.
That’s where the credit score comes in to play. All consumers need to know some basic facts on credit.
The US has three major credit reporting agencies – Equifax (EFX), TransUnion (TU) and Experian (XPN). These bureaus collect and collate individuals’ personal financial data from financial institutions with which they have a relationship in order to determine a person’s credit risk. Each agency has its own way of determining a person’s credit score but the most common score used by lenders is the FICO Score (named after the Fair Isaac Corporation).
The FICO Score is a number based on a statistical analysis of a person’s credit report and is used to represent that person’s “creditworthiness,” or likelihood that the person will pay his or her debts.
Here is the breakdown of how different types of debt affect a person’s FICO Score.
Figure 1 www.fico.org
Consumers should focus most of their attention on how much they owe and how they pay. These two parts make up 65 percent of the credit score, and by paying down debt and paying on time, a person can dramatically increase his or her credit score.
Secondarily, individuals should hold onto the credit they’ve had the longest because length of credit makes up 15 percent of the credit score. If an individual has a credit card or a mortgage that shows a positive payment history, then that line of credit is more valuable than brand new credit lines.
The credit reporting agencies and credit card companies thrive on consumers’ ignorance. Understanding how debt relates to credit is the first step in achieving the best score possible.
Douglas Muir, CEO
The following are important terms to understand when discussing credit repair:
The Fair Credit Reporting Act (FCRA) – A federal law regulating how credit-reporting agencies use a person’s information. Enacted in 1970 and substantially amended in the late 1990s and again in 2003, the FCRA restricts who has access to an individual’s sensitive credit information and how that information can be used.
The Fair Debt Collection Practices Act (FDCPA) – A US statute added in 1978 that created guidelines under which debt collectors may conduct business. Defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations.
The Fair and Accurate Credit Transactions Act (FACTA) – An amendment to the FCRA that allows consumers to:
1. Request and obtain a free credit report once a year from each of the three nationwide consumer credit reporting companies.
2. Place alerts on their credit histories if identity theft is suspected.
3. Receive a Credit Disclosure Notice from mortgage lenders that includes a person’s credit scores, range of scores, credit bureaus, scoring models and other factors affecting his or her score.
These laws encourage consumers to look into their credit history and make sure the information is complete and accurate. The most important piece of legislature when it comes to credit repair is The Fair Credit Reporting Act.
This federal law requires that the three credit bureaus make reasonable efforts to ensure the information contained in their credit reports is accurate. There are six key provisions that ensure the consumers’ right to contest negative information listed on a credit report.
The first provision allows an individual to dispute information in his or her credit report to a credit bureau, and then that bureau must promptly investigate and verify the information.
Provisions two and three set maximum time limits in favor of the consumer. The credit bureaus have 30 days to complete an investigation into a disputed item, and if they cannot verify it, they must delete it. The results of any completed investigation must be sent to the consumer within five days.
The fourth provision allows consumers to further dispute negative items. If a consumer believes that evidence supporting his or her dispute of information was disregarded, the credit bureaus must contact the creditor directly. That means the company claiming a negative item on a consumer’s credit report must respond to that person’s challenge of information.
The fifth provision deals with deleted information. Once an entry in the credit report is deleted, the entry cannot be reinstated unless the creditor certifies that the information is complete and accurate.
Finally, the sixth provision allows for a Consumer Statement to be added to an individual’s credit report. If the consumer disputes the accuracy of certain information, and it is verified by the creditor as correct, then the credit bureaus must include the consumer’s explanation of the dispute. This gives the individual the chance to have his explanation for inaccuracy listed directly under the negative item.
The legal lesson above makes it very clear that any individual can contest information and clean up his credit history by himself. However, the process requires relentless follow-up and must be completed in a timely matter. That’s where CJS comes in. We can help consumers deal with the tedious aspects of disputing items on their credit reports, and on average, our clients see a credit score increase between 50 and 100 points within 75 days.
Douglas Muir, CEO
For example, if the credit repair company only sends out five letters a month, this process could take one to two years to increase the clients’ scores, resulting in nearly $2,000 in fees.
The other problem with the large Internet credit-repair companies is that The Fair Credit Reporting Act states that any third party sending out dispute letters on behalf of its client can be considered frivolous and therefore discarded by the credit bureaus. The Internet companies do not have their clients send the letters, and instead they send the letters for their clients. Due to the FCRA law, the credit companies can just ignore the letters.
The law further states that if a consumer disputes the accuracy of his credit report it must be investigated or deleted within 30 days. If the repair company is sending out letters on its client’s behalf, and the credit bureaus can ignore claims made by third parties, then the repair companies’ attempts most likely will not be successful. What good does that do the consumer?
That is why consumers need a company like Credit Justice Services (CJS). Employees at CJS help consumers fight negative information in a timely and direct manner.
The reason CJS has a high success rate is because it’s open and transparent about the credit repair process. It provides clients with a clear-cut timeline, which ensures the consumer isn’t wasting time or money.
