How to Consolidate Federal Student Loans

Consolidation of student loans is a means of merging several federal loans into one single, specific consolidation loan. By applying via the Federal Student Aid office of the U.S. Department of Education, borrowers can simplify the bill-paying procedure, reduce monthly loan payments, and find a repayment schedule that suits their needs. Consolidation may be used as an alternative to loan rehabilitation for borrowers who have defaulted on one or more federal student loans.

Reasons for Loans Consolidation

Overall, restructuring of student loans is only possible on federal loans. On the other hand, refinancing is open to both federal and private-loan borrowers. The consolidation can help to reduce and simplify monthly payments for borrowers with federal student loans. It is also a perfect way to obtain alternative repayment options and creditor rights, rehabilitate a defaulted debt, or even relieve debt repayment stress. Consolidation of student loans can be a reasonable choice if you plan to:

• Reduced monthly payouts. Consolidation stretches the maturity period to 30 years and therefore reduces the monthly charge. Bear in mind that, in the long run, you will pay more interest on your loan.

• Payments are made streamlined. If you are currently making payments to various servicers for student loans, consolidation will streamline this process so that you will only have to pay off one loan.

• More repayment options and rights for borrowers. Federal loan consolidation enables borrowers to select from a variety of income-driven repayment options. Moreover, borrowers who may not otherwise qualify for the Public Service Loan Forgiveness will benefit by consolidating their federal student loans under a direct consolidation loan.

• A separate servicer of loans. When you have issues with the existing federal student loan service provider, restructuring allows you the option to pick a new one. When you complete your application for consolidation, you will be asked to choose a servicer for the new loan.

• An alternative to the rehabilitation of loans. When you still have student loans in default, credit consolidation will help you pay off the loan when you agree to repay the new loan with an income-driven repayment program or make three voluntary, on-time, and complete monthly payments on a defaulted loan before actually consolidating it.

• Flat rates: The rate of interest on a Direct Consolidation Loan is a fixed rate of interest, meaning that it will remain the same for the duration of the loan. Unlike a private loan, the new federal fixed rate does not rely on current market trends but on the existing federal loans: the interest rate will be the weighted average of rates of interest on all your loans being combined, rounded to the nearest one-eighth of one percent.

Revived eligibility for benefits: According to finaid.org, if you merge your federal loans, it “resets the three year clock on forbearance and deferments .” If you have used up your allocated deferment time before, including unemployment and economic hardship, you will now be eligible for them again. The same applies to forbearance, a provision that allows you to delay your student loan payments temporarily.

Refinancing vs. Consolidation

The consolidation of student loans allows borrowers to consolidate several federal student loans into one federal student loan only. Although consolidation streamlines multiple loans into one simplified payment, the amount of interest you pay over time will likely increase — saying that you can’t save money via consolidation. The process then increases the repayment period, thus reducing the monthly payment but increasing the overall interest you must pay.
In turn, student loan refinancing is the method of merging several private and/or federal student loans into one private loan. Unlike consolidation, refinancing helps lenders to reduce interest rates, which could save money over the loan ‘s lifespan. Refinancing student loans with a private loan does, however, mean that you do not have access to government loan protections, repayment plans, or forgiveness programs.

Pros of student loan consolidation  

• Prolonged repayment deadline

• Simplified payment procedure

• Lower monthly installments

• Ability to change from a variable to a fixed-rate loan

• Alternative strategies for repayment include phased and income-driven plans.

Cons of Student Loans Consolidation

• The prolonged debt period means more interest payments over time.

• Exceptional interest on specific loans becomes a portion of the consolidated loan principal.

• Loss of consumer incentives on other loans, such as interest rate reductions, principal rebates, and cancelation incentives

• You will lose credit for any pre-consolidation contributions to Public Service Loan Forgiveness or Refund Package.

• You can’t pay off single loans to reduce your monthly payment.

How to get approval for your Student Loans Consolidation 

Students who have left school, graduated, or dropped below half-time enrollment are qualified to consolidate their federal loans. There’s no credit requirement for the consolidation of federal student loans. There are, however, several other conditions restricting who can apply for a direct consolidation loan:

• Based on the type of loan, the loans you want to consolidate should already be in repayment or grace period, which lasts for six months after you graduate, leave school, graduate, or drop below half-time enrollment.

