How to improve Credit Score:

The Definitive Guide



This is a complete guide about how to improve credit score in 2020.How to improve Credit Score

In this new Guide you’ll learn: 

  • Why a good credit score is one of the most important factors
  • What to do if you need a quick boost in your FICO score
  • How to protect yourself and your money
  • How to take control of your credit
  • Lots more
  • Let’s get started.

Contents

credit Repair Secrets

Chapter 1

What is credit repair & How it works

Understand FICO score and it's ratings

Chapter 2

Understand your FICO score and it’s ratings

Whats a good credit score

Chapter 3

What’s a good credit score and credit rating

Why credit repair important

Chapter 4

Why a Good Credit Score is one of the most important factors

How to protect yourself and your credit

Chapter 5

How to protect yourself and Take control of your credit

How to boost credit score

Chapter 6

what to do if you need a quick boost in your FICO score

Chapter 1:

 How to improve credit score fast : Credit Repair Secrets




This absolutely necessary Credit Repair Secrets which helpcredit Repair Secrets to improve credit score you to improve your credit score fast. Credit fix hacks the banks don’t want you to know about.

In this Chapter you’ll learn: 

  • What is credit repair and How it works
  • Also get the overview of how credit repair company works
  • Let’s get started.

What is Credit Repair? 

In school, you were always told about things going on your permanent record. The only permanent record you have as an adult is your credit score. However, your credit score does follow you around everywhere you go.

It decides whether you can get a loan to buy a car or house. It impacts your interest rates and insurance premiums. A bad credit score forces you to pay expensive deposits for rent, utilities, and mobile phone service. It can even effect whether you get a job or promotion.

Bad credit is like a black cloud hanging over you everywhere you go. It’s overwhelming and fills many people with uncertainty. But you don’t need to passively accept bad credit. Stop holding yourself back with fear and doubts. Debt can be conquered.

It’s possible to buy the car or house of your dreams. Taking control of your financial situation is a breeze when you know how.

Credit repair is easier than it looks. A lot of companies claim to have credit repair secrets, but they won’t tell you what they are. That’s because at best, credit repair companies are charging a fee for things you can do yourself. At worst, they’re encouraging you to break the law. So it’s better to understand how to improve credit score and make it better.

I have no problem telling you credit secrets and hacks that I know work. Banks don’t like you knowing this information because they make money off bad credit loans with high fees and expensive collection actions. Credit cards for bad credit have much higher interest rates and will ultimately just make your situation worse.

Stop letting the banks bully you into overpaying today based on mistakes you made years ago. Credit repair is an achievable goal, and that’s what we’re going to talk about today.

Understand how to improve credit score and Take control of your credit by using this information the financial industry doesn’t want you to know about. They’re all legal, and we know they work based on how credit reports work.

This is how to truly improve your credit score.

Before going to start, you need a clear idea about how to do it.Improving the credit score have few simple steps that you need to follow.

Which leads us to chapter 2….

Chapter 2:

Understand FICO score and the three CRA’S


 

Improving the credit score have theseImprove FICO Score and it's Ratings

simple steps.

  • First understand each and every item on your credit report.
  • Second collect the free copy of your credit report
  • Then find any mistakes that hurt your credit score badly
  • Always pay your bill on time
  • Manage and use your credit responsibly
  • Lots more

Understand your FICO score 

Get a clear understanding of each and every item on your credit report. Understand your FICO score, it’s ratings and how the credit industry work. Avoid the common mistakes people make when attempting to rebuild their credit. In short, before you can change your credit rating, you need to understand what it is. That’s whats we are going talk about now.

First, what are the components of your FICO score anyway? Your credit score is based on a secret algorithm designed by FICO, originally Fair, Isaac, and Company. The details of this algorithm are still hidden under a veil of secrecy even today. Though we do know the formula is generally comprised of the following five components.

  • 35% Payment History
  • 30% Credit Utilization
  • 15% Length of Credit History
  • 10% Credit Inquiries
  • 10% Type of Credit Used

So, in a nutshell, the largest component of your score, Payment History, looks at missed or late payments. Credit Utilization subtracts your amount owed from your credit limit. Length of Credit History looks basically at the Average Age of Accounts (AAoA) and how long it’s been since they were used. Credit Inquiries or “Hard inquiries” happen when you authorize a creditor to check your score. Finally, by Type of Credit Used they mean Credit Mix. They like to see a variety of different types of credit account types, e.g., revolving, installment, open.

Why your credit score may very little bit for different reporting Agencies

There are really only three agencies that you need to concern yourself with when talking about your credit score. Feel free to skip ahead if you already know this.

To make the lending decision quick and properly more than 90% of business uses the FICO system to know the financial health of their customer. The biggest three credit reporting companies in the United States Market are Experian, TransUnion, and  Equifax.

Each credit reporting company set their own standard and business model because of this each of them makes their own changes to formulas according to their own rules. This change causes your credit score may very little bit for different reporting companies. However, there are a lot of things and financial habits that matter to your credit score.

The three Credit Reporting Agencies and How they performs

We may not tell you the exact details of how FICO credit score is calculated but FICO gives us information about what kind of information matters on its scoring algorithm.

Equifax, Experian, and TransUnion are the big three report agencies who keep tracks of your financial transaction and other information, including:

Credit card balances
History of balances of loan and credit cards
History of payments on loan and credit cards
Number and type of accounts you hold
Bankruptcy filings

All these agencies mainly collect and maintain your credit information and then resell it to the other businesses. The Experian credit score is a FICO 8 score which ranges between 300 and 850TransUnion score also ranges from 300 to 850. Like others, Equifax also provides FICO and Vantage Score and uses different scoring models which ranges between 300 and 850.

