Rapid Rescore

Credit Repair Results

 

Every dispute cycle we review status of our clients scores.  This is an example of the score increase we commonly see with our process.  Credit scores can move up significantly if you take the proper steps.

Before taking on a new client, I review the credit report to ensure we’re going to have a successful score increase based upon our actions.  Some clients we can’t help, and I let them know before wasting time and money.

If you’re interested in improving your credit, go to http://www.privacyguard.com and setup a credit monitoring account.  Then contact me direct and we can go over your credit report to see if you’d be a good fit for our program.

Jason Hall

President and Certified Credit Expert

Direct- 949.505.9971

Mobile- 808.633.5023

Fax- 866.567.8054

WWW.RAPIDRESCORECREDIT.COM

First Step To Raise Your Credit Scores

Pay down your credit cards to 10% of the credit limit.  Here’s proof…

 

score increasess

Many mortgage applicants will get a surprise boost in their credit scores

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It could be a boon for some home buyers — their credit scores will get a surprise boost — but worrisome for mortgage lenders, landlords and others who depend on credit reports to evaluate their potential customers.

In a little-known policy shift, the three national credit bureaus — Equifax, Experian and TransUnion — plan to stop collecting and reporting substantial amounts of civil judgment and tax lien information on public records affecting millions of American consumers starting July 1.

Both types of information have negative impacts on credit scores and remain in credit files for extended periods. Tax liens are levied against properties when the owner is delinquent on payment of taxes. Civil judgments — debts owed by the losing party in legal disputes that typically involve monetary damages — are ordered by courts.

With the elimination of this information from vast numbers of consumer credit files, some lenders are concerned that when they order credit reports to evaluate an applicant, they may no longer get the full picture of the risk of nonpayment posed by the consumer.

David H. Stevens, president and chief executive of the Mortgage Bankers Association, told me that if tax lien and civil judgment data is suppressed from credit reports, “it’s unclear whether creditors will be able to make informed decisions” about loan applicants. Stevens said that blocking this information will raise some applicants’ credit scores artificially, creating “false positives” that make individuals appear lower risk than they are.

A study by Vantage Score Solutions, a credit scoring developer created by the three credit bureaus, estimated that 8 percent of consumers would see an average score increase of 10 points on its most widely used scoring model if all civil judgments and tax liens were removed from credit reports. Stevens said 8 percent and 10 points may sound small, but in the mortgage business they equate to significant numbers of applicants.

Tim Coyle, senior director of real estate and mortgage for LexisNexis Risk Solutions, a large data and technology company that sells creditors data on public records including judgments and tax liens, told me in an interview that an internal study by his firm found that borrowers who have a judgment or a tax lien are 5½ times as likely to end up in serious default or foreclosure as are borrowers who don’t have such items in their files.

The three national credit bureaus have been tight-lipped about the details of their July 1 changes. Mortgage lenders say they have heard nothing from the three bureaus and are in the dark about the possible ramifications. Stevens told me that “nobody” in the mortgage industry “knows about this.”

In response to a request for this column, the bureaus’ national trade organization, the Consumer Data Industry Association, provided a statement indicating that the changes are part of the bureaus’ “National Consumer Assistance Plan” that follows a settlement in 2016 with 31 state attorneys general over alleged problems with credit reporting accuracy and correction of errors on credit reports.

Eric J. Ellman, the group’s interim president, said the bureaus have adopted “enhanced public record data standards for the collection and timely updating of civil judgments and tax liens.” The standards will apply to new and existing data in files and will require that the public records sources include the individual’s name, address and Social Security number or date of birth. Public records sources will also need to be updated on a timely basis to be eligible for inclusion in credit files. Most civil judgment data and up to half of tax lien information cannot currently meet these tests, according to one industry estimate.

Chi Chi Wu, an attorney with the National Consumer Law Center and an expert on credit issues, welcomed the upcoming change. “To the extent that it’s preventing errors” in credit reports, she said — especially situations where a credit file has one consumer confused with another, which Wu says occurs too frequently — “it should be a good thing.”

How much of a good thing it will be for you depends on what’s in your credit files and how lenders adapt to the elimination of what they consider important information — if it’s accurate.

The 10% Rule And Your Credit Scores

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Credit card balances can bounce your scores around every month.  Max out your card and your scores plummet, pay off your cards and scores jump.  This is due to “credit utilization” on your revolving credit accounts (credit cards).  In the FICO scoring model, your utilization is reflected in 30% of your credit rating.  This is the 2nd largest factor to your credit rating, only behind payment history which is 35% of your rating.

There are online “what if ” simulators I’ve worked with over the years, and I’ve run numerous scenarios on credit utilization and your credit scores.  I’ve run simulation on paying off credit cards, paying down to 30% of limits, and down to 10% of limits.  On all the simulators I’ve found, the most points for your credit scores isn’t to pay off your credit cards, but to have them at a 10% balance of the credit limit.

So the next time you’re trying to raise your credit scores for a mortgage or auto loan, pay down your credit cards to 10% of the credit limit.  You’ll have to wait until your next statement is generated for the balance to report to the credit bureaus to help your scores.  Or you can “Rapid Rescore” those balances to update in a week.  A Rapid Rescore is an unscheduled update your credit accounts.