• Generally speaking, if you have consolidated a loan already, you can not combine it again without merging another qualifying loan too.

• Unless you make three straight monthly payments on the loan before consolidation or agree to repay your current direct consolidation loan under one of the income-related repayment programs, the loans you choose to merge can not be in default.

• Similarly, consolidating a defaulted loan obtained by wage garnishment – or in compliance with a court order – is not permitted until the garnishment order is lifted or the judgment is vacated.

In contrast, refinancing of private student loans has close approval requirements to conventional loans. To qualify, lenders usually need a credit score in the upper 600s, a debt-to-income ratio below 50 percent, and a demonstrated potential to repay the loan.

5 Steps to get student loans consolidated

The consolidation of federal loans is handled by the Federal Financial Aid (FSA) branch. This makes it easy to sign in, access the details of your loan and complete a consolidation application and promissory note, agreeing to repay the loan. It takes less than 30 minutes to apply, and approval will take between 30 and 90 days, so you should continue to make payments on your current loans until the consolidation loan is disbursed. To consolidate your federal student loans follow these steps:

1. Log in to your Federal Student aid account

To apply for federal student assistance, an FSA account is mandatory, so you probably already have login credentials. Begin the consolidation process by logging in at StudentAid.gov and scrolling through the toolbar to “Manage Loans,” and then “Consolidate My Loans.”

2. Gather the needed documents

Compile the documents required to complete the application and promissory note, including your education loan documents and personal income information, before commencing the consolidation process. If you complete the form online, you will have access to all the details about your federal loan. You should also find contact details for two references, including one parent or legal guardian, who have known you for three years at least.

3. Complete an application for a Consolidation Loan

Fill out a Federal Direct Consolidation Loan Request and Promissory Note after collecting the necessary paperwork. You can submit this free application online or in hard copy, and it contains the following sections:

• Select Loan & Servicer. The first portion of the application for a loan includes that you pick which loans to combine and then determines the new combined loan amount and interest rate. This is also where you can ask for a grace period and select a loan servicer.

• Select Repayment plans.  The repayment options for federal student loans depend upon the type of loans you consolidate and your financial condition. Each portion of the application uses your salary, family size, and tax status to determine your projected monthly payments under various plans. Finally, before moving on to the next segment of the application, you will be asked to select a repayment plan.

• Terms & conditions. This section of the application contains the Borrower Agreements, Certifications, and Authorizations, which define and authorize the processing and regulation of a direct consolidation loan against a borrower account by the U.S. Department of Education. It is also where you agree to make payments on the combined loan and demonstrate your awareness of – and commitment to – the consolidated loan terms and conditions.

• Personal Data. Fill in all the borrower information in this section, including your address, driver’s license number,  contact information, and employer details. Then enter the names of two sources and the contact information.

Preview & sign. Finally, review your completed form, agree that all the information is valid and accurate, and accept the conditions for repayment — and register.

4. Wait for approval and continue to make payments

Contact the consolidation servicer you chose with any concerns about your application status after you submitted your application. Online applicants obtain contact details from their servicers at the conclusion of the application process; paper applicants receive it while uploading or printing their documents. In general, it takes 30 to 90 days for the loan approval process, but this varies by the servicer.

Once your application is authorized, the lender will use your direct consolidation loan to pay the balance of your existing debts. There would, however, be a period between the filing, acceptance of the loan, and when the initial federal loans are paid off. For this reason, it is essential to continually make payments on your current federal loans until your servicer notifies you of the disbursement of the new loan and consolidation of your loan.

5. Start paying back

The amount and timeline of your repayment shall be dependent on the repayment plan chosen during the application process. The loan servicer will notify you with your repayment plan — and your first payment date — but borrowers usually have up to 60 days to start repayment after the loan disbursement. If any of your current loans were in the grace period and you asked to delay consolidation, payments would not have to be made until closer to that date.

Alternatives to Consolidating Student Loans

Loan consolidation isn’t going to work for everyone, so understanding the other available options to federal loan borrowers is helpful. If you are struggling to make your actual monthly payments, deferment, forbearance, and revenue-driven repayment plans may be a viable solution. However, consider refinancing if you want a reduced interest rate – or want to consolidate private student loans.

