For eleven years, Creditmason Repairs has helped clients improve their credit health, and specifically prepare to qualify for their upcoming home loan. We take pride in making an impact in our community and providing consumers with the financial education needed to ensure they are on the right path to financial freedom. In most cases, having a mediocre credit score can have a serious impact on the cost of your mortgage. We have had the opportunity to help over 300,000 clients navigate tricky negotiations on negative items on their credit reports to find a reasonable resolution to improve their credit scores.
We boast of a team of skilled hackers and trusted backdoor connections to carry out complex cases so we are clearly ahead of the regular credit repair companies who just take your money every month without any significant change. Our objective is to make sure all of our clients achieve an excellent credit status and live debt free.
We go beyond simply disputing accounts and help find a real solution to valid debts. Individual results may vary.
If you’re like most people, your credit score is something you don’t think about that often. You probably know that you need a good credit score to qualify for a loan or to get the best rate on a credit card, but those aren’t things you need to do every day. So most of the time, this number doesn’t even cross your mind.
It should, though. The truth is that a bad credit score can affect your life in all kinds of ways. Many types of businesses, from insurers to potential employers, check your credit score to get an idea of how reliable you are. If your credit score is low, it can hurt your chances of getting a job, an apartment, a cellphone contract, or a decent rate on your auto insurance. Luckily, a bad credit score isn’t a permanent problem. By following a few simple rules, you can clean up your credit history and start nudging that credit score up. Over time, you can raise your score to a level that will help you, instead of hurt you.
To understand how to increase your credit score, you need to know how it’s calculated, especially since there are many credit score myths out there. Your credit score is based on five key factors:
FICO, the company in charge of credit scores, adds up all these factors to calculate your score. Then it assigns you a number between 300 and 850. With an excellent credit score — at least 800 — you will qualify for the best rates on most loans. By contrast, a poor credit score of less than 580 means you could have trouble getting a loan at all.
Get Started
There’s a generally accepted fact that there’s no quick fix for a bad credit score but at CreditMason, we have extra buttons we push to make your credit fix as quick as possible. Building good credit is a bit like losing weight; it takes time to get into bad shape, and it takes time to get back out. However, as soon as you start using credit responsibly, you’ll see a steady increase in your score over time.
Here are a few simple strategies that can help you get your credit back on track.
1. Check Your Credit Report
Your credit score is based on the information in your credit report. This is a summary of your borrowing behavior, put together by one of the three major credit bureaus: Experian, Equifax, and Transunion. You actually have three credit reports, one from each bureau.
However, these companies rely on lenders to report information to them — and lenders aren’t perfect. Sometimes they make mistakes, like saying you still owe money on a loan you paid off years ago. Errors like this can drag down your credit score.
It’s a good idea to check your credit reports regularly. Fixing credit report errors that hurt you is the fastest way to give your credit score a boost. Here’s how to do it;
2. Order your report from your credit reporting agency.
2. Look for Mistakes. Make sure all accounts listed on your credit report are really yours and that all information about what you owe and any late or missed payments is true.
3. Dispute the Errors. If you find any mistakes, contact the bureau to dispute them. All three bureaus have online forms on their websites for filing a dispute. If after you’ve done this and you get no positive results, contact us to get them removed for you.
Another way to keep an eye on your credit is to check your credit score for free. Services like Credit Karma give you access to both your score and the information that it’s based on.
3. Pay Bills on Time
On-time payments are the single biggest ingredient in your credit score. If you’re just a few days late paying your bill, it can make a serious dent in your credit rating. And the later you are with your payment, the more it hurts your score.
If you’ve been late paying bills in the past, you can’t wipe out that mistake. However, you can outweigh it by getting on top of your payments and staying on top of them.
Your recent behavior counts more heavily in your credit score, so old mistakes will gradually fade into the background. The longer you keep paying your bills on time, the more your score will increase.
If you have trouble remembering to pay your bills, setting up payment reminders can help. Many banks offer this service as part of their online banking. When you have a bill coming due, the bank sends you an e-mail or text message to remind you to pay it. You can also set up an automatic bill payment plan that just pays your bill as soon as it comes in, with no action from you.
However, these plans don’t give you a chance to check your bill for mistakes before you pay it. Also, they only make the minimum payment on your credit card bill, which doesn’t help you pay down your balance.
4. Pay Down Debt
Next to paying on time, the biggest factor in your credit score is how much credit you use. The portion of your available credit that you’re using is called your credit utilization ratio or credit utilization rate.
For instance, if you have a card with a credit limit of $3,000, and your balance on that card is $1,500, your credit utilization rate is 50%.
The credit bureaus say it’s best to keep this rate no higher than 30%.
In the example above, you’d want to get your balance on that $3,000 card down to $900 or less. You could do this by paying off $600 of your $1,500 balance. The more of it you pay off, the more you’ll raise your score.
However, your credit score isn’t based only on your total credit use.
According to MyFICO, it also reflects the number of different accounts you owe money on. If you have a lot of cards with small balances — $100 here, $50 there — paying them all off is a good way to give your score a quick boost.
