Everything You Need to Know to Repair Your Own Credit!

I am going to teach you how to fix your credit. I am not going to share everything that I know with you about credit scoring models or algorithms but I am going to share the process with you. I am doing this because I want you to know what you are doing when you go about fixing your credit. If you have bad credit and are a DIY type of person this article is for you. I am going to cover everything in this article from A to Z.

The first thing that you need to do is review your credit for inconsistencies. A full 79% of credit reports have one error or another. Cases of mistaken or stolen identity, same or similar names reporting on the wrong report, incorrect amounts, duplicate accounts, and many other forms of errors being reported on credit profiles abound. Go over your credit report very carefully looking for inconsistencies such as those listed above.

Once you have identified the errors that you want to correct it is time to move on to the next step. You will want to dispute those items with the three major credit bureaus. Write a letter you each of the three credit bureaus explaining to them what you believe the error is and request that they delete the item being reported in error from your credit report. Proper formatting is an important ingredient in order to ensure that your dispute is handled properly. The credit bureaus are going to want to make sure you are who you say you are. For that reason you must always submit your dispute letters with a copy of your driver’s license and a bill with your address on it (such as a utility bill). If you have recently moved they may want to see additional verification so include a pay-stub, social security card, or W2 form.

There is no guarantee that disputing an item with bring about a removal of that item from your credit profile. If the item is genuinely being reported in error there is a high likelihood that it will be deleted. Creditors have 30 days to validate an account that has been disputed otherwise it is automatically deleted. If an item is validated but you are certain that it is being reported in error you can challenge the validation. That process begins with first requesting the documentation from the credit bureaus that the creditor used to validate the account. A good example would be if an amount is being reported incorrectly. Such as if you paid off an account but it is still reflecting an amount owed. In that case, obtain dated proof of your release from the debt obligation to compare to the documentation used for validation, which may show that the validation is dated.

If you are unable to have an item deleted through the dispute process there is a good chance the collection agency or creditor may be more pliable and willing to negotiate after an item has been disputed, validation challenged, or is currently in dispute. As a last resort you may want to attempt to negotiate a settlement with the creditor; this is only if you are unable to have the item removed through any other means. However, there are a few ground rules here that you need to take into consideration. Again, if you are certain that the item is being reported incorrectly or is not yours all together; do not acknowledge the debt as being yours.

The first thing that you should ask for when the creditor answers the phone is for the agent to come back on an unrecorded line. You have the right to speak on an unrecorded line and generally the agent will be happy to oblige. He or she will put you on a brief hold and come back on a line that is not being recorded. Once they are back on the line with you tell them that you are calling about account # (fill in account number). If you do acknowledge ownership of the debt, that could restart the statute of limitations back to 0 days since last date of activity. It is important not to make that acknowledgement in the event that you are unable to reach an agreement. It is not uncommon to get the settlement down to around 40% or 40 cents on the dollar. Collections and profit & loss statements come off on their own seven years from last activity while items discharged in bankruptcy come off in 10 years.

Cleaning bad credit from your credit profile is the first step in establishing repairing your credit. The next step is to re-establish credit. Sometimes when you make a lot of changes to your credit profile in a short period of time you may see a dip in your credit score in the first month after. The reason for this is because while you are deleting derogatory items you are also deleting transaction history. This is normal and it will rebound in the subsequent month so long as you have established some new trade-lines (credit account).

Those with perfect credit have multiple seasoned trade-lines varying in type. Usually a couple of revolving account, an installment loan or two, and an amortized loan such as a mortgage. The more seasoned a trade-line is the more weighted it will be on your credit report. If you have the option of having a friend or relative add you as an authorized user on a seasoned trade-line that will accelerate the time-frame in which you are able to increase your credit score. However, with a clean slate you should still be able to significantly increase your score over the next couple of months.

Open a couple of credit card accounts to start with. You will want to limit your inquiries to no more than 3 in any 6 month period. For that reason it is a good idea, if you have cash on hand, to start out with secured credit cards. Secured cards come with a guaranteed approval and do not require a credit pull so you will be able to limit the inquiries on your account. Another great option is Aarons Sales & Lease; they are the only rent to own company that I am aware of that reports to all 3 major credit bureaus. When establishing new credit try to limit your new credit inquiries as much as possible.

After establishing a couple of new credit card accounts make sure that they are open and active. You will want to use the cards to build up some positive transaction history. At the same time you will have to use them carefully to maximize your credit utilization. Never exceed 30 percent of the available balance as that is the sweet spot in where your account is open and active while still maintaining a large percentage of available credit. It’s a good idea to make a small purchase or two once a month and then pay your bill after you receive it in the mail to ensure that it posted and the activity on the account will be reflected on your credit profile.