Now let’s talk about small things you can do that can potentially make big impacts in your score to change your life!

Chapter 3 :

What’s a good credit score 


In this chapter you will learn :

  • what’s a good credit score
  • Understand credit rating

What’s a good credit score?

Credit scores used by lenders to calculate the risk of lending money. It’s a tool to help creditors determine how likely you are to repay their loans. Most of the major credit agencies in the United States use the FICO score to evaluate your credit health. Your FICO score normally ranges between 300 and 850. So, what’s a good credit score? While each creditor may have their own calculation, generally the following breakdown applies.

  •  A FICO score under 630 is considered as Poor Credits
  • An average or Fair score is between 630 and 690
  • Good Score is between 690 and 720
  • An excellent score is anything above 720

You’d be surprised how many people contact me with no understanding of what their credit score is. One customer, we’ll call him Tom, was convinced he was being haunted by the ghosts of his past. He couldn’t figure out why people kept rejecting him. Tom tried burning sage around his house to purge the spirits, but what he really needed was sage advice.

Understand credit rating

Before you can change your credit rating, you need to understand what it is. Your FICO credit score, created by the Fair Isaac Corporation, is used by lenders, creditors, landlords, and even employers to assess your credit risk.

FICO scores range between 300 and 850. The criteria for a good credit depends on what you’re applying for. Although 650 isn’t necessarily bad credit, it won’t be enough for a high-end condo rental or mortgage. It also depends on where you live.

In cities like Boston, MA; San Francisco, CA; Seattle, WA; Minneapolis, MN; and Philadelphia, PA, the average credit score of renters is over 700. But in cities like Greenwood, MS; Albany, GA; Laredo, TX; or Riverside, CA, the average credit score is below 650.

Collect your free credit report

Get your free credit report and most important you need an itemized list of everything showing on the report. Then understand and analyze every item on your credit report carefully and take action accordingly.

All three agencies are required by federal law to provide you with a free annual credit report at your request once every 12 months. You also have 60 days to report a free copy if you’re denied credit, insurance, or employment based on bad credit. To order, visit annualcreditreport.com or call 1-877-322-8228.

Chapter 4 :

Why a Good Credit Score is one of the most important factors

Why Credt Repair Is Important

Your credit score is one of the most important factors landlords use when deciding whether to rent to tenants. Here’s a chart showing the cities with the highest credit scores in the country, so you know what you’re competing against.

Credit Score charts use to rent to tenants

Experian recently released a study showing credit scores for new and used car buyers. The average recipient of a new-car loan has a 713 credit score, while the used-car loan average was 656.

Approximately 20 percent of borrowers got a car loan with credit scores below 600 and 5 percent had credit scores below 500. While people with these low credit scores were able to secure a car loan, they paid a lot more for it. So it’s very important to understand your credit score before applying for any loan or mortgages.

Borrowers with good credit typically only must pay $1000 or 10 percent of the selling price for a down payment. With bad credit, this doubles to 20 percent or more, and that’s not all. Here’s a breakdown of how credit scores affect the interest rates for car loans.

credit scores affect the interest rates for car loans

As you can see, a credit score of 700 will get you an annual percentage rate (APR) of 4.16-5.68 percent. Meanwhile, a 600 credit score nearly triples that APR. I bet you didn’t realize your credit score was costing you so much.

Let’s say you get an auto loan for $10,000 for five years. With a 4.16 percent APR, you’ll pay a total of $11,204.22, assuming you’re never late with a payment. At 16.92 percent, you pay $15,034.61 by the end of your loan. Even with a higher down payment, you’ll end up with higher monthly payments and pay nearly 40 percent more by the end of your loan.

Mortgages have even higher credit requirements!

You need a credit score of at least 740 to qualify for the best loans with the lowest down payment requirements (20 percent) and interest rates. Many lenders will qualify you for a conventional mortgage at 700, and some will even finance you as low as 620, although this is easier with VA– or USDA-backed loans.

Once your credit score drops below 580, your best bet for a mortgage is the Federal Housing Administration (FHA), but you’ll need a down payment of 10 percent. That’s much better than the 20 percent or more needed on a conventional loan. Although with an FHA loan, you’ll need more PMI.

It will also affect mortgage interest rates. A FICO score of 700 can get you a 4.49 percent APR, whereas a 620 score comes with a 5.857 percent APR. Over the course of a 30-year mortgage, that’s a difference of $60,000 on a $200,000 home. Of course, mortgage rates are always changing. As of August 2018, the average APR is 4.57 percent.

Here’s a chart showing the difference your credit score makes.

So not only does a bad credit score require higher deposits and down payments, it increases monthly payments and total loan repayment amounts. That’s why it’s important to maintain a good credit score. Bad credit will come back to haunt you when you try to buy your dream home or a new car.

But what is your current credit score? That’s what we’ll discuss next, so you can banish the bad spirits.

Chapter 5 :

How to protect yourself and Take control of your credit

Know these few things that can hurt your credit score. Now we are going to tell you many things that actually help you to improve your credit score if you follow them.

A credit score can affect your life in two ways. If your FICO score is high then the possibility is you will get the approval of your loan or credit card easily with a much-reduced interest rate. Your lifestyle became so easy. You will get the freedom of credit and enjoy life as per your wish. However, there is another possibility of just the opposite of this if your credit score is not good. So it’s better to avoid things that hamper your credit score. Feel free to skip ahead if you already know this.

