how to dispute credit report

How to Dispute Your Credit Report

How to Dispute Your Credit Report

Learning how to dispute your credit report can be a confusing and complicated thing to do. The following are some practical steps for you to take to navigate your way through a financial check-up.

Why Should You Check Your Credit Report

It’s quite common for errors to appear in your credit report, which is why it’s also common to dispute your credit report. These errors may not be insignificant. They may be important ones that can have a powerful impact on your future. The fact of the matter is that you could be missing out on a lot when you’re not looking at your credit report. Check out some important statistics and facts below:

  • 35% of Americans have never checked their credit report
  • A 2012 Federal Trade Commission (FTC) report found one in four Americans found at least one potentially important error in at least one of their credit reports
  • Errors on your credit report may affect if you can take out a loan
  • They may affect how much you will have to pay money to get that loan
  • Ensure the information on your credit report is correct, complete, and updated before applying for a loan for a large purchase e.g. home mortgage, car loan, buy insurance, or applying for a job
  • To prevent identity theft

Now is the time to act. Plan now for your future, especially if you’re thinking about doing any of the following things above. You never know what’s going to happen. And you may not know what you’re going to want.

How To Spot An Error

An error is information on your credit report that shouldn’t be there. This might be due to the fact that the information is not yours, is wrongly reported, or it’s against the law to be listed. Common credit report errors include errors in personal information, accounts, and/or derogatory marks.

Personal Information Errors

  • Wrong name listed
  • Addresses you’ve never lived at or used as a mailing address
  • Inaccurate employer information

Account-Related Errors

  • A late payment that’s more than seven years old
  • Having a credit card or loan account listed that’s not yours (or that you’re not a co-signer or an authorized user on)
  • An account that was closed by you, but shows as being closed by the provider

Derogatory Mark Errors

  • A paid-off collections account that still shows as being unpaid
  • A paid tax liens that is more than seven years past the date of payment
  • An account that was discharged in bankruptcy is still showing up as active with a balance (account history can still be reported)

How to Obtain Your Free Credit Report

The Fair Credit Reporting Act (FCRA) requires the three nationwide companies to provide you a free credit report. Equifax, TransUnion, and Experian must, upon request from you, give you a free report once every 12 months. They must provide a website, telephone number (toll-free), and mailing address. You can use any of these 3 methods to obtain your free credit report.

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

You don’t need to request your free credit report from the three nationwide credit reporting companies separately. In fact, you ask to get the credit report from the 3 credit reporting companies simultaneously.

Other Reasons for Getting a Free Credit Report

There are other situations where you’re entitled to a free report. You can get a free credit report if a company takes negative action against you by denying your application for insurance, employment, or for credit.

You can also get a free credit report for the following other reasons:

  • You’re unemployed and are planning to look for a job within the next 60 days
  • You’re on welfare
  • Your credit report is inaccurate due to fraud (e.g. identity theft)

Buying Your Credit Report

If you need a credit report for not any of the reasons above, it might cost you to buy another copy of your report within 12-month period. Contact the three credit reporting companies to a purchase your credit report:

Fixing Credit Report Errors

You want to get into touch with both the credit bureau and the organization that gave the information to the bureau. Under the FCRA, both of these parties are responsible for ensuring that there isn’t wrong or missing information in your credit report.

Credit Bureau

Unless the credit bureau thinks your dispute is frivolous, they must look into the item(s) in question typically within 30 days. Include copies of the documents that will help your case. The letter should include the following:

  • Your full name
  • Your up-to-date address
  • Clearly show each item you are disputing in the credit report
  • List all of the facts along with an explanation for why it supports your dispute
  • Request a deletion or correction
  • Include a copy of your report
  • Circle items you’re disputing
  • Use a sample letter such as this one

You should keep copies of your disputed letter and enclosures. Use certified mail to send your letter, along with a return receipt requested. This way you can keep a record that the credit bureau received your correspondence.

Appropriate creditor or information provider

You also want to write to the appropriate creditor or information provider. Explain that you are disputing the information provided to the bureau.

  • Include copies of documents that support your position
  • Request that the provider copy you on correspondence they send to the bureau

This process may take between 30 and 90 days. Remember that if the provider again reports the same information to a bureau, it must include a notice of your dispute.