There is a lot more that goes into it than the information that I have provided here. There are specific calculations that we can do based on credit scoring models that allow us estimate scores at particular intervals. Though, in order to remain compliant I never quote time-frames or make guarantees because there are always variables that could disrupt the work that we are doing. The information provided here is more than enough for you to go out and fix your own credit. There is nothing that we can do in that regard that you cannot do yourself. You can take the steps outlined in this article and fix your credit.

If you do not have the time to put the work into this process or would rather just leave it to the professionals we are here to help. Northern Finance Group employs highly trained credit repair professionals and we are willing to work with you in every step of the way. Our rates are reasonable for the high level of service that we provide and we can ensure that your credit reach the heights that you are striving for. If you have been turned down for credit and need to get your credit repaired as quickly as possible please give us a call for a free consultation.

Tackling Bad Credit With The Fair Credit Reporting Act

What is Bad Credit?

Bad credit is when your credit report score or the ‘FICO report’ score is below par. If you have bad credit, you will have to put up with high interest rates, and may not be eligible for personal loans and mortgages. In addition to this, you may have to face penalties as well.

What is the Fair Credit Reporting Act?

It is a federal act that promotes accurate information and the consumers’ right to keep their information private. It is primarily concerned with consumer reporting agencies such as financial bureaus.

How can this act benefit people with a bad credit score?

Every American citizen is entitled to certain rights under this act.
First of all, you have the right to know if any information in your credit report has been used against you. So, if your loan or mortgage application is rejected because of a low credit score, you will be alerted to take appropriate action.

Secondly, you have the right to know what is in your report. This can help you in two ways. First, you would be able to spot the cause behind your low credit score and work on those areas. If you have too much current debt, too many accounts or pending debts, you can focus on those issues. Second, you will also have a chance to dispute a creditor or a financial bureau regarding any false errors on your list.

A significant percentage (20%) of credit reports is said to be faulty. So, there is a good chance your score is as less as it is because of inaccurate reporting or false charges.

Credit Restoration services are your best bet when you are trying to get your credit score up. The experts of such companies have the competency to spot every error on your report and dispute with a creditor or one of the three financial bureaus, which are:




The reason you should take professional help is because they fully understand the extent of your rights. For example, you may not be able to distinguish an outdated piece of information on your report, which as per the act, you have the right to get removed.

A reputed credit services company handles such cases on a daily basis so they know how to dispute with creditors and bureaus. If the entries on the credit report prove to be inaccurate, the credit repair company will get them removed.

The Personal Credit Maze

The Personal Credit Maze

It’s too often in life that we find ourselves not paying attention to the details. I personally have been in that same situation many times in life. All you can do is learn from your mistakes right? I realized paying attention to the so-called little things can have enormous impacts on our lives.

Let me start with this analogy. If you were summons to court with no documentation would you go? Does that make you guilty if you don’t show? Are you left liable for anything down the road? Much like this situation the Personal Credit Bureaus report information on consumers that may or may NOT be correct. Along the line of the being sued with no paperwork scenario, the credit bureaus have no actual proof showing the consumer actually to have that information reported on their credit profile. This can be stopped there is a way to leave all that bad reporting in the rearview mirror.

I have a quick story to share, this involves a friend of mine. Before he entered into the program he decided he could find his way through the credit maze himself. He thought “I don’t need anyone to help me do it”. Wow was he wrong. What happen was he pulled his reports and noticed that he had some items reporting that didn’t belong to him. At that time in his life he was building new credit so he didn’t have any other open lines except the information reporting that was incorrect! He went ahead and filed a dispute after many hours of trial and error trying to get that far. After a few weeks and tireless hours which he didn’t have to spare) the credit bureaus removed the positive reporting incorrect information and well his score dropped 14 pts. Not a huge drop but not understanding the credit maze I learned the hard way what can and can’t affect your score.

Let’s talk about the 5 things that make up your credit score:

1) Payment History – 35% of your total credit score is based on payment history. Repayment of past debt is one of the leading factors that create your credit score.

2) Credit Utilization – 30% of your credit score is based on the percentage of available credit the individual has borrowed.

3) Length of Credit History – 15% of your credit score is based on 2 key things: the length of time each account has been open and the length of time it’s been since it last been utilized.

4) New Credit – 5% of your credit score goes into how much new credit you have. Applying for too much credit can flag you and make you look financially unstable to lenders. Only if you can see if fit financially or when it makes sense should you apply for new credit.* Remember inquires whether denied or approved still leave a lasting mark on your personal credit score*.

