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Unpaid Credit Cards – You Can Still Repair Your Credit

By | Credit Cards

Statistics show that many Americans have bad credit, and one element that is a common factor is unpaid credit cards and how they affect your credit.

According to the statistics, VantageScore says there are about 220 million scorable people and 68 million of them have bad or poor scores (lower than 601), which is how they got to that 30 percent estimate. Figures from credit bureau TransUnion also say that 30 percent have subprime credit based on the VantageScore 3.0 model.

The good news is that you can fix it, but how do you repair credit when you have unpaid credit cards that, and possibly some in collections?

The First Step

Wondering how to fix your credit or how to improve your credit score? First thing is to find out your credit score and exactly what is on your credit report. Sometimes, there are items that should have been removed yet remain long after. These items are affecting your score and ability to do things like buying a home, buying a car, getting insurance, getting security deposits on utilities or, even worse, getting certain jobs.

If you have unpaid credit cards, they are often sent to third-party collection agencies that will try to collect the debt. One of the first things they do is list it on your credit report, which hurts your overall credit score. These debt collections remain active for seven years unless you take care of the charge, dispute it, or have it erased.

Disputing a Debt Collection

It is best to dispute a debt collection as soon as possible, generally within 30 days of when you were first contacted by the agency. This time frame is important because it allows you to request that the collection agency provide proof that you owe the debt. If they ignore your request or cannot prove the debt, then it has to be taken off of your credit report. If the debt does not belong to you in the first place, it has to be removed if they cannot prove it is yours.

Seven Year Dispute

After seven years, past due accounts have to be removed according to the Fair Credit Reporting Act. Keep in mind that some agencies do what is known as re-aging the account, which keeps the debt collection on your account longer and makes it look like the debt is more recent than it really is. If seven years have passed and the debt is still remaining, you can then dispute it and any backup information you have about the age of the account is helpful. The date of the collection starts from the moment you first went delinquent.

Deletion by Payment

How to dispute a credit report when it comes to deletion by payment is fairly easy. The one thing that debt collectors want is their payment. In some cases, the debt collector may agree to delete the debt collection from the credit report if you work out a deal to pay some or all of what you owe on your unpaid credit cards.

There are a few caveats to this deal. Make sure that if you are able to work out this type of agreement, do not rely on an oral agreement over the phone. You must get the agreement in writing so that the collection agency has to abide by what they agreed to do.

Any written correspondence should be sent by certified mail with a return receipt and if the collection agency does not follow through with their promise to delete the entry, you can then dispute it with the Credit Bureau by providing proof of what you were promised. Paying off the debt in collection alone will NOT improve your credit score.

Active Credit Cards

Strategic payments and credit line increases help with what is called your utilization rate. This is the percentage of credit limit you use and agencies that score credit look at this rate to determine your credit score. A good number to be at in your utilization rate is no higher than 30 percent.

If you have credit cards that are active and not in collections, there are ways to improve your score using these methods. This is done by having a lower utilization rate, where you are spending a lower portion of credit than what you have.

If your payments are on time and you have good standing with a credit card company, one way to improve your credit is to ask for a credit line increase without using it. It won’t be helpful to raise your score if you use up the credit line increase as soon as you get it.

For strategic payments, send in early payments and make fewer purchases to see results. Keep in mind that it is best to do this with all credit card accounts, not just the one you owe the most to.

For instance, you have three credit cards – $500, $300 and one with just $100 owed – do not just choose the largest to send extra payments. Instead, if you have planned on paying $100 extra, break that into three payments that you send to each debt equally. So, if your payments are $40 a month on all three, instead of paying $140 to the first card and $40 to the other two, pay $70 to all three to see faster results.

There are plenty of ways to help repair your credit even when you have unpaid credit cards. These are a few of the best that will help you on your way to a higher score.