Conclusion

Sometimes, disputing incorrect information on your credit report may be one of the fastest ways in making a positive impact on your credit score. At the end of the day, it’s really important to dispute wrong information on your credit report because it may have a huge effect on your financial future. Therefore, learning how to dispute your credit report is important to know.

new years resolutions

How To Improve Your Credit Score In 2017

How To Improve Your Credit Score In 2017

The New Year is a great time to set new goals, and it gives people the fresh start they need to make the changes they desire. At the beginning of each year, around two-thirds of Americans vow to make their lives better by having a New Year’s resolution. Out of those two-thirds, only 8% achieve their goals. Improving credit scores and getting out of debt is among the most popular resolutions each year. With so many people desiring to improve their credit scores, why do most fail? The answer is that most goals fail without having a concrete plan in place. If improving your credit and getting out of debt is one of your resolutions this year, having a roadmap ensures you will improve your credit score in 2017.

A credit report is simply a compilation of information obtained from lenders that an individual has used. The information in a credit report determines your credit worthiness as a borrower. In a nutshell, a credit report is a measuring tool to analyze how a person manages debt and their likelihood of repaying a loan. A credit report also depicts a person’s spending behaviors. Debt to income ratios could indicate if a person is spending more than their ability to pay.

Credit affects many important areas in life. Everything costs more with poor credit scores, which often makes it even harder to improve your credit score. While resolving to improve your credit score may not be the most glamorous New Year’s resolution, it may be one of the most important. The financial freedom and self-discipline that comes from seriously improving your credit score will be an investment you cannot afford not to make. Here are the steps to keep your resolution and improve your credit score this year.

1. Take an honest assessment of your credit

The first step in improving a credit score is to know exactly what needs improvement. In order to make an effective get out of debt plan, take some time to understand your current credit situation. Set aside a day and time that you can truly delve into your finances to create a plan.

A crucial part of improving your credit score is being honest with yourself. One of the most overlooked steps in improving credit is understanding your own behavior with money and debt. Use credit card statements and bank statements to track spending habits. Did an emergency arise that caused you to max out a credit card? Maybe an unexpected car repair, loss of income, medical situation, or natural disaster forced you to use credit cards more than you would have liked. Perhaps impulsive spending led you to high credit card balances. However you ended up with credit card debt, it is wise to learn from it, so you could plan for the future. Having a savings account to handle life’s emergencies can protect your credit score and your wallet.

Credit card debt does not always signify a money issue. It’s often a behavioral issue. Changing behaviors and relationship with money will not just propel you to improve your credit score, it ensure that bad habits will not surface again once your credit goals have been met.

2. Clean up your credit report

According to the FTC, millions of people have errors on their credit reports that can result in a lower score. Carefully check your credit report to ensure all information is being reported accurately. Once a year, you can obtain a free copy of your credit report from all three credit bureaus. If you suspect fraud, inaccurate information, or need to update your personal information, you can contact the credit bureaus individually to find out their dispute process.

To find out where to obtain a free copy of your credit report, check out our blog post on how to get your credit report and credit score for free.

Professional credit repair companies can help you clean up your credit report. However, it’s important to choose the right one, since many credit repair companies are ineffective scams.

3. Understand how credit scores are calculated

Many people have lower credit scores because they do not understand how it is calculated. Depending on your situation, aiming to eliminate all credit card debt may not be possible in one year. Around 30% of your credit score stems from credit card balances. Aim to reduce the debt to income ratio by paying off 20% or more of credit card balances.

Another credit score buster is applying for too much credit in a short period. Apply for credit only if it is absolutely necessary. 10% of a credit score is calculated by the number of hard inquiries. Another 15% of a credit score is determined by the age of the accounts. Having too many new accounts or inquiries could put a significant dent in your score, so avoid opening new lines of credit if possible.

4. Change spending habits

Knowing how to allocate your income will be a beneficial asset during this process. Is there something you can sacrifice to get to your credit goals faster? Maybe skipping your daily latte for a short period or avoiding take out lunches will speed up the process of paying off a credit card or increasing your emergency fund. It is wise to be mindful of how money is spent. Small purchases here or there may seem fine, but they eventually add up quickly. Look for ways to be smarter about money and use the savings to improve your financial health.