If your FICO score is low then the door to your happiness is close all around you and your world is only getting smaller every day. You will never get your dream house, even not in your lifetime. It also restricts you to access a product or services offered by the bank or other financial institutions.

How to protect yourself and your credit

Don’t take chance, these few mistakes that hurt your credit score badly. Avoiding these mistakes can put you way ahead of the game and may help you to improve credit score in the long run. You should aware of the following

  • Your FICO score factors
  • Effects of late payment on your score
  • How collection affect your score
  • Collections can be removed
  • When Charge off play the game
  • Hard inquiries may affect your Score
  • Pay your bill on time
  • Keep your “old” credit Cards
  • Pay off your high Interest and “New” Credit Accounts First

Your FICO score factors

Your FICO score can split into few major factors like payment history (35%), Debt Burden (30%), Length of History (15%), Types of Credit (10%), and Recent Credit Searches (10%). I will discuss how this factors are effect your credit score.

FICO Score Factor

The bulk of your credit score is made up of on-time payments and how much available credit you have. If you pay all your dues, credit accounts, loans on time each month then you are in a good position.

You can consider payment history as a record of all the things you did wrong related to your credit and how you behave to your debts. You did not get any boost to your credit score when you pay on time but you will get a negative mark if you not doing so. A negative history mark indicates that you have face difficulty in meeting the debt obligation or you have a risky attitude towards your credit. Both things give signals to the lender to take more cautious regarding financial activities in the future.

The length of your credit history contributes 15 percent of your FICO score. Normally it takes six months of payment history to establish a credit score. In general, the longer the history, the more effect on the score.

Effects of late payment on your score

Late payments are directly related to payment history. It is the most common thing among the consumers and it creates a tremendous effect on your credit score. Suppose if you make a thousand-dollar payment for the various credit card but you forget to make a payment for $50 for a single credit card. It will hurt your credit score dramatically. The longer time you late the payment, the more effect on your score. So be care full about things that affect credit score negatively.

A single late payment could have a significant effect on your credit score if you hold a higher credit score. According to the FICO data, a 30-day late payment could hurt you as much as 90 to 110 points drop in your FICO credit score. Provided that you are an initial score of more than 780 and you never missed a payment on a credit card.

For example, a consumer with only two late payments history and an existing 680 FICO score could drop 60 to 80 point in his score after hit with a fresh 30 day late payment on any of his credit account. (one is two years ago a 90-days late payment on credit card account and the second one is approximately one year ago a 30 days late payment on an auto loan account)

How collection affect your score

If you fail to pay your debt before the 90 days late payment periods then your debt sold to a third-party collection agency or internal collection department. It will update your credits reports and your score will suffer.

Are you thinking about the collection may affect your credit score? Do not worry, we can help you in this regards and you can bring back your credit point. You may be surprised by what is on your credit report. It may be something from years ago like an old cable bill that you missed when you moved. That happened to me when I received a collection notice for $156 for an old Comcast bill from a house I’d moved from several years ago and didn’t even know about it.

That one collection notice on my report was driving my score down by maybe 100 points. That was an honest mistake. Every time when you see a collection account on your credit report, you feel uncomfortable thinking that this account has a negative effect on your credit score. You will see this account in your credit report each time a collection agency reports debts to credit bureaus. Thus, these affect your credit score negatively.

However, there are some ways to get the thing sorted out. And you should always try to stay on top of all three credit reporting agencies. To avoid the damages of your credit score by the collecting account keep reading to find how the collecting agencies work.

Collections can be removed

The amount of collecting debt has no effect on your credit score. For your better understanding if you have a debt of $500 and it reduces your credit score by 50 points. A $1000 debt also reduces the same amount of point – 50 points from your current credit score.

There will be a major reduction in your credit point when the first times the collection account reports. After that, each additional collection will add a limited effect on your credit score.

Removing a collection account will usually boost your credit score. It’s always good to stay on top of all three credit reporting agencies. When you contact a collector for settlement, you should try to agree with them to a “payment for deletion”. There is a good chance it will help to boost your score. You have to check whether you paid the collection or remove the collection account, in both cases how many point you can earn.

In this regard you have two options: 1) A mortgage company can pull your credit in the last 30 days and they can run such simulation. or 2) you can sign up in a three bureau-monitoring site for www.privacyguard.com and run the analysis.

These scores are consumer score, not the FICO score but it helps you to decide which collection(s) should you try to pay or delete based on the potential score improvement. Of course, there may be another reason to pay a collection. But if you are looking for score improvement, follow the instruction above or call us – we always use these tools. Not all agencies will agree to pay for deletion.

When Charge off play the game

A creditor will charge off your account after 180 days of no payments when you do not pay anything to debt. A charge off has a highly negative impact on your score. It stays on your report for 7 years from the date it missed the payments.

The creditor often uses a third-party debt collector to attempt to collect payment after an account has been charged off. The original creditor may hold the account but assign it to the third party for collection. In this case, the original charge off with the balance will be reporting. However, a new collection account will report to your credit file if the creditor sells the debt.

Now you have two major negative items on the same debt, a charge-off, and a collection. It is a good idea to solve the problem with the original creditor before they sell the debt and the collection account shows up. The first collection can cost you 100 points negative if your credit score is in 700s. If you have lower scores and other negatives. Then the new collection has less effect on your credit score. But it is still significant. So it’s a good idea to take care of things that affect the credit score.Since FICO, algorithms are extremely complex and the details of how they work kept highly secret, we cannot describe exactly how many points your score will drop due to a charge-off or a collection.