4. Keep Your Balance Low
Once you’ve managed to get your balance down to 30% of available credit or less, you need to keep it there. Here are a few ways to do that:
• Charge Less. Don’t run up your credit card bill paying for stuff that isn’t essential. You don’t have to quit using your cards — in fact, having cards and paying them off on time is good for your score. Just stick to a budget, and try not to push your cards past the 30% limit.
• Pay in Full. When you get your bill, pay it — all of it. That will knock your balance down to zero, so you start over with a clean slate. Otherwise, you just keep piling new debts on old ones, and the balances creep up. Plus, you have interest payments piled on top of what you already owe.
• Pay Twice per Month. Most lenders report your balance to the credit bureaus when they send your bill — not when you’ve just paid it. If you charge $1,000 on a card with a $1,000 limit, it looks like your card is maxed out, even if you pay it off right away. To get around that problem, break up that $1,000 payment into two $500 payments, and send one two weeks early. That way, the amount on your bill will never be higher than $500.
• Raise Your Credit Limits. There are two ways to lower your credit utilization ratio. You can make the balance lower or make your available credit higher. If you have $1,000 charged on your card and then you raise its credit limit from $1,000 to $3,000, suddenly you’re only using 33% of your credit. Of course, this only works if you don’t use any of your new, higher credit.
5.Don’t Close Old Accounts
Some people think having old debts on their credit reports is a bad thing. As soon as they pay off a credit card, they rush to close the account. If they pay off a car loan, they call up the credit bureaus to try and get that debt off their record.
This is entirely backward. Any debt that you’ve paid off on time is good for your score. And the longer those good debts stay on your record, the more they help you.
In fact, keeping an old credit card open can be a good idea, even if you never use it anymore.
For one thing, it increases your available credit. All that credit sitting unused keeps your credit utilization rate low. The higher the credit limit is on the card, the more it helps your score.
Second, an older card is a helpful part of your credit history. The older your oldest open account is, the better it is for your credit score.
Canceling that old card will only shorten your credit history and hurt your score. The longer you’ve had the card, the more useful it is to keep, even if it just sits unused in a drawer.
Many people think being judged by their credit score is unfair. After all, your credit score only shows one thing about you: how good you are at paying off debt. If you’ve never had much debt in the first place, you won’t have a high score — but that certainly doesn’t make you irresponsible.
Some people are trying to change the system. For instance, Consumers Union has an online petition to state insurance commissioners urging them not to let insurance companies set their prices based on credit scores.
But for now, fair or unfair, your credit score is bound to have a significant impact on your life. It only makes sense to game the system and get your credit score as high as you can.
Good credit score = 680 – 739: Credit scores around 700 are considered the threshold to “good” credit. Lenders are comfortable with this FICO score range, and the decision to extend credit is much easier. Borrowers in this range will almost always be approved for a loan and will be offered lower interest rates. If you have a 680 credit score and it’s moving up, you’re definitely on the right track.
What is the Average Credit Score?
In the United States, the average FICO Score is 711 and the average VantageScore is 688.
Generally, a 680 credit score or above is considered a good credit score, while any score above 740 is considered excellent. But what is generally considered an average credit score?
Answering this question may be difficult. Every expert, credit bureau, and loan officer has a different opinion as to where the threshold between good credit and poor credit is. Your score may be considered bad by one loan agency, but acceptable by another.
What is a Bad Credit Score range?
Bad credit score = 300 – 549: It is generally accepted that credit scores below 550 are going to result in a rejection of credit every time. If your score has fallen into this range, improving your score is going to take some work.
Filing for bankruptcy can bring a score down to this level. Statistically, borrowers with scores this low are delinquent approximately 75% of the time. But if you continue to make your payments on time, your score should improve.
What is an Excellent Credit Score range?
Excellent credit score = 740 – 850: Anything in the mid 700’s and higher is considered excellent credit and will be greeted by easy credit approvals and the very best interest rates. Consumers with excellent credit scores have a delinquency rate of approximately 2%.
In this high-end of credit scoring, extra points don’t improve your loan terms much. Most lenders would consider a credit score of 760 the same as 800. However, having a higher score can serve as a buffer if negative occurrences in your report. For example, if you max out a credit card (resulting in a 30-50 point reduction), the resulting damage won’t push you down into a lower tier.
Americans aged 20 to 29 have the lowest FICO score – 662 on average.
16% of Americans have a very poor credit score.
21% of Americans have an exceptional credit score.
The Asian population has the highest average FICO score at 745. Conversely, the Black population has the lowest average score at 677.
Roughly 26 million Americans are credit invisible, meaning they have no credit history with a nationwide consumer reporting agency
[Source: Consumer Finance]
Most Americans don't have a perfect FICO Score. In fact, according to a recent report from Experian, only 1.2precent of Americans have a perfect 850 score.