Sources:

http://www.foxbusiness.com/features/2016/02/15/how-many-americans-have-bad-credit.html

https://www.thebalance.com/remove-debt-collections-from-your-credit-report-960376

https://www.credit.com/credit-repair/how-to-fix-your-credit/

https://www.consumer.ftc.gov/articles/pdf-0096-fair-credit-reporting-act.pdf

5 Factors That Impact Your Credit Score

By | Credit Scores

Like it or not, your credit score probably affects where you live, the car you drive, the smartphone you use, and how you take vacations, go to college and care for your family. Even with a moderate or lower income, it’s important to understand the factors affecting your credit score. With smart moves and strategic thinking, you can build a foundation for the future and enjoy the benefits of plentiful low-interest credit. Here are the five factors to remember every time you’re considering a loan, card or new account:

1. Number of Accounts

Every time you open an account that requires faith in your ability to pay on time — and this includes phone lines, utilities and student loans — you add a record to your credit history. Most financial advisors recommend limiting yourself to the average amount of three or four cards. The reason is simple: The more cards you have, the higher chance you’ll miss or forget due dates. Alternately, you should get at least one card if you don’t have one. This is because you can’t build credit without having any.

Obviously, you can’t control the number of accounts for life necessities like heat, electricity, internet and phone. You can, however, limit the number of student loans, car loans and mortgages. If you’re married, work it out so both you and your spouse hold accounts for things you share. One partner might pay the power bill, the other the internet. This practice also allows each partner to practice good financial management and build a healthy score.

2. Age of Accounts

A long time ago, you took on a high-interest or secured credit card as a way to improve your score. Should you close that account when a better card comes your way? Maybe, but probably not. The age of your accounts is another factor that affects credit rating, so an old account is a plus instead of minus. Just make sure you have a low balance, no more than five percent of the limit, and pay on time to avoid fees. Be aware that closed accounts will drop off your record after a certain period of time — usually seven years. Keep track of open accounts by looking at your credit report frequently.

3. Number of Inquiries

Although it can be frustrating and seem unfair, your score is affected when lenders considering your request for a mortgage, business loan or credit card request your credit report. Sometimes, your credit history is also accessed by potential employers, agencies checking your background, or other instances in which your character may come into question. Keep the number of inquiries in check by planning ahead. Be strategic about major purchases, like a car, that will cause numerous checks on your credit as you search for the best financing. By limiting the number of inquiries in the months before the purchase, you’ll suffer less damage when lenders look at your record.

4. Outstanding Debt

Imagine that every cent of your credit is poured into a single, large bucket. This bucket, the total amount of credit assigned to you, is marked with three gauges — green at the top, yellow in the middle and red near the bottom. The point where the contents of the bucket settle represents your debt-to-credit ratio, one of the most important factors of a credit score. As a rule, your credit card balance shouldn’t be higher than one-third of your total allowed credit. Why? Consider how your high balances look from the viewpoint of lenders — if you have a crisis or emergency and no means to pay with your credit, the chance of late payment or bankruptcy increases.

5. Payment History

When you pay and how much is another important factor of total credit score. Establish the good habit of paying more than the minimum amount due to offset any interest charged to the account. When possible, pay all but five percent of the outstanding balance due. Leaving a small amount due in each account shows the account is active and confirms your commitment to the lender, but don’t forget it’s there, forget to pay and be charged a late fee.

If you have a record of late payments, it’s possible to recover. Pay a few payments on time and then call the lender and ask them to remove the negative mark. They might not agree, but you’ll never know unless you ask. The same goes for accounts in collections — once you are in the position to pay off the debt, call to negotiate with the agency or lender. Many times, they will reduce the total amount due if you agree to pay the amount due and close the account. Also note that you should speak carefully and cautiously when talking to debt collectors on the phone. Review your rights with a credit counselor first.

By setting goals, paying on time and making a sincere effort to raise your score, you can earn the good things in life. Low-interest credit opens doors to opportunities like self-employment, travel and education. Now that you know more about how credit scores are calculated, it’s time to get yours in shape for a better and brighter future.

Sources

TransUnion.com: “What is a credit score?” https://www.transunion.com/credit-score

Credit Karma.com: “How many credit cards does the average American have?” https://www.creditkarma.com/credit-cards/i/how-many-credit-cards-does-the-average-american-have/

TransUnion.com: “How closing accounts affects my credit score”: “https://www.transunion.com/article/closing-accounts-and-your-credit-score”

Credit Changes After Co-Signing a Loan

By | Loan

Co-signing on a loan is a big decision. You are putting your name on something that is not even for yourself. It requires trusting the other party to be as responsible a borrower as you are. This can be disastrous, but sometimes it works out okay.

