Your road to financial recovery begins with a healthy credit report. A credit report contains detailed information on a person's credit history, including identifying information, credit accounts, loans, bankruptcies, late payments, and recent inquiries (credit card companies, dealerships, etc.). Prospective lenders use them with the borrower's permission to determine creditworthiness. Below are answers to the most basic questions we are often asked about credit and its effect on your life.
Most people are aware of the three credit reporting bureaus, Equifax, Experian and TransUnion. The average difference in scores between the highest and lowest of your credit scores, from the three bureaus, is 60 points. This is the result of the credit bureaus having different items on their report, which may be correct, incorrect or are not reported in full compliance with credit law. According to a recent study, nearly 80% of all credit reports have serious errors on them and this does not even include the even smaller errors for which we look.
Your credit score is a simple 3-digit number that is used by lenders, landlords, employers, and others to quickly judge your reliability of creditworthiness, fiscal responsibility, and overall character. A high credit score can help you lock in low APR rates or secure special deals on loans.
A low credit score may prevent you from securing loans and can damage your ability to buy a car, open a credit card, rent or buy a home. A history of inability to manage your credit successfully will make lenders uncomfortable trusting you with additional funds in the future.
Your credit score is determined by an algorithm developed by the Fair Issue Corporation (hence its other name of FICO score). Three corporations, called “credit bureaus,” specialize in collecting and reporting on financial histories. While the exact formula used to calculate your credit score is a tightly guarded industry secret, these companies provide general guidelines about financial behavior that can affect your credit score.
Credit scores range from 300-850. The higher your score is, the more likely you are to get a loan. The lower your score is, the less likely you are to get a loan. If you have a low credit score and you do manage to get approved for credit then your interest rate will be much higher than someone who had a good credit score and borrowed money. So, basically, having a high credit score can save many thousands of dollars over the life of your mortgage, auto loan, or credit card.
Yes, credit restoration is legal and we will help you to use the law in your favor. That law is called “The Fair Credit Reporting Act.” The FCRA gives you the right to dispute any item on your credit report. If that item cannot be verified within a reasonable time (usually 30 days) it must be removed. Studies have shown that 79% of all credit reports contain errors. This is nearly 8 out of 10 reports. Therefore most credit reports improve immediately.
For items disputed that are not errors, a creditor or furnisher is often unable to find the records or signed documents within the allotted time and the item must be removed. Sometimes the furnisher will say it has been verified but not offer proof. It is our job to prepare documents through our consulting attorney that challenge this and hold the credit bureaus and debt collection agencies accountable for violations of your consumer rights as a client of our firm.
Pay all of your bills on time, every time. A 30-day late payment can pull credit scores down by 60 to 110 points. This includes your utility bills, mortgage and auto payments, and all of your revolving lines of credit like credit cards.
Check your credit report at least once a year. You can find out how to challenge bad information on your credit report through us. Never charge more than 30% of the available balance on any of your credit cards. Banks like to see a nice record of on-time payments, and several credit cards that are not maxed-out. If you are carrying high balances on your credit cards, then make paying them down below 30% a priority.
Every point on your credit score matters! Credit repair offers benefits to anyone who would like to improve their score. The FICO scoring model goes as high as 850. We are aware of lenders that employ tiered interest rate pricing schedules which trigger rate differences up to a credit score of 780.
Buying a vehicle
Buying a home
Renting or leasing a home
Cable/Dish, & Internet Services
Electricity & Utility deposits
Credit Cards & Interest rates
Starting your own business
Most people are not aware how devastating credit inquiries can be to their credit score. When you are out “shopping” for rates for credit cards, mortgages, and loans, you need to know how the lenders are seeing your application. Every time your credit report is pulled by someone other than yourself, a “credit inquiry” will show up on your credit report for everyone to see. They stay on your credit report for 2 years!
If you have multiple credit inquiries, you will be penalized many points on your credit scores, therefore, the score that the lenders see will not be a true reflection of what your real credit should look like. These pesky credit inquiries are so annoying because it’s a slick way for the credit bureaus and lenders to control your options. Shouldn’t you have a choice of the loan rates and terms you like best? It’s an unfair system!
However, you don’t have to be a victim of it. You can have the credit inquiries removed from your credit report. A lender shouldn’t be able to limit you or control how many places you can shop for good rates and terms. It’s your right to get the best deal you can for you and your family.