5) Mix of Credit – 5% of your credit score goes into you mix of credit. Experts say that by making on time payments with different vendors shows lenders you’re simply less of a risk. Once again Good behavior Gets Rewarded.

Learn how you can obtain the profile you need to go up against lenders and get the answer you deserve. Learn how to fight back and understand what it is you need to do to stay on track and maintain. We understand each situation is uniquely different! Start to make the change today.

4 Tips To Easily Earn Credit Card Reward Points

Credit cards are well-known for giving their users a number of useful rewards. Unfortunately, many cardholders still think that overspending is necessary in order to qualify for these rewards. This is another myth that is simply not true.

Anyone can make the most out of their rewards card. You just have to follow a set of rules. You won’t even have to go over your budget. This article presents a couple of easy tips to help you do just that.

Choose the Right Card

It is of paramount importance that your rewards card should be perfectly suited to your spending habits. After all, your lifestyle dictates the way you use your card. Of course, this is easier said than done.

There are a number of different factors that go into the selection process. You should also take the different card categories into consideration. For instance, should you get a student card or a business credit card? These card types were made with specific demographics in mind.

Ultimately, you need to make sure that you weigh your choices carefully so that you end up with the best one.

Settle Routine Expenses with your Credit Card

Many newbie cardholders try to inflate their total spending in order to earn additional reward points. It is important to state here that this is the wrong method. Overspending is never the way. It will only lead to financial ruin and excessive credit card debt.

Instead, you need to start paying for your recurring expenses with your card. Keep in mind that everything you need can be easily charged to your credit card. This would include your groceries, rent, and utilities. This is probably the best way to earn reward points since you won’t need to go over your monthly budget. Just make sure that you settle your statement in full at the end of the month.

Use Your Card to Settle Other Outstanding Debts

Most of us have debt. This can be in the form of student loans, mortgage, car financing, and insurance. You may not realize it, but you can also use your credit card to pay for these. This may seem like a bad idea, but the concept behind it is very similar to paying your recurring expenses with a credit card. You have to pay for these things monthly anyway, so why not do it in the most efficient way possible?

As you pay for your outstanding debt with your card, you will also be able to earn reward points, even cashback. Nothing could go wrong just as long as you settle your bills on time.

Use Your Card To Make Large Purchases

Let us be clear: you shouldn’t make large purchases just to earn rewards. However, if you were already planning to spend money then try using your card to make these purchases. This will be like hitting two birds with one stone. Not only will you be getting the items you wanted, but you will also be adding reward points.

Aside from this, you will be also be able to maximize the benefits that come with using your credit card. This would include fraud protection as well as an extended warranty service.

Maximizing your reward card is the right financial move. As illustrated above, you can earn reward points without having to overspend. You will still be able to follow your monthly budget. The tips presented above are simple enough for anyone to follow. Just make sure that you always keep them in mind.

How to Check Your Credit For Free

Many of us never bothering checking our credit. Why? Because we feel like we’ve gone through a few rough patches; maybe defaulted on a loan, have a past eviction, or even stolen a few items from a rent-to-own business and the credit world has flagged us for life. This is why leaning how to check your credit for free will give you an overview of where you stand with your credit and see how bad it really is or isn’t.

First, let me say that you shouldn’t just assume you have bad credit. If you had a problem with not paying your bills, collections, or even judgments against you that does not stay on your credit report forever, so don’t just assume you can’t get credit because of your past.

Many sites will tell you to contact the creditor and pay off your old debt, but what the smart people will tell you is check to see how long ago your bad debt was reported to the credit bureaus. After seven years, many items will fall off of your report and while it is the honorable thing to contact your creditor and pay it off, the smart thing to do, especially if you don’t have the extra cash is to let it disappear into the sunset and be gone forever. Just remember, to never try to get credit from the company again because they will remember and turn you down flat.

One fantastic and free way to check your credit is through the credit monitoring sites like Credit Karma. Now this is not an advertisement for the website, but simply letting you know that by entering your personal information, you can get a full account of who you owe, how old the debt is, and how much they’re claiming you owe.

This site, like many others will offer suggestions based on your credit score, which they will provide to you, what credit you will likely qualify for. The forum is filled with others just like yourself who have had ups and downs with credit, so you will know what to expect before applying.

The truth is, some individuals are just afraid to check. They again, assume their credit is horrible so they result to having no bank account (due to bounced checks), no credit cards (due to defaults), and end up using the local check cashing brick and mortars and prepaid debit cards, both of which you have to spend money to have access to. This is just crazy to spend money to add money to a prepaid card, or to pay 3-5% to cash your paycheck.