Co-Signing Loan

Regardless, there are implications to your credit profile. Your score could drop, and you could even be left on the hook for the balance. If the other applicant fails to repay and the debt goes to collections, it can really hurt you.

Here’s typically what happens when you co-sign.

Applying Results in a Hard Inquiry

Your credit score has an initial drop from the hard inquiry. This occurs when your credit file gets pulled by the lender to see if your creditworthiness can secure the loan. Typically, your score will drop anywhere from 5 to 25 points after one or more hard inquiries in a specific time frame.

This factor is pretty negligible. Your credit score will lift back up soon after, as long as the loan gets repaid on time. Hard inquiries also only stay on your report for two years and usually impact your credit score for no more than one year.

Your Credit Report Gets a New Account

Assuming that the co-signed loan is approved, there’s now a new account showing on your credit report. How it appears will depend on the specific loan. But, in most cases, it will be an installment debt. This means the borrower must pay a fixed amount across so many intervals of time.

This type of debt will post as the full balance until it’s paid entirely. If it is a one-time need, the goal should be to cover the debt right away. The longer you carry the co-signed loan on your report, the more your score gets calculated with higher debt balances.

As with any debt, the credit reporting agency will notify the bureau every so often. Any payments made on time, or late, will get marked both on the credit report of the co-signer and the borrower. This late payment can impact the credit score of both parties. If it is your first late payment, it could mean 100 points or more lost.

Credit Utilization Ratio — How Does It Change?

Thankfully, co-signing on a loan is not the same as helping someone get a credit card. These installment debts will not play a role in your credit card utilization rate. This means that the second-biggest factor of your credit score will not be harmed. Since 30 percent of your FICO score depends on your credit utilization stance, this is a very good thing to realize.

However, while it doesn’t hurt your utilization rate, it almost does in the perspective of a new lender. Assume you try to qualify for a mortgage: Suddenly, the total debt you carry is higher. If you qualified for a $160,000 home loan prior to co-signing a $15,000 line of credit, now, until it gets paid, you might only be approved for $145,000.

Worst Case Scenario — Credit Score Damage From Co-Signing

By being eligible to co-sign, chances are you take your creditworthiness seriously. The amount you help someone borrow might be negligible versus what you can already borrow yourself. If so, the worst case scenario is that you have to pay the debt yourself — including any interest and penalties.

However, the damage is more crippling if you are unaware of payments in arrears. It is imperative to communicate with the borrower. You need to know if there will be a late payment — so you can prevent it from happening in the first place. As mentioned earlier, your scores could drop 30 to 100 points or more after just one 30-day late entry on your credit report.

Thankfully, there’s a bit of power for the co-signer. You have the right to request monthly statements. This is the simplest way to ensure payments are always made on time, and if a missed payment occurs, you can act on it quickly.

Your credit score will already have enough downward pressure. Just look below at how your co-signed loan can weigh in on some of the main credit rating factors:

  • Payment history: 35% of your FICO score depends on your payment history. Any late payments can be severely damaging to your score. A single missed payment could drop your score enough to cost you tens of thousands, especially if you plan to refinance your home soon. Your next loan will get approved with a lesser score, subjecting you to worse interest rates than normal.
  • Credit age: 15% of your score is made up of the length of your credit history. This new account is fresh and will influence a lower average age for your open accounts. It will close at some point and no longer be a factor. Regardless, while the account is open, it will only reduce the average credit age of a co-signer.
  • New credit: 10% of your score is also fundamentally backed by your new credit. FICO looks at whether you can really afford any new debt you take on. There might be large loans in your name already, and your credit score qualifies you as a co-signer. Yet, you might not be seen as someone able to afford more debt right now. Even though it is not technically yours, it is for this part of your score calculation — which is risky.