5. Be responsible with the credit you already have

To successfully improve your credit score this year, you will have to take care of the credit you already have. Establishing a history of paying bills on time will be viewed favorably and will have positive impacts on your credit score. If paying bills on time has been a struggle in the previous year, commit to paying bills on time this year. It is vital that all payments are made on time, every time. A late or missed payment can stay on your credit report for up to seven years. A person with an excellent score could potentially lose around 90 points because of a missed or late payment.

If you think you will be late with paying your bill, do not wait until the last minute to contact the lender. Contact the creditors right away and set up alternative payment arrangements. Most creditors and banks have automated payment options available to make paying bills on time easier.

6. Adjust expectations and work hard

While “improving credit” and “getting out of debt” are some of the most cited New Year’s resolutions, they are often the ones people break the quickest. Like many resolutions, improving credit scores takes hard work, patience, and a change in behavior. These things normally do not happen overnight. Create a realistic budget and stick to it. This will keep track of bills and spending habits. Wallethub.com suggests breaking credit goals down into smaller goals to maximize your ability to follow through with your plan. For example, setting a deadline to order credit report, increase emergency funds, and create a budget could be mini-goals that pushes you closer to your ultimate goal.

Concluding Thoughts

Everyone could benefit from analyzing their credit reports and spending habits. Surprisingly, the most effective way to improve a credit score is to change your mind set about credit and money. By understanding your previous credit pitfalls, you can work hard at eliminating them. A healthy relationship with money, hard work, and perseverance will eventually translate to excellent credit. This year, resolve to investing in yourself by improving your credit score.

skyrocket

10 Credit Utilization Tips To Skyrocket Your Credit Score

10 Credit Utilization Tips To Skyrocket Your Credit Score

Here’s the gist of it: how much available credit you’re using becomes one of the most important factors, second only to making timely payments. Meet the credit utilization ratio. Simply put, it’s the amount of credit you’re using in comparison to your credit limit. If you have a credit limit of a $5,000, and you have a balance of $2,500 on your card, your credit utilization ratio would be 50% (which would be way too high to be good for your credit score, according to most experts). In fact, most would agree that having a balance of over 30% can damage your credit. Lower your credit utilization ratio and kick your credit score out the park with these 10 steps.

1. Welcome to the Credit Score Bureau

Understand how the credit score system works. Essentially, each month, your balance is sent to the 3 major credit bureaus by your credit issuer. This data then pops up in your credit report. When the new credit card balance comes in, it replaces information from the previous month.

2. Say When

Understanding credit score bureaus takes us to the next step: find out when your card issuer actually reports to the credit bureau. The date they report this balance doesn’t always coincide with when your bill is due. If the reporting date is a few days before your billing cycle, and you haven’t paid down the balance yet, you might look like you’re carrying a large balance. You can avoid this problem by calling your issuer’s customer service. Find out when they send the report, and simply pay the balance before that date every month.

3. Pay Not Once, But Twice Per Month

The trick here is to halve the time between each payment so that your credit utilization ratio is always below 30%. Set up an automatic twice-monthly payment to your card to make it easier. This’ll be a good alternative to the option above if it’s too much of a hassle remembering when the credit issuer sends the report, or if you simply don’t like calling customer service.

4. Raise the Roof

Ask for a credit line increase on your card. This is a different route you can do in terms of avoiding using 30% of your available credit. This is a great option if you’re not able to pay down your debt—just raise the ceiling. At the same time, remember that you want to continue to keep the balance low. Don’t go on a spending craze. As a word of warning, know that doing this may make you lost a few points in your credit. As long as you’re dutifully everything to keep up a good credit score though, you should be able to bounce back.

5. Just Do It

Sometimes the simplest choice is the smartest choice. The easiest thing you can do to lower your credit utilization ratio is to completely pay off your balance every month. It’s a quick, no-brainer, fool-proof solution. If you have the means, this is your best option.

6. Retail Credit Cards: Thank You But No Thank You

You want to avoid opening up that new Macy’s card, because retail store credit cards usually have very low ratios. This is due to the fact that they generally have low credit limits, and having one may encourage you to go on a shopping spree. One large shopping experience could shoot your credit utilization ratio over that bar of 30%. So give a big smile and politely decline that bright red card. 