Hard inquiries may affect your Score

Applying for new credit may have an effect on your credit score but depends on each person’s credit history. In general, there is very less effect on your FICO score. One additional credit inquiry (hard) may result in five negative points in your score.

Hard inquiries are those, which generated when you apply for new credit and your lender request for your credit to a credit bureau. Even if your credit score changes by inquiry, it will list as factors that affect your credit score.

Therefore, Inquiries from potential creditors consider against you, but your own request does not any impact on your score. But you should always try to stay on top of all three credit reporting agencies. Do not apply randomly for your credit cards. Before applying to do your homework, Compare rates, terms and features offer by the lenders and then only apply. It is not just you, and it’s not your fault. It happens to all of us. One study showed over 34% of Americans had 620 or lower “Bad Credit” scores. Maybe they had a health issue, maybe they were in between jobs.

Chapter 6 :

How to Improve Credit Score Fast in 2020 (Revised)

In this Chapter you will learn:

  • Various Credit Scoring Model and Various items of your report
  • Readings Reports and How to get free copy of your credit report 
  • Force Creditor to Validate Debt – Boost your Score
  • Dispute any mistakes or misreported items to boost your score
  •  Eliminate old debt – Some time help
  • Optimize your debt ratio – do it in a proven way
  • How to Increase credit Limit
  • Fix your credit with this FCRA Loopholes
  • Know which Credit Cards to Use When you have bad credit
  • No Credit Check Loans and Cryptocurrency – Opportunity to start
  • What you do if you Sued Legally 

But what if you need a quick boost in your FICO score?

Don’t worry, Take control of your credit by using these credit repair secrets the financial industry doesn’t want you to know about. They’re all legal, and we know they work based on how credit reports work. This is how truly improving your credit score.

How to improve credit score

Secrets #1: Dispute any mistakes or misreported items – can boost your score

The only way to protect yourself and your money is to stay on top of Big Brother. Keep in mind there are laws about what can appear on your credit report, and disputing these can double the rate your credit score rises, so you’ll achieve your goal of financial freedom much faster.

Of course, disputing items on your credit report can be a bit daunting. There are two ways to do it. The first option is to use various methods to remove the negative items from your credit report by yourself (Do it yourself way). Find the step by step guide of how to dispute credit report here.

The second option is to take professional help (credit Repair Services) to remove your negative from your credit report. Obviously, they will charge you but they can do it faster.

How to dispute credit report with all the CRA’S

Before going to start disputing negative, it’s very important to take preparation for many other things. Here are all the things that you need to dispute a credit report. Find the whole process and the information step by step and just go through it.

  1. Understand the Credit Scoring Model
  2. Know the three credit reporting agencies
  3. Get your free Credit Report
  4. Make an itemized list of everything showing on the report
  5. Major agency’s dispute departments contacts
  6. Disputing items on your credit report

Understand the credit scoring model

There is two widely used credit scoring model used in the USA, namely Fair Isaac Corp’s FICO and Vantage scoring model. Both models range between 300 and 850 – the higher the score, the better. The average FICO score in the United States is currently an all-time high of 695. Although there is a different scoring model exists, which causes this figure to fluctuate by a few points between 660 to 720.

Remember George Orwell’s dystopian novel 1984?

Big Brother was always watching the citizens of Oceania. Everything they did was monitored and judged harshly. The credit bureaus work very much like Big Brother, but you have the power to overcome and make your financial dreams come true.

We will also discuss how to dispute credit report with the credit reporting agency using a simple letter format. Feel free to skip ahead if you already know this.

Know the three credit reporting agencies

There are mainly three major credit reporting agencies typically used by lenders – Equifax, Experian, and TransUnion. Each has different methods of determining your FICO score, and some present you with an educational credit score that differs from the actual FICO score your lender will pull.

Even official FICO scores are different, depending on the type of lender. Auto lenders use FICO Auto Scores, while credit card issuers use FICO Bankcard Scores and mortgage lenders use FICO Score 8.

To calculate your FICO rating, Equifax uses FICO Score 5, Experian uses Fico Score 2, and TransUnion uses FICO Score 4.
Different lenders query different credit agencies, and they report your payments and credit history to different agencies too. This means a debt, credit card, or default could show up on one, two, or all three of these agencies.

The only way to protect yourself and your money to stay on top of Big Brother. All three agencies are required by federal law to provide you with a free annual credit report at your request once every 12 months. You also have 60 days to report a free copy if you’re denied for credit, insurance, or employment based on bad credit.

Collect your free credit report

Get your free credit report and most important you need an itemized list of everything showing on the report. Then understand and analyze every item on your credit report carefully and take action accordingly.

All three agencies are required by federal law to provide you with a free annual credit report at your request once every 12 months. You also have 60 days to report a free copy if you’re denied credit, insurance, or employment based on bad credit. To order, visit annualcreditreport.com or call 1-877-322-8228.

Make an itemized list of everything showing on the reports

It’s not enough to just see your score. Also, you need an itemized list of everything showing on the reports. So that you can dispute any mistakes or misreported items. Keep in mind there are laws about what can appear on your credit report. Disputing these can double the rate your credit score rises, so you’ll achieve your goal of financial freedom much faster. Here are all the things that you need to dispute a credit report.