Conclusion

Co-signing a loan might not hurt your credit profile as much as you think. It’s more of a concern if you plan to finance a big purchase in the near future. But, absolutely never co-sign unless you trust the other borrower. Also, make sure to have funds available elsewhere in case you suddenly need to pay the loan off to save your credit.

Sources:

https://www.credit.com/credit-reports/what-is-a-hard-inquiry/

http://budgeting.thenest.com/late-payment-affect-cosigner-24854.html

https://www.thebalance.com/how-will-a-late-payment-hurt-my-credit-score-960543

http://www.creditcards.com/credit-card-news/help/5-parts-components-fico-credit-score-6000.php

http://www.moneycrashers.com/cosigning-loan-reasons-risks/

Start Living a Better Credit Life

By | Your Credit

Better Credit Life

We all struggle with the stress that money creates. Take it from Antoine Walker, a former Miami Heat star that ‘went from $108 million to bankrupt‘ in less than a decade. This serves as a reminder: it’s not how much you make, but how you use it.

If you have a stable job, it is possible to live a Better Credit Life as long as you put the time and organization into your financial planning. Ready to get started? Here are 10 ways for you to start living a Better Credit Life:

1. Plan for Disaster from Day One

If you anticipate a financial crisis, then there will never be one. So planning for the near and mid future will keep you safe in the long run. And you have no excuse; just join the millions of Americans that already use budgeting and personal finance tools. Having a budget and sticking to it, is a sure way to stay on track to a Better Credit Life.

Simply download Mint, YNAB, or another highly-rated app, and finally take charge of your financial freedom today!

2. Watch for Credit Report Errors

It’s surprising how often errors end up on credit reports. Stats suggest this impacts 1 in 20 consumers, which is five-percent of Americans. While some errors are more damaging than others to your credit score, as many as 1 in 250 consumers are behind more than 100 points from errors.

You can request a free copy of your credit file from AnnualCreditReport.com once a year from each credit bureau. Further, with our services you’ll find out if there are any errors right away – as we provide a copy of your Equifax and TransUnion files.

3. Examine All Your “Fees”

Most Americans have no idea how much goes to waste on preventable fees. It’s said that hundreds of dollars are spent every year on unknown costs. According to the Ponemon Institute, an average of $942 is spent on hidden fees each year.

Online banking has made a difference, but there are new ways to lose money without realizing in the digital age. Get digging and see where you’re losing!

4. Negotiate What You Pay

Many things are made cheaper so compare costs and cut deals where you can. As you look for high fees, this might open you to ideas like switching bank accounts and utility providers.

Don’t ever be scared to negotiate – for instance, most cable, phone and Internet providers have a user retention line. Most that inquire end up getting a moderate to large discount on their services.

Heck, even some “extreme couponing” could make a big difference!

5. Consolidate Your Large Debts

Your total amount owing is the second biggest variable of your FICO score. So it only makes sense to limit your overall debt.

FICO’s algorithm weighs revolving debt higher than installment debt. This means temporary loans set with payment installments (like a student loan) will drag your score down less.

Therefore, by obtaining a consolidation loan for your credit cards (which are revolving debts), you can eliminate the biggest credit hindrance of all.

6. Build a Relationship at a Credit Union

You stand a better chance getting a home loan with moderate credit at a credit union than a traditional bank. This is especially true if you get familiar with the staff at your local credit union. Further, you will find many rates are better, insufficient funds fees are easier to waive and other perks.

7. Don’t Become a Data Breach Victim

Your information on the web is never safe. Make sure to audit your Internet safety from time to time. The single most effective way of doing this is by checking whether your email was hacked. If your data was leaked on the web, you will be able to find out through HaveIBeenPwned.com’s search tool. Further, you can set up email alerts to inform you if a data breach occurs.

8. Plan for Christmas in January

You should look at your past year of finances and what you expect to make and spend for the following year all at once. Do this after Christmas is over and prepare your budget for the next winter holidays. If you don’t want to buy the items right away in case it’s not appealing later, stash the money in gift cards or make a savings account for this purpose.

9. Shop Online for the Best Cards and Loans

Whether you need a consolidation loan, a travel rewards card or even an auto loan, you should compare the best rates online. Sites like BankRate.com make it easy to see which cards and lenders provide what you need.