7. Spread It Around, Baby

Instead of blowing up your credit utilization ratio on one card, why not use several cards and keep it low on each? The key thing to remember here is that credit bureaus may assess your utilization ratio based on individual cards AND their collective totals. So be careful to keep your ratio at 30% or less on each card in addition to the total. Also, if you don’t already have multiple accounts you can do this with, make sure not to open up too many new accounts in a short time span.

8. Check Yourself Before You Wreck Yourself

Make it a habit to always check your balance on your credit cards. You can’t fix or monitor your credit utilization without knowing what it is first. Then, make your move to pay up as soon as you are inching towards 30%. If you can’t make the payment, switch it up by using a different card for your purchases.

9. Hello, Mr. Robot

Technology can sometimes be your friend. If you’re having a hard time remembering to check your accounts online, set up balance alerts so that you get them through text message or email. This way, it’s almost guaranteed that you’ll see that 30% limit creeping up. One thing to remember is that it’s a good idea to set the alert so that it warns you at 20%. That way, you’ll have more time to pay your balance off before you hit that 30%.

10. Stop, Drop, and Roll

Setting an imaginary limit is a great way to improve your credit score. Ignore your actual credit limit and develop a discipline of responsible spending. Having a $4,000 doesn’t mean that you should buy a $4,000 suit. Keep a 30% limit and stick to it. Budgeting is another great way to follow this step. 

A Summary of the 10 Steps

  • Understand the process of how your credit scores are reported
  • Know when the credit card issuers reports your balance and pay before that reporting date
  • Pay 2 times a month instead of once to consistently keep that credit utilization ratio low
  • Raise the credit limit while maintaining the same balance
  • Just pay off your total balance
  • Avoid retail store credit cards
  • Spread your balance among several cards instead of one
  • Make it a habit to always look at your balance
  • Set up email and text alerts to remind you of upcoming credit card bills
  • Ignore your actual credit limit and come up with a credit limit in your mind that’s much lower

Conclusion

As you can see, there are a whole host of options in keeping down your credit utilization ratio. Choose which method is convenient and effective for you in keeping that balance low, thereby skyrocketing your credit score. When seeking credit repair, remember that coming up with an effective strategy means figuring out how that strategy fits your lifestyle. The FICO scoring model and its rival VantageScore ranks credit utilization ratio accounts for one third of your credit score. In other words, it’s really, really important that you look at how much you pay off, but how much is owed—because that’s what the credit bureaus look at.

creditcards-2

The Best Secured Cards of 2017 For Credit Repair And Credit Building

The Best Secured Cards of 2017 For Credit Repair And Credit Building

If you’re having trouble getting a credit card due to bad history or no history, getting a secured card may be the solution for you. The “secure” in a secured card means that you have to put down a deposit which the bank will use as security just in case you can’t make the payments. But alas, not all cards the same. Here are some of the best secured cards for getting started building credit or for credit repair.

1. Capital One® Secured MasterCard®

cap1card

Pros

  • No annual fee
  • No foreign transaction fee
  • Reports to the three major credit bureaus
  • Get a $200 limit that’s higher than your deposit of $49, $99, $200 depending on your credit
  • 80 days to make partial payments to your deposit. Your account, however, will not be activated until the deposit is fully paid
  • Get access to a higher credit line without an additional deposit after you make your first 5 monthly payments
  • Manage your account 24/7 by phone, online access or through their app

Cons

  • High 24.99% Variable APR
  • You need a checking or savings account
  • You cannot have a discharged bankruptcy and your rent cannot be almost high as your income (this is generally the case with all credit cards)
  • No rewards

Verdict

This is definitely a great card if you don’t want to spend a lot of money upfront on your deposit.

Online Customer Reviews

The card seems to really work for first-time credit builders and those who are trying to fix their credit. Many customers praise the Capital One® Secured MasterCard® for giving you the ability to easily check your balance. There’s also a credit tracker option which helps you easily monitor and improve your credit score. Most people use it for emergencies and very low purchases. People do complain about the high APR. Vigilance and steadfastness is required in paying on time. Great card to get for those who have been rejected by other companies.

2. OpenSky® Secured Visa® Credit Card

open-sky

Pros

  • Qualify with bad or no credit
  • Qualify within minutes
  • No checking account or credit check required
  • The card reports to the three major credit bureaus

Cons

  • Has an annual fee of $35
  • No rewards
  • You generally can’t upgrade to a unsecured card

Verdict

This is the best secured card for someone who has bad credit or no checking account.