• Deferral. Deferment of student loans lets borrowers postpone their payments for a defined period of time. What’s more, interest wouldn’t accrue during the deferral period if you have a Subsidized Perkins Loan or federal student loan. This choice is open to back-to-school borrowers, unemployed or otherwise struggling to meet minimum monthly payments.

• Forbearance. If you are not eligible for deferment, you may apply for forbearance, which your loan servicer might approve. You’ll be liable for payments on all of your federal loans under this option. Payment halt is limited to 12 months at a time.

• Payment plan driven by income. Income-driven repayment (IDR) options allow borrowers to lessen their monthly payments to be more commensurate with their income. Under these plans, monthly payments typically range from 10 percent to 20 percent of the monthly disposable income of a borrower.

• Refinancing privately. Try refinancing if you have federal or private student loans, and want to reduce interest rates or merge them into one simple payment. The method of applying to refinance the student loans includes finding a lender and completing the procedure of applying for a loan.

Under some of these circumstances, you will need good credit to obtain benefits, in which case you should consider consulting a credit repair agent or a credit repair specialist. Look up ‘credit repair in Irvine’ for help before and after the repayment of debts.

Business Credit Repair Services

We, at 007 Credit Agent, understand the issues related to business credit and offer services that cater to all scales of businesses. These services will help to improve the business credit history, get better credit opportunities, and expand the business. At 007 Credit Agent, the business credit services fall under three categories:

1. Credit Building
2. Credit Repair
3. Credit Monitoring

Credit Building refers to the process when Credit Repair consultants help entrepreneurs in creating their business profiles to qualify for credit opportunities. It includes verifying that the business has required licenses and approvals.

The credit repair specialists ensure that the business profile is active with the major credit bureaus Dun and Bradstreet, Business Experian, and Equifax Commercial. They also ensure that the credit bureaus have the correct information about the business. These bureaus utilize all the credit-related information to come up with credit reports and business credit scores. Thus, credit agents take special care to verify the authenticity of the data. 

The foremost issue related to business credit is that startups or newly established businesses face a hard time in finding credit opportunities. Their short credit history makes the process even harder. From a business stand-point, a new business venture comes under review in several scenarios. From vendors to investors, suppliers to potential employees, everyone scrutinizes the business before associating with it. Thus, 007 Credit Agent offers services that enable businesses to get initial trade credit. They set up vendor accounts for businesses and ensure that the vendor accounts report the accurate payment history to the credit bureaus.

Many businesses experience seasonal fluctuations in demand and unexpected expenses. As a result, the business cash flow might also fluctuate. In such situations, revolving credit is a good option, and 007 Credit Agent offers just that. Revolving credit is useful for meeting operational expenses and is a convenient and flexible option.

Credit Repair is the second segment of service. Through this, the credit repair specialists help their clients to improve their credit score. They negotiate with lenders to alter repayment plans so that the business does not default on loan repayments. Credit agents work in close collaboration with credit bureaus to dispute negative information in the business credit reports. They also offer debt consolidation programs to businesses to provide a long-term solution to their credit issues.Credit monitoring services are an assurance to the clients that the Business Credit Advisors are watching their business activities and would take immediate steps to counter threats that can affect their credit scores and business relationships.

Credit Repair specialist California

Individuals are forever inclined to have control over their finances and consider credit to be a vital part of their financial planning. Credit or leverage means a formal contract between a buyer and seller in which the buyer takes something from the seller and promises to return it within a stipulated time. Credit also means creditworthiness, which means being in a financial position that makes one reliable enough to receive financial credit. Credit helps people in achieving their desired goals and ambitions. However, whether they can obtain credit or not depends on their creditworthiness. Thus, applying for a credit card, home loan, or education loan, the person’s creditworthiness is the key to everything.

Creditworthiness should not be confused with the capacity to pay.  While a person’s income and assets decide his paying capacity, creditworthiness is associated with willingness to pay. There might be many people with high incomes, but they don’t have good track records of managing credit. They could have made late payments or abstained from making full payments. These gestures negatively impact their creditworthiness.