Major agency’s Dispute departments contacts

Of course, disputing items on your credit report can be a bit daunting. Here’s the contact information for each credit agency’s dispute departments:

Equifax
Online: ai.equifax.com/CreditInvestigation
Phone: (800) 864-2978
Mail: Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30374

Experian
Online: experian.com/disputes/main.html
Phone: (888) 397-3742
Mail: Experian
P.O. Box 4500
Allen, TX 75013

TransUnion
Online: dispute.transunion.com/dp/dispute/
landing page.jsp
Phone: (800) 916-8800
Mail: TransUnion LLC
Consumer Dispute Center
P.O. Box 2000,
Chester, PA 19016

Disputing items on your credit report

The Consumer Financial Protection Bureau has an easy format with phrasing that will force these agencies to respond. It recommends mailing a copy of any documentation you have, along with your credit report from the agency and a copy of your driver’s license or government-issued ID card.

Using this simple letter format, you’ll strike fear into the heart of Big Brother:

Be sure to request a receipt copy so you have proof that your mailing was received.  Therefore this simple step is the secret to winning against collectors in court. So it can save you literally thousands of dollars or more on your debts.

This is especially necessary with Equifax, which is known to be the most difficult of the three agencies to deal with. So if these agencies don’t respond the way they’re required to by law (which we’ll discuss in more detail below), don’t hesitate to fight Big Brother with an even bigger partner – the government. Because the credit score Affects your life in many ways. What to do if the credit reporting agency refuses to fix your credit report.

Related: what next if the dispute with CRA’S not solved within 30 days

Here are few important tips to remember when disputing

1. When disputing, start with closed accounts. If the account is open, there is a good chance that the creditor ill verifies it.

2. When disputing, Start with the oldest closed accounts first. Many times, older accounts sold or transferred multiple times, and the current debt collector does not have verification of the debt. Additionally, the equal credit opportunity Act only requires creditors to maintain written documentation for twenty-five months (see chapter 15).

3. Look for duplicates accounts, Many times, the original creditor will report the account is derogatory and sell it to a collection agency, who will also list it as derogatory. Many times, the same single negative account can be on your report as many as two or three times. This is illegal. Simply dispute the accounts with the credit bureaus and inform them that they are duplicate accounts.

4. Scrutinize your credit report for the accounts that are past the statute of limitation (seven years). The seven-year periods now starts 180 days after the account first delinquent. However, it used to be from the date of the last activity. Congress has changed this so that debt collectors cannot continue to re-age old accounts.

You can also dispute the debts directly with your creditors, which is what the next section is all about. We’re going to discuss the secret to defend yourself against collectors.

Secrets #2: Force Creditor to Validate Debt (and Excuse it) – helps to boost the score

Now we’re going to discuss another secret that will help you with improving your credit. You should know the various excuses that are valid to dispute your debt and force your creditors to validate debt so that it can remove from your credit report. 

A customer named Jill recently got divorced from her husband. She was distraught because debt collectors kept hounding her for debt her husband racked up before their divorce was finalized. Jill was terrified of her ex-husband’s bad financial decisions would follow her for the rest of her life.
But there’s no reason for Jill to live in fear.

While we like to think of banks as faceless monsters, they’re organizations filled with people just like me and you. Many of them will excuse late or missed payments under extraneous circumstances. Credit reporting agencies and even courts will accept these excuses too.

specific excuses Experian accepts to dispute the debt

Here are the specific excuses Experian accepts to dispute debt as of August 2019:

– Payment never late
– Not mine or no knowledge of account
– Account paid in full
– Account closed
– Unauthorized charges
– Belongs to ex-spouse
– Balance incorrect
– Included in bankruptcy
– Belongs to the primary account holder
– Corporate account
– The balance of history inaccurate
– Belongs to another person with the same or similar name
– Identity theft

Like I mentioned before, documentation is the key to disputing your debt. Be sure to keep copies of payment receipts, court papers, and anything else that will prove that you don’t owe the money. Use the same letter which I already discuss and add whichever specific phrase applies to you and back it up with documentation.

Jill was able to prove the debts belonged to her ex-husband because she sent copies of her divorce paperwork to the creditors and credit agencies. Because Jill is no longer married to her deadbeat husband, she’s no longer responsible for his debt. She used the phrase “belongs to ex-spouse” and got the debt removed from her credit report.

That’s all it took to nearly double Jill’s credit report. And we don’t just divorce people. Sometimes we end relationships with our creditors too.

Why you force creditors to validate the Debt

If you no longer have a relationship with the company, make them validate the debt. This is done through your credit report dispute. It’s also the successful defense used by many debtors in court during foreclosure, repossession, and collection hearings.
Robo-signing was an abusive practice uncovered after the 2010 foreclosure crisis. Banks illegally falsified loan documents through a third party and used those documents to foreclose on people’s homes. It’s one of many secret practices used by creditors to stick you with debts you don’t know they can fight it.
Using the law to your advantage can help you win against debt collectors in court. Here’s a secret you probably didn’t know.
The Fair Debt Collection Practices Act gives you 30 days from the first notice of debt from a company to dispute the validity of the debt. If the debt collector can not provide this validation, you can sue in federal or state court for $1000 in damages. In some states like Arizona, improper debt collection practices are also a criminal offence.

If you believe your rights under the FDCPA have been violated, report the violation to the Federal Trade Commission. Their website guides you through the process. Don’t let anyone abuse you, financially or otherwise. You’re a strong, independent person who’s capable of amazing things.

And while we’re discussing the FDCPA and FTC, let’s review some of the rules regarding how long debts can stay on your credit report (and how much they can be increased after being charged off).