Online Customer Reviews

Many customers complain that they can’t upgrade to an unsecured card. As a result, they use it mainly to build credit and then end up getting an unsecured card with a different card company. Customer service also seems to be a problem. Customers complain that payments take a while to post, so they need to pay well in advance of the due date. Overall, it’s still a great option for people who have been rejected by other card companies. It’s still one of the best secured cards because even for customers who have complaints, they were able to actually fix their credit score or start building credit.

3. Discover it® Secured Card

discover-it

Pros

  • No annual fees
  • Cash back on every purchase. Rewards never expire. Earn 2% on all gas and restaurant purchases up to $1,000 per quarter. Earn 1% cash back on all other purchases.
  • Get your FICO score for free with your monthly statements and online
  • Qualify even if you’ve filed for Chapter 7 bankruptcy
  • After 7 months, Discover will do reviews of your account, and you have the chance to upgrade to an unsecured, standard credit card. You can have your deposit refunded and even get a higher credit limit
  • No penalty APR for paying late, and no late fee for missing for your first due date

Cons

  • 23.49% variable APR
  • Deposit equal to the credit limit. A security deposit of $200 or more is required

Verdict

It has great rewards for an unsecured card. Just make sure to pay off your bills in full to avoid the steep APR interest.

Online Customer Reviews

Many customers actually get upgraded to an unsecured card in addition to getting their deposit back. And many seem to do so quicker than they expected. Just make sure to never make a late payment. Users like the ability to quickly increase their credit scores. It takes about two weeks to receive your card. You can also get a Discover iPhone App for easy access.

A Comparison of Benefits

Which of the best secured cards is best for me?

Which one is the easiest to apply to?

The OpenSky® Secured Visa® does not apply a hard credit check, so you won’t lost points on your record. On top of that, you’re able to qualify in a manner of minutes. 

Which one has the cheapest deposit?

This may be a stickler for many people because chances are if you’re struggling with building or fixing your credit, you may be low on cash. On secure credit cards, many have a deposit requirement of $200 which may be too much for some people. So, if you’re looking for a low deposit, Capital One® Secured MasterCard® may be a good choice for you.

Which card offers a rewards program?

Because most secured cards focus on getting customers to build up their credit, rewards usually aren’t offered. This is what makes the Discover it® Secured Card one of the best secured cards. Its ability to earn you 2% cash back on all gas and restaurant purchases and 1% cash back on all other purchases may very well make it one of a kind.

Which card allows you to upgrade to an unsecured card?

Due to the no-frills, low credit limit nature of secured cards, many users eventually wander to other cards which offer better options. However, instead of applying for another card with a different company, the Discover it® Secured Card allows you to upgrade to a unsecured card with a returned deposit and a higher credit limit.

Which card allows you to not have a checking account?

Having a checking account may not be an option for some people. For this reason, the OpenSky® Secured Visa® Credit Card may work well for you. Although you may not need a checking account for opening an account, you probably need one to make payments.

Which card has the lowest annual fees?

Many users don’t like the annual fee because if you add up the interest rate and paying down the balance, the money really adds up. Plus, if you’re not really using your card, you may forget that you even have one. Both the Discover it® Secured Card and Capital One® Secured MasterCard® have no annual fees.

Which card has the lowest interest rates?

Among the three secured credit cards, the OpenSky® Secured Visa® has the lowest purchase APR of 17.64% Variable. However, they do have a penalty APR of up to 21.75% variable and a cash advance of 17.64% APR variable.

not-to-do

What NOT To Do To Increase Your Credit Score

What NOT to Do To Increase Your Credit Score

A bad credit record can cause multiple problems. With a low credit rating, you diminish your chances of being approved for new credit or loans. If you are approved, you are liable to face extremely high interest rates.

A bad credit history can also prevent you from being approved for a cell phone contract or from renting an apartment; there are also some jobs that require you to have a good credit record. The good news is that you can improve your credit rating, but it is going to be a slow and tedious process. There is a strategy to credit repair, and if you take incorrect actions, you can actually lower your credit score. Here are some tips on what NOT to do when trying to repair your credit history.