The metric to judge a person’s creditworthiness is credit scores. It is a financial tool used by lenders or banks to evaluate the risk associated with providing credit to an individual, and hence, it shapes their decision regarding extending credit. Credit scores are assigned based on information collected by credit reporting agencies and credit bureaus. The information gathered includes payment history, the amount owed, length of credit history, and types of credit. The credit scores are in the range from 300 to 850 and are derived using the FICO (Fair Isaac Corporation) credit scoring. Credit reports are created based on this, which gives a detailed breakdown of any person’s credit history. There are three major credit reporting agencies in the United States which assign credit scores. These are Equifax, Experian, and TransUnion.

A key aspect to discuss in this regard is the Fair Credit Reporting Act (FCRA). It not only regulates the consumer credit information but also gives guidelines regarding who is authorized to access the credit reports. This law has existed since 1970 and validates the credit information that each of the credit reporting agencies provides.  It has specific guidelines on the type of information collected (bill payment history, current debts, past loans, employment information), time of collection of information by credit bureaus, and timespan till which they can keep the information with them. FCRA also regulates how customers can access their data. It gives individuals the following rights regarding their credit information:

·      Access to one’s credit report – A credit reporting agency is obliged to provide access to an individual’s credit report on request, twice a year. The person needs to present proper identification for gaining access

·        Protected Access – Access to credit reports is granted only to particular institutions. These institutions include banks, insurance companies, and landlords

·        Accurate reporting – The credit reporting agency is obliged to examine, verify or remove the information on discovering any fraudulent information in the credit report

·         Privacy of medical information – Credit bureaus have to keep an individual’s medical information private

·     Data privacy – Credit bureaus can’t publish personal account numbers or other such confidential information

·         Receive notifications regarding negative credit information

·         Right to seek damages – An individual is authorized to sue the credit reporting agency which has violated FCRA and seek damages

As discussed above, FICO scores help to ascertain the creditworthiness of individuals. Generally, a credit score of more than 740 is a good one, and the person with such a credit score is creditworthy. Thus, he can easily obtain optimum interest rates and favorable terms of credit. For credit scores between 580 and 740, individuals would be able to secure loans or credit. However, the interest rate would not be optimum, and the interest rate would increase while the credit score declines. Finally, individuals with a credit score lower than 580 would face difficulty in getting credit at suitable interest rates.

Credit scores are affected by a variety of factors. Hence, it is likely that the credit scores might get hampered. With individuals undertaking various transactions, they end up weakening their credit rating or end up getting a bad credit score. Individuals facing financial distress might end up making late payments or missing out on credit card payment dates. All this leads to derogatory remarks on a person’s credit report, thus weakening the credit score. Given below is a list of such factors:

·         Late Payments – As discussed before, making the payment for credit received after the due date leads to a derogatory mark in the credit report. This increases in severity after 30 days have passed since the due date and the payment is still pending

·       An account in charge-off – Once a borrower has made late payments or missed the payments, the creditor might not feel assured that the borrower is going to pay back the money. Thus, he writes off or charges-off the account owing to tax reasons. A third-party collections agency takes charge, which tries to get the money from the borrower

·       Bankruptcy – In this situation, a borrower might pay back some or none of the credit amount, and it leads to a negative mark on the credit score

·        Civil Judgement – Losing a civil lawsuit will show as a derogatory mark on an individual’s credit score

·       Debt Settlement – This is when the borrower can pay back only a part of the debt owed to the creditor prior an agreement with the creditor

·      Foreclosure – Falling behind severely on the mortgage payments can lead to foreclosure, which causes the bank to attempt a forced sale of the borrower’s home, which then acts as collateral for the loan

·     Tax Lien – Failing to pay taxes will lead to the government placing a lien (claim against the borrower’s property) to recover the debt. Naturally, this would weaken the credit score of an individual

Thus, with our elaborate discussion on the need to maintain creditworthiness and the various ways in which credit scores can be negatively affected, it is of prime importance that we address the issue of credit repair or credit restoration.

Thus, the role of a credit agent or credit repair specialist becomes very crucial. Although a borrower himself can do credit repair, this may not always have the desired impact. Credit repair requires complete knowledge of the credit reports and how to read and analyze them. One should be well versed in laws related to credit reporting agencies. Also, at times one does not realize where the problem lies or how to rectify it. The inability to allocate proper time to credit repair is probably a big reason behind individuals hiring credit repair specialists.