10. Honor Your Debts

Everyone wants to disavow their debts, but no one wants to go bankrupt. The key is to forget how owing money can damage your life. Since 15% of your FICO score is based on your credit length – it’s better to keep your lines open. So when you pay off a card, don’t close the account!

Even taking on a higher credit limit is good – it improves your credit utilization rate, so long as you don’t waste the new funds.

Conclusion

Never give up on the idea of living a Better Credit Life, because it’s available to you with a little discipline. Even if you need credit repair help or require consolidation loans to make it happen–as the saying goes, “Where there’s a will, there’s a way…”

Sources:

http://money.cnn.com/2015/07/24/investing/antoine-walker-nba-bankruptcy/

https://www.ftc.gov/news-events/press-releases/2013/02/ftc-study-five-percent-consumers-had-errors-their-credit-reports

http://www.forbes.com/sites/adamtanner/2014/04/14/these-sites-tell-which-of-your-accounts-have-been-hacked/

http://fraud.laws.com/false-adversiting/surcharges-and-hidden-fees

How to Improve Your Credit Score

By | Credit Scores

Improve Your Credit Score

If your credit score is not great or even good, don’t despair. You have the power to change it. It might take months or possibly years to get close to the coveted 850 credit score, but it can be done. You can get started by taking these tips into account.

Check Your Credit Report

The most effective way to improve your credit score is to keep a close eye on it. Start by ordering your free credit report from AnnualCreditReport.com — everyone gets one free report every year. It won’t tell you your score unless you pay a fee, but it will let you instantly see all the accounts that add up to your credit rating.

Your first goal should be to make sure your report is accurate, starting with your contact information, birth date and social security number. Then look at the accounts on your report. They should all look familiar. If you see any accounts that you did not open, you should follow the steps on the site to get the errors fixed. Similarly, if you see late payments reported that you know you made on time or you see derogatory marks that don’t belong there, you can contact the creditor. If the creditor does not fix the error, you can dispute it.

Establish Credit by Using a Credit Card Responsibly

If your credit report is pretty bare, it may be time to get a credit card. You might wonder how that will improve your credit score since most people are advised to avoid credit cards. But the fact is that you need to show the credit bureaus that you can handle credit well. This is hard if you don’t have any accounts to handle yet.

This doesn’t mean you should go out and apply for a car loan or mortgage to improve your credit score. You won’t have much of a shot at these types of loans if you don’t have any credit to your name. Instead, start by getting a credit card. Your best bet is to apply for a secured credit card. With this type of card, you pay either a portion or the total amount of your credit limit upfront and then use the card. Since you pay the creditors ahead of time for this type of card, you know you’ll likely be approved, even without any credit history. Then you can work on building your credit by making your payments on time.

If you already have some credit, but what you have is poor, you may be able to get an unsecured credit card to improve your credit score. The only catch is that you might have to apply for a credit card for people with bad credit, which may have a high interest rate. But the good news is that once you get one, use it regularly and make your payments on time, you will improve your credit score so you can eventually apply for credit cards for people with good credit.

Pay Your Bills on Time

If the main issue with your credit report is that you have a lot of late payments that were reported to the credit bureaus, you can turn it around by making sure you never miss a payment again. Even if you can only make the minimum payment some months, it’s crucial that you pay on time. Otherwise, you will likely be facing fees and a lower credit score after it gets reported to the bureaus. And if it’s a credit card payment you missed, you might also end up with a higher interest rate.

This is why many people with good credit automate their payments so they always get paid on or before the due date. If you are ever having trouble paying a bill, your first step should be to contact your creditor to see if you can make arrangements to pay late without it affecting your credit score. And keep in mind that the longer you pay all your bills on time, the less your score will be affected by any late payments you made months or years ago, which means it’s never too late to get into this habit.

Pay Down Debt

One of the best ways to improve your credit score is to keep your credit utilization down. More specifically, you should strive to keep your credit card balances at less than 30 percent, meaning you have at least 70 percent available. If you’re a little above that, just keep paying down your balances.