1. Apply for Multiple Accounts

Despite the fact that new credit plays an important role in keeping your account active, applying for too many accounts, particularly in a short time span, can affect you negatively. Every credit application made places a hard inquiry on your file, and having multiple hard inquiries can lower your score from this risky behavior.

2. Co-sign a Loan

Unless this is your son or daughter, or other close family member, and you are okay with potentially ruining your credit score for their benefit, do not become a co-signer. Even if you are confident that the individual will be able to make payments on a loan agreement, it is best to refrain from becoming a co-signer. When you vouch for someone else’s loan, the following occurs:

  • Their account is placed on your credit file.
  • In certain instances, it increases your credit utilization ratio.
  • If the individual is unable to pay, you will have to take responsibility for the debt.
  • If no payment is made, your credit will suffer.

Improving your credit is and should be an individual process; you can reduce the risk of further damaging your account by simply saying “NO.”

The bottom line is this. Repairing your credit can prove very challenging; the amount of time that it takes for you to recover is dependent upon the severity of the damage. However, you shouldn’t allow your current situation to have a negative effect on your long term future. Ensure your financial security by taking a proactive position.

3. Maximize your Credit Limit

When you max out your credit, your credit utilization ratio is affected. In fact, you don’t want your credit utilization ratio to be anywhere near 100%. If your ratio is high, it implies that you are a risk, and this will have a negative effect on your credit score.

To be safe, you should aim for a 25% or lower ratio. For example if your credit card limit is $5,000, make sure that you keep a balance of $1,250 or less.

4. Close your Old Accounts

Age is a virtue in the credit scoring world. While you may think that it makes sense to close any accounts that you are not using, this can actually damage your credit score as it will increase your credit utilization ratio.

For example, you might have two credit card accounts and both of them have a $10,000 limit. You don’t use one of the cards and it has a zero balance. The other card has a balance of $3,200. Since you don’t use the card with the zero balance, you choose to close the account meaning that you lose $10,000 in available credit which will raise your utilization score from 16% to 32%. This spike in your credit utilization will lead to a lower credit score. Keep your accounts current and active to assist in improving your credit score.

5. Spend without a Budget

Credit repair begins with budgeting! By creating a budget you are able to identify:

  • Saving and spending habits
  • Your overall progress
  • Areas that need to be improved

The above three points can hurt or help your credit depending on how they are monitored. In order to create an effective budget, you will need to keep track of your monthly expenses. Check out our guide on how to budget effectively.

6. Ignore your Credit Report

A study conducted by the Federal Trade Commission discovered that one out of five consumers had at least one inaccuracy on their credit reports. Even the smallest mistake can have a negative effect on your credit score.

People who know their FICO scores are at an advantage when it comes to obtaining the best credit terms for them. Rather than searching for ways on how to fix your credit report, take an active role and review your credit score on a regular basis.

7. Miss Payments

When you are trying to rebuild your credit, missing a payment is going to have a negative effect on your credit score, and when you are in the rebuilding stage you can’t afford to have such blemishes on your record.

If you can’t afford to pay off the full balance, make sure that you at least make the minimum payment. If you are unable to make a payment at all, call your creditor to make alternative arrangements. Your credit card company would prefer to make an affordable payment plan with you than mark your debt as uncollectable.

Try and Find a Quick Credit Repair Fix

Debt is like being overweight: you didn’t gain it over a short period of time and you won’t lose it over a short period of time. There are several companies offering a quick fix. Don’t fall for it! Ask yourself this simple question: “What can they do to improve your credit rating that you can’t do for yourself?”

On the other hand, if you do hire a credit repair company to assist you and they fail to deliver what they have promised, you can sue them. Legally, such companies are not permitted to charge you any fees until they have been successful in their claims. If you have made an advance payment and been cheated out of your money, you are permitted to sue them in federal court. You can either take this action alone or join with others to form a class action lawsuit. However, it’s best to prevent it from ever getting to that state. View our top reviewed credit repair companies here.

Final thoughts

While it is essential to avoid the above information when rebuilding your credit, the worst thing that you can do is to leave your credit as it is. Rebuilding your credit history is not an easy assignment, but don’t give up. Stick to your goal, be disciplined and allow positive momentum to assist you on your quest towards excellent credit.