CJS is also successful because it has a detailed and proven process for disputing the negative items. By having our clients review and sign each letter, we can make certain that the credit bureaus take disputes seriously. It our proven approach that has helped more than 18,000 people since 2004.
Douglas Muir, CEO
• Banks
• Mortgage lenders
• Credit card issuers
• Auto insurance companies
• Homeowners insurance companies
• Landlords
Individuals should assume that anyone who asks for a social security number may be checking their credit score. And a superior score equals better terms on mortgages, credit card interest rates and insurance fees. A credit score can also affect whether or not an individual is able to rent an apartment.
A few points can be the difference between a good rating and an excellent rating. Knowing where a person stands on the credit score guidelines will help him figure out how to get where he wants to be.
The higher the score the better rating an individual will receive. That translates into smaller monthly payments with better long-term interest rates.
Savings Example
For example, on a $300,000, 30-year, fixed-rate mortgage:
If your FICO score is Your interest rate is ...and your monthly payment is
Actual National Interest Rates - Updated as of July 29, 2008
760 - 850 6.223% $1,842
700 - 759 6.445% $1,885
660 – 699 6.729% $1,942
620 – 659 7.539% $2,106
580 – 619 9.451% $2,512
500 – 579 10.310% $2,702
As seen in this example, a person with a FICO score of 760 or better will pay $264 less per month for a $300,000, 30-year, fixed-rate mortgage than a person with a FICO score of 620 – that’s a savings of $3,168 per year. (www.fico.org)
It is essential to improve a person’s credit score if it’s low, and just as important to keep it high when it’s good. An individual should know his or her score and have a plan to protect and increase it. Using CJS can make that process simple and effective.
Douglas Muir, CEO
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Aug 2008
Credit Crisis in the United States
Turn on the television. Surf the Internet. Glance at a newspaper. Chat with friends at a coffee shop. No matter where you go or what you do, you can’t get away from hearing about the credit crisis going on in the United States. Homeowners with adjustable rate mortgages face tough times when the arm drops and rates soar. Americans looking for general financing for a new home, car or credit card are running into a tight loan market.
by valeria on Mon Aug 04, 2008 12:39 pm
That’s where the credit score comes in to play. All consumers need to know some basic facts on credit.
The US has three major credit reporting agencies – Equifax (EFX), TransUnion (TU) and Experian (XPN). These bureaus collect and collate individuals’ personal financial data from financial institutions with which they have a relationship in order to determine a person’s credit risk. Each agency has its own way of determining a person’s credit score but the most common score used by lenders is the FICO Score (named after the Fair Isaac Corporation).
The FICO Score is a number based on a statistical analysis of a person’s credit report and is used to represent that person’s “creditworthiness,” or likelihood that the person will pay his or her debts.
Here is the breakdown of how different types of debt affect a person’s FICO Score.
Figure 1 www.fico.org
Consumers should focus most of their attention on how much they owe and how they pay. These two parts make up 65 percent of the credit score, and by paying down debt and paying on time, a person can dramatically increase his or her credit score.
Secondarily, individuals should hold onto the credit they’ve had the longest because length of credit makes up 15 percent of the credit score. If an individual has a credit card or a mortgage that shows a positive payment history, then that line of credit is more valuable than brand new credit lines.
The credit reporting agencies and credit card companies thrive on consumers’ ignorance. Understanding how debt relates to credit is the first step in achieving the best score possible.
Douglas Muir, CEO
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Understanding the laws that govern credit repair
About 20 years ago, there was a substantial increase in consumer complaints regarding credit reporting accuracy, and the credit agencies’ failure to respond. Individual states and the Federal Trade Commission took action against the three major bureaus to stop them from further violating the Fair Credit Reporting Act’s requirement that they maintain reasonable procedures to ensure “maximum possible accuracy” of credit reports.
by valeria on Mon Aug 11, 2008 12:05 pm
The following are important terms to understand when discussing credit repair:
The Fair Credit Reporting Act (FCRA) – A federal law regulating how credit-reporting agencies use a person’s information. Enacted in 1970 and substantially amended in the late 1990s and again in 2003, the FCRA restricts who has access to an individual’s sensitive credit information and how that information can be used.
The Fair Debt Collection Practices Act (FDCPA) – A US statute added in 1978 that created guidelines under which debt collectors may conduct business. Defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations.
The Fair and Accurate Credit Transactions Act (FACTA) – An amendment to the FCRA that allows consumers to:
1. Request and obtain a free credit report once a year from each of the three nationwide consumer credit reporting companies.
2. Place alerts on their credit histories if identity theft is suspected.
3. Receive a Credit Disclosure Notice from mortgage lenders that includes a person’s credit scores, range of scores, credit bureaus, scoring models and other factors affecting his or her score.
These laws encourage consumers to look into their credit history and make sure the information is complete and accurate. The most important piece of legislature when it comes to credit repair is The Fair Credit Reporting Act.