DO use your credit cards. Many people who make mistakes with their credit believe that the best way to fix things is to never use credit again. If you are afraid that you cannot handle your credit cards correctly then the best policy is probably this one: Run only your utility bills on your credit cards each month and then pay the balance in full by the due date. You would have paid them in full anyway. This ensures that your utility bills get paid on time automatically, and as long as you keep the habit of paying off your credit card balance each month your score will continue to go up. Leave the credit cards locked in a safe or drawer at home so you’re not tempted to use them impulsively.
Keep your accounts open as long as possible – Even if you are no longer charging on the card. The best policy is to keep those unused accounts open, blow the dust off your card every few months by making a small purchase, then pay it off. How long each of your accounts has been active is a major factor in your credit score.
Most inquiries listed on one’s credit report will remain for two years. All inquiries must remain for a minimum of one year from the date the inquiry was made. Some inquiries, such as employment or pre-approved offers of credit, will show only on a personal credit report pulled by you.
Delinquencies (30- 180 days)
A delinquency may remain on file for seven years; from the date of the initial missed payment.
May remain seven years from the date of the initial missed payment that led to the collection (the original delinquency date). When a collection account is paid in full, it will be marked as a “paid collection” on the credit report.
When a delinquent account is sent to a collections company. This will remain for seven years from the date of the initial missed payment that led to the charge-off (the original delinquency date), even if payments are later made on the charged-off account.
Closed accounts are no longer available for further use and may or may not have a zero balance. Closed accounts with delinquencies remain for seven years from the date they are reported closed, whether closed by the creditor or by the consumer. However, the delinquency notation will be removed seven years after the delinquency occurred when pertaining to late payments. Positive closed accounts continue to be reported for ten years from the closing date.
Lost Credit Card
If there are no delinquencies, credit cards reported as lost will continue to be listed for two years from the date the creditor is contacted. Delinquent payments that occurred before the card was lost are reported for seven years.
Chapters 7, 11, and 12 will remain on one’s credit report for ten years from the filing date. A Chapter 13 bankruptcy is reported for seven years from the filing date. Accounts included in a bankruptcy will remain for seven years from the date reported as included in the bankruptcy.
City, County, State, and Federal Tax Liens
Unpaid tax liens remain for fifteen years from the filing date. A paid tax lien will remain on one’s score for 10 years from the date of payment.
Remain seven years from the date filed.
Medical information (unless you provide consent)
Notice of bankruptcy (Chapter 11) more than ten years old
Debts more than seven years old (including delinquent child support)
Age, marital status, or race (if requested from a current or prospective employer)
There is good news about the way the credit bureaus treat paid judgments. In many cases this represents a credit repair opportunity; in your case, it will result in the imminent removal of the judgment from your report. Once a judgment is paid the bureaus will cease reporting seven years after the original filing date. If the original filing date on your judgment was over six years ago, it will fall off your report soon.
Unpaid judgments, on the other hand, can literally linger forever. From a credit repair perspective, unpaid judgments must be dealt with in a different manner from the collections that appear in the body of your report, many of which may be bogus and can simply be disputed and removed. Per the Fair Credit Reporting Act, an unpaid judgment will report for 7 years from the filing date or the state statute of limitation (SOL), whichever is greater. If you look at your state SOL for judgments you will see that it is 20 years. And to make things worse, judgments can be renewed.
Please note that the SOL for judgments is not the same as the state SOL for debt. Once a defaulted debt has made it through the court system and has become a judgment it is in a new category, and these will appear in the public records section of your credit report. If you review the public records section of your report and find any unpaid collections that are beyond seven years from the filing date you have a credit repair opportunity. As soon as you pay them, they will no longer appear on your report.
We normally suggest to our credit repair clients that it is worth attempting to have our law firm negotiate these older judgments, rather than just paying them. We may need to contact the plaintiff. They may be receptive. Something is better than nothing, and if the judgment has been sitting there for long enough the plaintiff may be thrilled to get anything! If the dollar amount is significant, you may rely on the fact that the process of payment and recording will be handled properly.