 

Why You Should Not Use Credit Karma

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Ya know that old saying, what is free isn’t good and what is good isn’t free??  Well the same applies to this website.

Credit Karma has been around for years giving away free credit report and score info.  Most people flock to this website because it is free.  But what most don’t realize is that the information on the site can be misleading (credit scores) or just plain incorrect.

Let’s first talk about the credit scores on the site.  Those scores are what are called “Vantage 3.0 Credit Scores”.  To my knowledge, no bank uses this credit scoring model.  So they are not only useless but can also be higher (by a lot) than a credit score that a bank will use to extend you credit (FICO score).

So to most people’s surprise, they go to Credit  Karma and see a credit score of 680 for example.  They then go to a bank for a mortgage or auto loan and the bank pulls a FICO score which ends up being a 620.

Next let’s talk about what Credit Karma really is, it’s an advertising site for credit cards, auto loans, mortgage loans, and even credit repair.  Your information is being collected and shared with companies willing to pay for the data.  When you apply for a credit card, auto loan, mortgage loan, or credit repair through the site they get paid from the advertiser.

So what’s the big deal with that?  Well, in order to put you infront of their advertisers Credit Karma will send you false email alerts that your credit info has changed (for the worse).

Case in point, I was emailed an alert from Credit Karma stating that one of my credit card limits was reduced.  I logged into Credit Karma to see which card’s limit was reduced.  I then called my bank to see if they lowered the limit, and they hadn’t.  So they use these deceit tactics to try and make money.

My advice is to pay for your credit monitoring.  I personally use www.PrivacyGuard.com . It’s inexpensive ($20 per month) and has a credit score simulator built into the site that will show how much your scores will go up when you pay down credit cards, bring past due accounts current, etc…  Their credit scores aren’t FICO scores, they are called CreditXpert scores which are pretty similar to FICO.

For more credit info or if you’d like me to review your credit report, please feel free to contact me direct, 7 days a week.

Thank you,

Jason Hall

President and Certified Credit Expert

Direct- 949.505.9971

Mobile- 808.633.5023

Fax- 866.567.8054

WWW.RAPIDRESCORECREDIT.COM

 

Credit Tip- Reviewing Revolving Accounts Monthly

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Revolving credit accounts (credit cards) are the most “active” accounts on your credit report.  They have aspects to them that no other credit account has.  The main difference between a revolving account (credit card) and an installment account (auto loan) is the “utilization” of the credit line.

Installment loans are fixed payment loans that have the principle balance reduced on a scheduled payback through the term of the loan.  On an installment account, it’s not possible to increase the balance by using the credit line.  This is only possible on a revolving credit line.

Revolving credit accounts impact your credit scores on multiple fronts.  They include credit utilization (balance / limit as a percentage), payment history, age, and credit mix.  Installment accounts only have payment history, age, and credit mix that are reported to the credit bureaus to effect your rating.

It’s important to review how your revolving credit accounts are reported to the credit bureaus.  Review the “balance” and also the “limit” reported.    If your balance is higher that the reported limit on the account, this can significantly lower your credit scores.  Pay the balance down below the limit, or best below 10% of the credit line to improve your scores.

Keep an eye on your credit limits on your credit cards.  Banks can increase or decrease your credit limits based upon your performance.  If your bank feels you are a credit risk (missing payments, maxed out credit lines, etc..) they can lower your credit limits on your credit cards which can further lower your credit scores.  Credit card banks often check into your credit with a “soft pull” or a “account review inquiry” that doesn’t impact your credit scores, it just allows them to see all of your other credit accounts’ performance.  If they see risky credit, they may lower your credit limit or even close your account.

And lastly, monitor your credit monthly.  There are many credit monitoring sites and most credit card banks offer free credit monitoring.  Check yours to setup your monitoring alerts.

 

For a personalized credit check up, feel free to contact me direct for a credit report consultation and review.

 

Thank you,

Jason Hall

President and Certified Credit Expert

Direct- 949.505.9971

Mobile- 808.633.5023

Fax- 866.567.8054

WWW.RAPIDRESCORECREDIT.COM

Quick Credit Tips for 2017

quick-tip

There are many resources for credit tips out there, they come from family, friends, professionals, and the internet.  Some are useful, others are simply myths.

I’m starting a new blog series that will be quick and factual tips on how to improve or maintain a good credit score.  They will be easy and to the point tips to introduce into your credit habits so that you can help yourself to a higher credit score.

 

Today’s Quick Tip:

Pay down your credit card balances.  Credit card balances can raise or lower your credit score significantly.  They control 165 points on the FICO scale.

It’s best to carry no more than 10% of your credit limit (example- $100 balance on a $1,000 limit) on your credit cards over a billing cycle.  Low credit card utilization conveys responsible credit usage.

 

If you have specific credit questions, feel free to contact me at my office to discuss and problem solve your credit issues.

Jason Hall

President and Certified Credit Expert

Direct- 949.505.9971

Mobile- 808.633.5023

Fax- 866.567.8054

WWW.RAPIDRESCORECREDIT.COM