You can also get faster results by requesting a credit limit increase, which will automatically reduce your credit utilization. Just be sure you don’t spend more once you get an increase! And if your credit utilization is already around 30 percent or less, keep paying it down, since many people with the best credit scores boast credit utilization of 10 percent or less.

Get Help from Credit Experts

If you’re feeling overwhelmed as you work to improve your credit score, you can come to us for help getting started. We’ll give you a free credit consultation so you can see what you need to improve on your credit report. We’ll also help you dispute inaccuracies on your report and monitor your credit so you know about any changes to your credit right away. Contact us today if you’re interested in getting help improving your credit score.

Sources:

http://www.bankrate.com/finance/debt/7-simple-ways-improve-credit-score-1.aspx

http://www.myfico.com/credit-education/improve-your-credit-score/

http://www.experian.com/blogs/ask-experian/credit-education/score-basics/improve-credit-score/

7 Must-Do’s Before Shopping for a Mortgage

By | Mortgage

Mortgage-Ovation-Credit

Owning your own house is a hallmark of independence as well as a major investment. It is one of the most exciting milestones in your life. However, shopping for a mortgage is decidedly less invigorating. You have your credit score to think about and whether you even qualify. It can be a lot of work, so start early. Take care of the following before you start shopping for a mortgage.

1. Your Credit Score

The first step is your credit score. How high or low it is will have a big effect on the mortgage you receive. In general, a higher number translates into lower payments. According to the Seattle Times, getting a mortgage when your credit score is less than 660 (or for some lenders, less than 680) means that you are going to need to put more money down and you could have to pay additional fees. In general, to get the best rate, you will need a credit score of more than 750.

2. Qualifying for Credit

Further, you may need a minimum credit score to even qualify for a home loan. “While there are many qualified borrowers in the 580 range, the market today is probably (looking for) 640 to 660, at a minimum,” says former U.S. Department of Housing and Urban Development official Vicki Bott. In other words, it doesn’t matter how much money you make, how little you owe or how much you can put down — you could still be denied a mortgage.

3. Deciding on a Mortgage Budget

Would-be homeowners should also decide on a budget. Any loan from the Federal Housing Administration will require that your mortgage payment not exceed 31 percent of your income except under specific circumstances — and even that could be on the high side. The Credit Union National Association advises that your mortgage payment not be more than 28 percent of your gross pay, and Dave Ramsey suggests a maximum of 25 percent of your take-home pay. Being more conservative with your budget means that you have extra cash available for the type of expenses homeowners have to endure, such as a new roof or maintaining your furnace.

4. Pay Off Debt

One top suggestion is to pay off any debts you have before you begin the mortgage application process. Credit card debt can be a real hindrance to getting approved, but other debts play a role as well. Car loans, medical bills and student loans can eat away at your monthly cash flow. Aside from impacting your credit score, it may also play into the amount that the bank is willing to approve and the amount of payment you can comfortably make each month. You will need to keep debt payments in mind as you decide on a budget. Making a plan to pay them off before applying for a mortgage means one less thing to think about.

5. Save Money

Remember that buying a home requires certain upfront costs. You will need to cover closing costs as well as a down payment. Many conventional loans are going to require 20 percent down. Even if you have enough in your bank account to cover that lump sum payment, will you have enough left over to weather a storm if a worst-case scenario happens and you lose your job or the home requires extensive work before you have time to rebuild your savings? These are important issues to consider.

6. Credit Report Review

Before you attempt to purchase a home, you should also have someone review your credit report. This way, you can identify any potential issues BEFORE you begin applying for loans. At Ovation Credit Services, we review your report to see if there’s anything affecting your score before you start the mortgage process and can advise you on the next steps to take to improve your odds of getting the best home loan rates and terms possible.



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7. Credit Repair Is Possible

If your credit report needs some work or you aren’t happy with the interest rates and terms your credit score will garner you, remember that credit repair is possible. Working with an established company like Ovation helps ensure that you aren’t penalized for debts that have already been paid or settled. We can also help you identify areas you could target to improve your credit score.

It’s tough to take a hard look at whether you can actually afford to buy a house and what your price range really gets you. Having an outside party take a look at your credit report gives you a more objective perspective into what lenders like to see and the factors that play into your credit score as well as the impact your credit score has on the terms and interest rate you receive for your mortgage.