Removing a bankruptcy from your credit reports is somewhat complicated because bankruptcy is a legal action which dismisses you in part or in whole from your debts. A Chapter 7 bankruptcy proceeding stays on your credit reports for 10 years. A Chapter 13 bankruptcy proceeding remains on your credit reports for 7 years. After you file bankruptcy to make sure all of your creditors and accounts which were included in the filing are listed on your credit reports as “included in bankruptcy.” If not, the creditors, late accounts, collection accounts and charge-off accounts will continue to be listed as due and owing and will severely lower your credit score.
Student loans deserve a little special attention in your credit repair effort. Student loans, unlike other forms of debt, have no statute of limitation for collection. If you have a defaulted student loan, now is the time to deal with it.
Prior to 1991 student loans could only be collected for six years. If you could hold out for six years you were in the clear. But in 1991 Congress passed an amendment to the Higher U.S. Department of Education Act which lifted all time limits for collection. And to further underline the importance they placed on student loan repayment, Congress made the amendment retroactive; accounts that were older than six years became collectible again.
How vulnerable are you? Well, if you have defaulted student loans you could have your wages garnished, your tax refunds seized, and your Social Security checks withheld. The widest-ranging collection powers have been granted to the U.S. Department of Education. Your student loans may be serviced by Sallie Mae, but Sallie Mae has the ability to turn over their challenging cases to the U.S. Department of Education to enforce collection.
This all sounds sort of grim, but there is some good news that can make student loan resolution a viable part of your credit repair process. In passing student loan legislation, Congress was very even-handed and provided two ways for borrowers to resolve their problems in an affordable manner. The two options which will instantly stop collection activity, allow you to reduce your payment, and even reinstate your right to borrow more money are called consolidation and rehabilitation.
With our assistance and legal guidance, our clients have had great success challenging inaccuracies such as bankruptcies, foreclosures, collections, charge-offs, repossessions, medical bills, credit card debt, inquiries, late payments, old addresses, judgments, tax liens and student loans.
Our process is extremely efficient. We start fast and keep up a consistent pace throughout your service level time frame. If you hire our law firm today, we should have your first round of dispute letters out within a week. Since the credit bureaus have 30 days to process disputes, you should see initial results from our challenges in as early as two to three months. On an ongoing basis, you should see results monthly, as updated by the bureaus.
Remember that this all takes TIME – Following the aforementioned steps consistently over a long period of time will increase your credit score and allow you to qualify for better loans and lower interest rates. Repairing your credit score does not happen overnight, so if you do these things for a few months and do not see a large increase in your score, do not give up. They are all habits that you will want to maintain throughout your life, as they will help you to keep your finances and lines of credit under control.
Our ability to help you delete questionable negative items is dependent on having up-to-date credit reports. Without copies of your current credit reports, we are somewhat limited in what we can do to progress a client’s case. We need to know the status of previously disputed items before crafting the next round of disputes.
For example, if we do not know that a questionable negative item has been deleted and we dispute the same item again, it can slow the process and increase the time until you see your desired results. In addition, if in response to a dispute the credit bureaus deny an investigation or request additional information, the law firm requires this response in order to craft the next round of challenges.
Just an increase of 20 points in your credit score can mean a difference of tens of thousands of dollars in interest saved on an average priced home and hundreds of dollars of interest saved on car payments and credit cards. We have a proven track record of helping clients to raise credit scores quickly and effectively to give you better purchasing power. We can provide proof of actual cases for viewing upon request.
We suggest that you both sign up, and we offer special couples pricing to encourage you to sign up at the same time. Both spouses or “significant others” must hire the law firm at the same time in order to get the discount. Please see our “Services” page for more information.
1. We will treat you as an individual. No two credit files are alike. We respond with customized solutions to your specific restoration needs.
2. We commit to help you resolve your credit issues as expeditiously as possible. Our extensive experience provides you with the quickest results possible.
3. We commit to timely, comprehensive responses to your question. Using a state of the art software systems allows you to track the progress of your file in real time. We will take the time to answer questions to your satisfaction.
4. We commit to being polite, patient and thorough. You may be feeling frustrated or hopeless about achieving your credit and financial goals. We promise to do whatever it takes within our means to resolve the issues and deliver the appropriate services or referrals.
5. We commit to providing you with top quality services at affordable pricing. Our pricing is structured to bring you the best possible services for your investment. Family discounts and a referral program are provided.