Story: Late Fee Lambada


There was one senior on the fixed income we worked with, let’s call her Rose. She was in agony because she was trying to get a loan to help her daughter with a medical bill. Although she didn’t have much credit, she had a string of Store Credit Cards, from Macy’s to Sears that she kept up with regularly. As long as the coral shoes match that dress, right!
Her problem? A few late payments were devastating her score! Although the Postmark Prompt Payment Act never passed, Rose was able to pirouette around several late fees. Look, spaghetti arms.

“According to FICO data, a 30-day delinquency could cause as much as a 90- to 110-point drop on a FICO Score of 780 for a consumer who has never missed a payment on any credit account.” (Equifax blog 2014)

So, what did Rose do? She Asked! And they waived her late fees – even put it in writing. With her updated score Rose was able to get the loan she needed to help her daughter through a difficult time.

Tip: Just Ask. If for whatever reason you do make a late payment, call your Creditor and just ask for a “Waiver.” Surprisingly it works more times than not.


If you really make a late payment recently, there is still a chance you can remove it from your credit reports by Ask nicely for a goodwill adjustment or Negotiate to your creditor. If you are not at fault, reports dispute the payment.
Tips: If you miss the payment on accident, call your issuer to see if it will abstain from reporting it to the credit bureaus or save the late fee. Most credit card companies will agree on your request if your payment history is good enough.
For your better understanding, please go through the example. Jennifer, an authorized user on her fiancée account and forgot to make the payment ($37). His score go down tremendously (100 + points),

Now her question: Is there anything that can help to get the score up?

Answer: Ask your credit card issuer or lender if they can forgive that late payment. Maybe you are out of the country on vacation and you had no idea the bill existed. Credit Card Company is pretty forgiving if you have a good record of making on-time payments.

Here is an example for you. Susan a middle age woman, her husband told that he would no longer be able to work to medical issues. It is going to take months to get disability and in the between the time we will have very little income. We are not behind our bills yet, but next month we will not be able to make our minimum payments. What should we do?

Answer: Call your creditors and explain the situation. Many issuers will help you work out an alternate payment plan or agree to waive a late fee or holding of reporting a 30-day delinquency to the credit bureaus.

Secrets #3: Eliminate old debt – sometime it helps

How to negotiate a debt settlement – You must know

A recent customer named Linda was stuck in a cycle of debt that was killing her credit report. She fell behind for five months on her credit card payments, and even though she started paying again, she was still consistently showing as 150 days past due. Every payment Linda made dragged out the past due to balance, and she couldn’t afford to get ahead.

Linda was a victim of a perpetual cycle of debt, and extreme measures were needed to clear up her credit report, so she could live a normal life again. And no, I’m not talking about bankruptcy, which is the last resort.

How long negative information impacts your credit report

Information that negatively impacts your credit report only stays on your credit report for seven years and 180 days after the incident. This doesn’t include bankruptcy, which remains for 10 years.

The “incident” is considered a late payment or charge off. The Federal Deposit Insurance Corporation requires instalment loans like a mortgage or car loan to be charged off after 120 days of delinquency. Credit cards and other revolving debt must be charged off after 180 days of delinquency.

Once your account is charged off, it’s sold to a debt collector for less than 20 percent of the total balance. This gives you leverage to negotiate a settlement as low as 30 percent of the total debt. This is a trick many credit counselling companies use to consolidate and lower your bill payments.

In Linda’s case, it was necessary to stop making payments that dragged the debt out longer. Instead, we negotiated a settlement. Keep in mind, settled accounts don’t help your credit score as much as paid-in-full accounts. But they don’t negatively impact it as much as unpaid debts.

If a settlement isn’t accepted by the creditor, settle the debt with the debt collector. Even though they purchase the debt for pennies on the dollar, debt collectors still attempt to collect the full balance.

Debt collectors also continue charging interest and late fees on your unpaid debt. This increases the amount of the debt they can eventually sue you for. In most states, third-party collectors can continue adding interest for three to seven years, although sometimes it’s indefinite. This is why it’s important to settle all your debts as fast as possible.

Check your state laws to determine the statute of limitations in your specific circumstances. For example, in California, collectors have four years to legally collect.

Things to remember when negotiating a debt settlement or cancellation

When you negotiate a debt settlement or cancellation, be prepared to receive a 1099-C tax form for cancellation of debt. The IRS considers cancelled debt to be taxable income that must be reported when you file your taxes.

If you’re being targeted by collectors, don’t worry. There are laws in place that dictate how collectors can pursue you for this debt.

Next, we’ll discuss one simple phrase that can give you peace of mind by ending all the harassing phone calls and letters from debt collectors.

Secrets #4: Optimize your debt ratio – do it in a proven way

Now we get to the fun part, where I’ll teach you the magic number credit agencies really want you to carry in debt and why.

Your FICO credit score is calculated using the following formula:

35 percent payment history
30 percent amount owed
15 percent length of history
10 percent new credit
10 percent types of credit

This means the bulk of your credit score is made up of on-time payments and how much available credit you have. Obviously paying your bills on time will improve your credit history over time, so we’ll focus on the debt to credit ratio.

Many experts will tell you to stick to 30 percent of your available credit. This means if you have $1000 of credit, you should only have balances totalling $300.The truth is the more available credit you have, the better your score will be. Maintaining low balances on credit cards can raise your score by up to 100 points.

I recommend keeping your available credit at 94 percent. So does Experian. I checked my own credit report one day and that’s the advice they gave me to raise my own credit score. You should only be spending $6 for every $100 of available credit you have to successfully raise your credit to the best possible score.

