fast and easy way may be to pay someone else to do the work for you. But this is not a solution for everyone, and you shouldn’t risk your credit score to find the best headhunter. There are many free and low-cost resources that can help you find a job just as well.

On the other hand, if you ever need assistance with credit repair, consulting with professionals could do you a world of good. Consider calling the credit experts at Ovation Credit if you think you’re in need of some help. We’ll be happy to set you up with a free consultation to discuss your financial situation.

Call Now for a FREE Credit Consultation