This federal law requires that the three credit bureaus make reasonable efforts to ensure the information contained in their credit reports is accurate. There are six key provisions that ensure the consumers’ right to contest negative information listed on a credit report.
The first provision allows an individual to dispute information in his or her credit report to a credit bureau, and then that bureau must promptly investigate and verify the information.
Provisions two and three set maximum time limits in favor of the consumer. The credit bureaus have 30 days to complete an investigation into a disputed item, and if they cannot verify it, they must delete it. The results of any completed investigation must be sent to the consumer within five days.
The fourth provision allows consumers to further dispute negative items. If a consumer believes that evidence supporting his or her dispute of information was disregarded, the credit bureaus must contact the creditor directly. That means the company claiming a negative item on a consumer’s credit report must respond to that person’s challenge of information.
The fifth provision deals with deleted information. Once an entry in the credit report is deleted, the entry cannot be reinstated unless the creditor certifies that the information is complete and accurate.
Finally, the sixth provision allows for a Consumer Statement to be added to an individual’s credit report. If the consumer disputes the accuracy of certain information, and it is verified by the creditor as correct, then the credit bureaus must include the consumer’s explanation of the dispute. This gives the individual the chance to have his explanation for inaccuracy listed directly under the negative item.
The legal lesson above makes it very clear that any individual can contest information and clean up his credit history by himself. However, the process requires relentless follow-up and must be completed in a timely matter. That’s where CJS comes in. We can help consumers deal with the tedious aspects of disputing items on their credit reports, and on average, our clients see a credit score increase between 50 and 100 points within 75 days.
Douglas Muir, CEO
Knowing the difference between good and bad repair companies
Over the years, the credit repair industry has come under a negative light. Many companies that promise to improve their clients’ credit have charged exorbitant fees and delivered few results. Internet-based repair companies usually charge clients $79.95 a month without ensuring a specific end date, and it is in their interest to extend the credit repair process. This ends up costing the consumer a lot of money and taking months and months to complete.
by valeria on Mon Aug 18, 2008 11:30 am
For example, if the credit repair company only sends out five letters a month, this process could take one to two years to increase the clients’ scores, resulting in nearly $2,000 in fees.
The other problem with the large Internet credit-repair companies is that The Fair Credit Reporting Act states that any third party sending out dispute letters on behalf of its client can be considered frivolous and therefore discarded by the credit bureaus. The Internet companies do not have their clients send the letters, and instead they send the letters for their clients. Due to the FCRA law, the credit companies can just ignore the letters.
The law further states that if a consumer disputes the accuracy of his credit report it must be investigated or deleted within 30 days. If the repair company is sending out letters on its client’s behalf, and the credit bureaus can ignore claims made by third parties, then the repair companies’ attempts most likely will not be successful. What good does that do the consumer?
That is why consumers need a company like Credit Justice Services (CJS). Employees at CJS help consumers fight negative information in a timely and direct manner.
The reason CJS has a high success rate is because it’s open and transparent about the credit repair process. It provides clients with a clear-cut timeline, which ensures the consumer isn’t wasting time or money.
CJS is also successful because it has a detailed and proven process for disputing the negative items. By having our clients review and sign each letter, we can make certain that the credit bureaus take disputes seriously. It our proven approach that has helped more than 18,000 people since 2004.
Douglas Muir, CEO
Who looks at your credit scores
Most consumers know they need a good credit score to get competitive financing. But many people aren’t aware of all the companies that look at their credit scores. So who looks at them?
by valeria on Mon Aug 25, 2008 1:18 pm
• Banks
• Mortgage lenders
• Credit card issuers
• Auto insurance companies
• Homeowners insurance companies
• Landlords
Individuals should assume that anyone who asks for a social security number may be checking their credit score. And a superior score equals better terms on mortgages, credit card interest rates and insurance fees. A credit score can also affect whether or not an individual is able to rent an apartment.
A few points can be the difference between a good rating and an excellent rating. Knowing where a person stands on the credit score guidelines will help him figure out how to get where he wants to be.
The higher the score the better rating an individual will receive. That translates into smaller monthly payments with better long-term interest rates.
Savings Example
For example, on a $300,000, 30-year, fixed-rate mortgage:
If your FICO score is Your interest rate is ...and your monthly payment is
Actual National Interest Rates - Updated as of July 29, 2008
760 - 850 6.223% $1,842
700 - 759 6.445% $1,885
660 – 699 6.729% $1,942
620 – 659 7.539% $2,106
580 – 619 9.451% $2,512
500 – 579 10.310% $2,702
As seen in this example, a person with a FICO score of 760 or better will pay $264 less per month for a $300,000, 30-year, fixed-rate mortgage than a person with a FICO score of 620 – that’s a savings of $3,168 per year. (www.fico.org)
It is essential to improve a person’s credit score if it’s low, and just as important to keep it high when it’s good. An individual should know his or her score and have a plan to protect and increase it. Using CJS can make that process simple and effective.
Douglas Muir, CEO