What this shows creditors is that if something bad happens in your life (medical emergency, job loss, etc.), you still have access to funds to pay your bills for the next six months. This lowers your credit risk and makes you someone lenders love to work with.

I have another game-changing trick up my sleeves to boost your credit score.

Manage and use your credit responsibly

Having that said, the most important is how you manage and use your credit responsibly. You should never be late to pay your credit card bill. Use online payment option to manage and set your bill payment automatic. Always spend less than you earn. For this, you need a budget that you should follow strictly.

Maintain a high balance on each card and increase credit limit

Only spending six percent of your available credit makes it difficult to gain credit increases from your credit card companies. They’re not going to raise your limits on a card you never use.

So, I use this powerful lifehack to boost my credit score into the stratosphere, and you can have massive success with it too!

What I do is charge and maintain a high balance on each card for two months. On the third month, I pay it all off and let it sit for two months. This way, I’m using my credit card enough for the bank to continue raising my limit (thus raising my available credit) while maintaining enough available credit to keep the credit agencies happy.

Master this method, and you’ll notice your score go within months. And there are a few more insider loopholes to instantly transform your life. All these tricks have the tremendous potential to increase your credit score that already proven.

Pre-Due Date Payments

One trick to boost the credit utilization piece of your score without really having to change your spending behaviour is to pay your bill approximately 10 days before your due date.

Example:
Balance: $65
Monthly Spend: $500
Credit Limit: $1065
Due: 25th of each month
Monthly Spend Paid On Due Date (25th of the month): 53% Utilization
Monthly Spend Paid 10 Days Pre-Due Date (15th of the month): 6% Utilization
Credit Utilization Formula: Credit Used / Total Credit

Credit Bumpers to Protect History – Cushion the Blow

Just one late payment that happened years ago, maybe when you were back in college, could significantly impact your score today. One trick to absorb some of the impacts of a negative on your Credit History is to use Credit Bumpers by adding more Accounts to your total number of Open Accounts. This example shows how much faster you recover from one late payment when you have 5 open accounts instead of just one.

Example:
1 Account with 1 Missed Payment:
Year 1: 11 On-Time / 12 Total = 91.67% Very Poor
Year 2: 23 On-Time / 24 Total = 95.83% Very Poor
Year 3: 35 On-Time / 36 Total = 97.22% Poor
Year 4: 47 On-Time / 48 Total = 97.92% Poor
Year 5: 59 On-Time / 60 Total = 98.33% Fair

5 Account with 1 Missed Payment:
Year 1: 59 On-Time / 60 Total = 98.33% Fair
Year 2: 119 On-Time / 120 Total = 99.17% Good
Year 3: 179 On-Time / 180 Total = 99.44% Good
Year 4: 239 On-Time / 240 Total = 99.58% Excellent
Year 5: 299 On-Time / 300 Total = 99.67% Excellent

Credit History Formula: On-Time Payments / Total Number of Payments

    Secrets #5: Fix Your Credit with this FCRA Loopholes

    Do you know, how creditors treat your credit report is also regulated by federal law, specifically the Fair Credit Reporting Act. There are three important sections of the FCRA that can help you clean up your credit: Sections 604, 609, and 623.

    Do you know How to Fix Your Credit with this FCRA Loopholes? Take the benefit of all these FCRA loopholes that help you to improve your credit.

    Section 604 – Permissible purposes of consumer reports

    When a financial institution, landlord, or employer checks your credit report, it’s called a hard inquiry. These hard inquiries could lower your credit score and cause you to be denied credit. Especially when you made multiple hard inquiries in a short time span.

    Section 604 provides guidelines for what constitutes a permissible hard inquiry, including a signed contract from you. What most people don’t know is these hard inquiries aren’t typically tracked by the credit agencies themselves. Instead, they use a third-party company called SageStream to track this data. This gives you a chance to increase your credit score.

    Contact SageStream on their website to request a security freeze on your information. This will stop them from reporting hard inquiries to the credit agencies. Subsequently, it may help to increase your credit score by a few points.

    Section 609 – Disclosures to consumers

    On top of the FDCPA letters you send to collectors, you should also send an FCRA 609 letter to credit agencies. This piles the work onto the creditors and makes their lives more difficult. They now must respond to both your request and the credit agency’s request.

    If the collector or credit agency doesn’t respond within 30 days, you now have a paper trail of them not working with you. You can send a non-response letter to have the items removed from your credit report. If it’s not removed, report them to the Better Business Bureau, FTC, CFPB, and consider civil action in court.

    Section 623 – Responsibilities of furnishers of information to consumer reporting agencies

    You would think creditors would keep accurate records of all information and accounts, but this isn’t the case. They often lose information, and this is the most solid defense used in foreclosure cases. Most of the time the mortgage company can’t provide the original paperwork and the court dismissed the case.

    After you’ve disputed the negative credit items with the credit agency using Section 609 letters, Section 623 letters force the creditor to prove the debt is valid. If they can’t, you have legal grounds to pursue civil action in court and following these three sections in order give you a solid defense to not only have your credit report corrected, but also receive financial compensation for damages caused. You may continue reading to know more others credit repair loopholes, you may skip if you already know.

    Section 605 – derogatory information verification

    If the accurate derogatory information in the consumer’s file cannot verify, the reporting agency is required to remove it. Not just for the original company, this law required all the company that reports negative credit events needs to produce verifiable proof of the negative event. It cross-checks the accountability of credit reporting agencies for the negative information they pass on.

    Due to this loophole, the reporting agencies need to investigate and remove any disputed, negative item from your credit report within 30 days if it cannot verify.