Sources:

HGTV: What to Know Before Buying Your First Home
http://www.hgtv.com/design/real-estate/what-to-know-before-buying-your-first-home

Dave Ramsey: 5 Must-Dos Before You Buy a Home
https://www.daveramsey.com/blog/5-must-dos-before-buy-home

Seattle Times: 6 Must-Dos Before Buying a Home
http://www.seattletimes.com/business/6-must-dos-before-buying-a-home/

U.S. News & World Report: 7 Things to Always Do Before Buying a Home
http://money.usnews.com/money/blogs/my-money/2014/06/25/7-things-to-always-do-before-buying-a-home

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.

 

Characteristics of Debt Free People

By | Debt

debt-free-peopleAre you inspired to be debt-free? Whether you’re close or far from your goal, it’s important to think about and plan the steps you need to take to get there. A good way to get you started is to look at people who are already living debt-free lives. Here are a few common characteristics that you can emulate in order to live within your means, grow your savings, and pay off your debt.

Detail-oriented. Those living with no debt are constantly monitoring their monthly statements to check for fees and charges they don’t recognize. The debt-free are less likely to waste money by forgetting due dates or overdraft fees.

Think long-term. Those living debt-free often think about their long-term financial goals rather than pursuing instant gratification. If you don’t make quick decisions, it gives you a greater amount of time to really determine if you actually need a purchase.

Not afraid to ask questions. Debt-free people aren’t afraid to ask for lower interest rates or forgiveness on a late payment. They take control of their finances.

Save. Save. Save. You should always pay yourself first; debt-free people understand this concept intimately.  Saving should be a habit you well establish. Even if it isn’t a huge amount, every little bit saved helps if you need the funds for a rainy day.

Say no. It’s tempting to always say yes to friends for dinner and drinks, even if it’s only once in a while. But saying no on occasion can turn those small expenditures into big savings. Debt free people understand this. Instead of paying to go out, look for free festivals or host a potluck.

Set goals. Setting goals helps you understand what you are saving for and how you’re doing along the way. Debt-free people understand that having attainable goals leads to future financial success.

Cash has value.  It’s easy to overspend if you never actually see your money. Debt-free people pay with cash rather than plastic as often as possible. You should do the same. Try using just cash for one week to better understand what it feels like to actually pay for things at the time you get them.

Becoming debt free is possible with time, especially if you follow the lessons here from debt free people. You might also consider credit repair options to get you on the right track sooner. Let Ovation Credit Services help you. We offer a wide range of credit repair solutions, customized to meet your unique needs.

Contact us today to see how we can help.

Joining Debt for New Couples

By | Credit Repair, Debt

You’ve met the love of your life; that special someone who makes your heart beat a little faster at just a passing glance.  Whether you are just sharing the joy of merging furniture or taking the big plunge and saying, “I do”, be sure you come down from cloud nine long enough to look far into the future and plan for reality. Financial reality.

After you settle into domestic bliss, and many nights of burned dinners, there will be monthly bills in your mailbox (or inbox).  This is the reality for which you need to prepare.  Any relationship counselor will tell you that the single issue couples fight about the most is finances.  In fact, a 2012 study published in Family Relations showed that couples who fight regularly about finances are 30 percent more likely to divorce.  Help build a better foundation by planning ahead and sorting out a plan to get debt-free (or stay debt-free) together.  Here are a few pointers to help get you started:

  1. Let’s talk. Have an open and honest conversation about what debts you both bring to the relationship.  While this can be very uncomfortable, it’s crucial you understand each other’s financial situation and plan a budget.  This will have to include a plan for paying off debt and saving money.  Understand where you are now before trying to plan your future.
  2. Understand your rights. If you get married, you are not responsible for any debts that were incurred before marriage.  After marriage, the story changes; especially in community property states where you could be held liable for 50 percent of the balance.  States recognizing common law marriage also complicate the issue.There are different situations for co-habitating couples, wherein you may be held responsible for your partner’s debt.  For example, if you co-signed a loan, you may be accountable for the remaining balance unpaid by your partner.  Consider it wise to know your rights before signing any loan documents.
  1. Expect the best, prepare for the worst. No one begins a relationship thinking of Franklin Coveys’ famous quote, “Begin with the end in mind.”  We all expect it to last forever.  But it is always best to plan for “what if.”  Have a joint bank account for household expenses and joint debt.  But also keep separate accounts for personal debt that was incurred before the relationship began.  In this way, there isn’t any co-mingling of names to make a messy ending.
  2. First comes love, then comes marriage, then comes…the debt payoff. While you are wisely planning your future, include debt payoff.  Certain things must come first.  The amount of debt you carry can affect your ability to obtain an auto loan and even a mortgage.  Paying for your children’s college can push you over the debt cliff if not managed well from early on.
  3. Lower what you’re paying on your debts. That doesn’t sound quite right, does it?  It seems as though you would want to make bigger payments to pay down debt.  But consolidating loans, refinancing, doing balance transfers to credit cards with lower interest, etc., you can help lower your debt and your payments.  Read the fine print first.  Some of these strategies can cost you more in the long run.  For example, a refinance may cost you more in fees than keeping your original loan.
  4. Don’t go it alone. Make paying off your debt a team success.  Don’t allow your finances to take over the relationship.  You and your partner can conquer your debt together.  It won’t always be easy and whether you or your partner is the one who brought the debt, it takes some patience, kindness, and support.  But together, the two of you can be finance warriors.

Learning to develop and balance a budget may be challenging at first.  Getting a grasp on your debt alone is sometimes frustrating and bringing a partner’s debt into that situation may prove to be overwhelming.  That may be just the time to contact a credit repair specialist, such as Ovation Credit, to help you understand how to get your finances under control before they take control of you.

 

Be Debt-Free and Stress-Free with 5 Simple Steps to Credit Repair

By | Credit Repair

If your New Year’s resolution is to be debt-free in 2014, you are not alone. According to the Federal Reserve Bank of New York, consumer debt rose by 1.1% during the third quarter of 2013. That may not sound like a lot, but it comes to more than $11 trillion dollars, the highest increase for household debt that the country has seen in more than five years. Fortunately, you can take strategic strides to dig yourself out of debt and begin credit repair by following five simple and smart steps.

  1. Face the Facts
    The best way to create an effective payoff strategy is to examine your total debt. Locate the areas where you’ve spent the most in the past year and make a concerted effort to reduce new spending (even by as little as 10%) in those areas. Then, apply the money you would have otherwise spent on past debt.  It’s also helpful to focus on your budget to determine what regular payments you can make on credit cards without overextending your financial resources
  2. Notes of Interest
    It makes financial sense to pay off your most expensive debt first. Typically, this will be your credit cards with the highest interest rates. To reduce both your debt and the time in which it takes to pay it off, give more than the minimum fee. Try to double your payments on your high interest cards, while making the minimum payment on cards with lower interest rates. Speaking of interest rates, there are ways in which you can have your rate lowered. Often times, a bank will reduce your interest rate if you consolidate the debt on several of your other cards to one. But make sure you’re getting a good deal before you move your balance.
  3. Bye the Buy
    Your plan is to pay off debt, not purchase new or unnecessary items that you cannot afford. To avoid the temptation to contribute to your existing debt, take your credit cards out of your wallet and put them in a spot that is only accessed for emergencies. Remember, it is okay to earmark a few dollars to spend once you’ve reached your debt-reducing goal. This will serve as both a motivator and reward for sticking to your payoff plan.
  4. More Money = Less Debt
    Apply any expected bonuses from work and any unexpected windfalls (such as money from inheritances) directly to the principal of your debt. Since these funds aren’t part of your regular budget, they weren’t allocated for your everyday expenses so you won’t feel like you’re missing anything to be without them.

  5. Ask an Expert
    Financial issues can be overwhelming so it helps to seek assistance from industry leaders such as Ovation. Our knowledgeable representatives will work with you to build a credit repair and credit re-establishment plan that is tailored solely for your situation. Your path to debt-free, stress-free credit repair begins with a phone call for a free consultation.

 

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