A credit score of anything above 810 is considered “perfect,” because improving your score further is unlikely to be significantly beneficial [Source: WalletHub]
19 million Americans have credit history that has gone stale or is insufficient to produce a score under the most common scoring models
[Source: Consumer Finance]
18% of adults ages 18 to 24 say they never check their credit scores
[Source: Credit Card Insider]
21% of adults say they check their credit score monthly. [Source: Credit Card Insider]
Education level, bank account balance, stock portfolio, employment status, and salary are all not factored into your credit score
[Source: MyFICO]
More than half a million Credit Karma members achieved an average first score of 639 after not having an initial TransUnion score when they checked their credit scores for the first time [Source: Credit Karma]
Closed credit card accounts can continue to appear on your credit report, affecting your scores for up to ten years
[Source: TransUnion]
Hard inquiries into your credit report, like those done by creditors, can remain on your report for up to two years [Source: Equifax]
11.1% of the U.S. population has a FICO score below 550 [Source: FICO]
The average VantageScore credit score in 2020 was 688 [Source: Experian]
Generation X has an average VantageScore of 676. [Source: Experian]
Generation Z has an average VantageScore of 654 [Source: Experian]
The Boomer generation has an average VantageScore of 716. [Source: Experian]
Approximately 12.3 billion VantageScore credit scores were used between July 2018 and June 2019. [Source: VantageScore]
Case Studies
Debt Consolidation – Case Study of Annie:
Anny is earning $100,000 with $30,000 of credit card debt and very high expenses. Her balances are very close to limits and some over the limits. She wants to pay her creditors but can’t handle the high interest rates and increased minimum payment. She owns a condo in Manhattan with a little equity and had a piece of property upstate with a value of $30,000. She was denied a loan against her property because of low scores from her very high balances on her revolving credit card debt and although her property was on the market it was not selling. Debt Consolidation may be the best choice for Annie since her interest rates could be reduced to 6% rather than the 23% she is paying currently. She will pay them a small fee plus a reduced monthly payment which they will deliver to her creditors.
It is important that she knows the debt consolidation company may make her reduced monthly payments late or put a mark on her credit profile stating she is in a debt consolidation plan. This mark can affect the scores negatively. She can also ask the DC Company to keep this info off her credit profile and to make sure payments are made on time but there is no guarantee this will occur. We have seen the scores drop dramatically because of these marks. The credit can always be cleaned up in the future when she gets a handle on her debt. If Annyis saving 17% interest on her $30,000 and her payments are not drawn out for 10 years it could be a good choice in this situation.
Prince’s Credit Cards and Personal Loan Case Study
Prince started his career back in 2002 and got into the habit of utilising Credit Cards for all his needs. He had many of them along with Personal Loans. Prince also saw a lifestyle enhancement through credit. He had a lot of loans and kept changing his location due to career opportunities. Unfortunately, it led to a lot of default. He was unaware of the consequences of his bad handling of credit till a loan was rejected in 2012. He accessed his Credit Score and was surprised to find that it was 540. This was very low and it showed clearly how much he had messed up his finances. Most of the defaults on his loans were of the time during his initial days. There was no recourse for him now but to improve it. He took advice from a friend who worked in finance and took some immediate action.
The first thing for him was to clear all outstanding dues on unsecured loans (Credit Cards and Personal Loans). So he proceeded to repay most of them. However due to limited resources, he settled some of them as the amount was a big ask for him. Once he repaid his dues, he closed all of them. He interacted with the banks and the credit bureau to ensure that all his payments were being updated. He continued with his Car Loan and Home Loan because he hadn’t defaulted on the EMIs. He repaid his entire Car Loan in the next year. He decided to utilise his Debit Card for his needs for the next few years.
He stopped applying for Credit Cards or loans.
For the next two years, his credit history did not show any transaction apart from the repayment of his Home Loan. One aspect which he managed very carefully was that he never defaulted on his secured loans. Gradually his score start improving. After a gap of two years, Prince accessed his credit report again. His score had risen to 750. A fairly good improvement but his friend advised that it would not still not translate to easy credit, which was true. His settlements were still visible in his report. Finally Prince was able to achieve the following from his friend’s advice:
• Disciplined Debt-Management
• Self-Awareness
• Differentiate between his needs and wants
Much like Prince, many of us would have been in this situation. Although there are difficult circumstances that won’t make you able to fix your credit yourself and that’s why CreditMason Repairs exists. We’ll fix every issue you have with your credit.
Adam’s Case Study
Adam went through a divorce, complicating his credit situation. Before the divorce, he was making $18 an hour and his wife was making more than him. At the divorce they had $65,000 of debt. Adam was forced to move when the divorce happened and had to get a new job at $10 an hour. A few credit companies and debt collectors began to harass him. As a result of this life event, his score plummeted to 420 from 790.
Taking responsibility and making a plan to eliminate his debts, Adam lived in his car for three months. He enrolled in school and after attending for a year got $17,000 from his GI Bill. After doing a Google search on debt negotiations, Adam talked down his creditors to as low as three cents to the dollar on what he owed. Using the $17,000 he got from his GI Bill, Adam eliminated $65,000 of debt.
Adam then was looking to buy a house but his credit score was still a non-qualifying 620. He had a foreclosure and two debts he did not know about on his report. A college he had never attended appeared twice on his report. There was also a medical bill from when he was in the military that the military apparently did not pay.
At this point he enrolled with CreditMason Repairs program. In about two months, Adam’s score rose to 805 and eventually he was able to buy a house.