    Only one way to find out Mr.Mclnnis challenging the credit bureaus to verify the negative credit events in the credit reports of his clients by producing a copy of the original creditor’s documentation.

    He did not challenge the correctness of these events. He just used a legal strategy to challenge the credit bureau’s ability to verify its correctness. They have no right to continue to maintain it on their credit reports if they cannot verify it. In addition, credit bureaus began to comply. They remove the negative events from the credit records.

    Secrets #6: Know Which Credit Cards to Use when you have bad credit

    When you have bad credit, a secured credit card is the only option you have. That’s what we got for Brian, and by maintaining a good payment history on his secured credit card, he raised his credit rating by nearly 50 points in less than a year. Here’s a list of the best-secured credit cards to apply for, including the Open Sky Secured Visa and Discover It Secured.

    Also, keep a credit card issuer’s customer service track record. J.D. Power releases a study every year on credit card customer satisfaction, and the top three card issuers are American Express, Discover, and Capital One. These are the companies most likely to resolve your issues on the first call. As for banks, Capital One, BB&T, and Chase take the top marks.

    Avoid cards with high fees and bad customer service. Last year, the worst credit cards include First PREMIER Bank Gold Credit Card, Bancorp South Gold Master card, and Arvest Bank Visa Classic Card. These cards may hurt your credit rating more than they help.

    Also, find that piggyback hack can boost your Credit Score. Piggybacking is probably one of the most underutilized effective ways of boosting your score tremendously with little effort or time.

     Know Which Credit Card you should Avoid

    Our customer Brian couldn’t understand why his credit was so bad. He seemed to be doing everything right – he paid off all his old debts and avoided credit cards. Credit cards are necessary to maintain a healthy credit score though.

    But not all credit cards are created equal, and they can affect your credit score in different ways. Before applying for credit cards to raise your credit score, it’s important to understand how they truly impact your FICO rating.

    When discussing credit limits, we’re only talking about normal credit cards, which are called revolving lines of credit. This means if you have a $1000 limit and a $600 balance, you can still spend $400.

    Secured credit cards (which are prepaid) and store credit cards act more like installment loans on your credit report. This means if you have a $1000 limit and a $600 balance, it still shows on your credit report as a $1000 loan with no available credit.

    Secrets #7: No Credit Check Loans and Cryptocurrency – opportunity to start

    For those who haven’t caught on, Cryptocurrency has the promise to potentially turn the banking system on its ear. Since 2009, the BitCoins market emerged along with BlockChain technologies. From then it’s a starting of ushere in a new era of making and receiving payments. It’s completely separate from the old status quo banking institutions, while substantially raising privacy. Banks are scared! Already we’ve seen larger banks like Bank of America, Chase, and Citi bank users from buying BitCoin with their bank’s credit cards.

    Today you can easily find crypto debit cards. However, debit cards don’t do anything to build your credit history or improve your credit score. You may leverage the cryptocurrency sitting in your crypto wallets to build your credit score.

    A crypto-secure credit card may give you the opportunity to start. Although No Credit Check Loans and Payday Loans sometimes get a bad rap. But they have their place in the market when used responsibly. For cryptocurrency holders, No Credit Check Cryptocurrency Block-Chain backed loans offer liquidity.

    Like Margin Accounts that you may have if you trade stocks. With Cryptocurrency Block-chain backed No Credit Check Loans there is only a small chance of a credit reporting issue. A Margin Call happens when If by some chance your equity falls below the maintenance margin value established by FINRA or your creditor. When you don’t have enough equity to repay the loan, you become personally liable. Only then you can send it to Collections to end up on your credit report. Like Margin Accounts, failure to pay back your outstanding Cryptocurrency loans when your margin value drops below the liquidation level may affect your credit score.

    Secrets #8: Search Courts Records for Judgments

    If you don’t pay a creditor, they can sue you in your county’s superior court. If they win this case, they may be able to garnish your wages, but you won’t go to jail. Debtor’s prisons are illegal.

    To sue you, they must then serve you with a court summons. If you ignore it, it can result in a summary default judgment against you. It’s important to always respond to court notices.

    This isn’t always easy. Sometimes process servers will serve you at old addresses. You may be deployed for the military, be in the hospital, taking care of family emergencies, or simply miss the notice.

    Even worse, some collection agencies will hire law firms (or often are law firms themselves). So they’ll send collection notices with the law firm’s header to scare you into paying. These are not official court documents, that need to deliver to you either by certified mail (requiring a signature) or a process server.

    What you do if you sued legally

    To find out if you are being sued in court or have any judgments against you, call your county’s superior court. Most counties have online public records search you can also find by typing “____ County Court Records” and entering your first and last name into the court’s search engine.

    If sued legally, contact the creditor listed as the plaintiff in the court summons. Even after entering a judgment, they are often willing to negotiate. Here’s documentation from a real client we successfully negotiated down $4000 of debt for:

    Sued for a debt isn’t the end of the world. Because you can use all the documentation that you have in your defense. This includes payment records, hospital records, court records, and documentation of any collection efforts used against you.

    I’ve said it before and I’ll say it again – documentation is the secret sauce to defending yourself against debt collectors. If you can prove they violated the law in collecting your debt, you can win the case against them. The strategy explains above could be the answer to the question of how to increase credit score.

    If you’re having trouble mastering these tips, don’t hesitate to contact us. We’re always happy to help people achieve their financial dreams.

    Now I’d Like to Hear From You

    Now I’d like to hear what you have to say:

    Which tip from today’s post do you want to try first?

    let me know by leaving a comment below right now.