Based on a person’s credit score and credit report, the credit repair specialist can provide adequate suggestions to a person to improve his creditworthiness. As discussed above, there can be various reasons for negative or derogatory remarks on a person’s credit score. The credit repair specialist analyses a person’s current financial position & assets and accordingly suggests how to handle those negative marks. Some of the recommendations might involve disputing the negative marks, paying off the debt, negotiating the removal of the derogatory marks, and settling the credit reporting time limit. Handling all these negative items requires proper correspondence with credit bureaus and debt collection agencies. The credit agents have to send letters on behalf of the clients with concise information about the client’s credit situation. Protecting a client’s privacy is the topmost priority for any credit repair specialist.

Moving on to some of the other roles of a credit repair consultant, we have the following:

a)   The consultants should ensure that their clients know the rights available to them to dispute information on their own. Also, they educate clients about the FCRA

b)  A credit repair specialist should review the credit report from all three major credit reporting agencies mentioned above so that it is easy to track and verify any errors present in any one credit report

c)   The credit repair specialists also monitor the credit profile and help in building a sound financial future. 24×7 monitoring of the credit profile notifies the individual about the current changes in the report and gives them information about how the changes affect the credit score

d)  As it is equally important to maintain a good credit score, the credit repair specialists guide the individuals in building action items and carving out a trajectory to continue having a good credit score

The credit repair specialists, on behalf of their companies, draft a legal contract for their clients before starting any work. They should have a proper understanding of government agencies along with knowledge of the state’s credit repair laws. 

There are various credit repair companies and credit repair specialist California. The belief is that the main focus of these companies is to provide the best credit-related services to their customers. However, there have been many cases of credit repair agencies extorting money from customers or using false promises to lure them into traps. It led to the Bureau of Consumer Financial Protection suing many credit repair companies for deceptive marketing practices.

Thus, when dozens of credit repair companies claim to provide excellent service, it becomes tricky to pick the right one. An individual should diligently crosscheck all relevant details regarding a credit repair company before hiring them.

A few attributes that should be mandatorily present in a credit restoration company are:

a)   Good Rating – Better Business Bureau is an organization that helps customers in finding reputable service providers. Thus, if it reviews a particular credit repair company and provides a positive review & good rating, it becomes trustworthy and can be appointed. The credit repair companies should also have legitimate reviews from third parties. It can be in the form of testimonials, reviews, or blogs on their website. The validation from multiple sources helps to ascertain the credibility of the service provider

b)  No shortcuts taken for credit repair – Credit repair is not a one-day process. It requires the proper study of credit reports, verification of information from credit reporting agencies, contacting various credit bureaus and debt collection agencies. Thus, credit repair companies promising to offer quick fixes for sorting out negative remarks on credit reports can’t be trustworthy. At the same time, if a credit repair company takes too much time without any visible results, they might not be the right ones for the job

c)   No Pressure – A good credit restoration company will never pressurize its customers for anything, be it personal information, or adopting tactics to deal with derogatory remarks on credit reports. They should always put their customer’s need first and help them understand their finances and make an informed decision

d)  Money-Back Guarantees – Credit restoration companies offering money-back guarantees not only respect their customer’s money, but they are also confident about their services. They will always ensure that they provide their best to meet the customer’s expectations

e)  Personalized Services – When so many credit repair companies are plaguing individuals to opt for their services, the degree of personalization one company offers is what sets them apart. There are many variants of personalized services ranging from different packages for different customers, to having a dedicated account page

f)     Imparting knowledge regarding finances – Having sound knowledge about credit is the biggest asset. Thus, credit repair companies should educate their clients so that they understand what is meant by good credit and can maintain a positive credit history. All their programs or services offered should be described in detail for the clients to make an informed decision. Additionally, they should also brief their clients about the FCRA so that they know how their credit information is collected and how they can access their credit.Thus, it is evident to all, be it any city or state, having a decent and comfortable standard of living requires the efficient management of credit. This management of finances or credit has become so important that credit repair service companies have taken a central role in our lives. With their services at our disposal, all individuals are at ease about their financial position and know how to build a safe and sound financial future.

Fair Credit Reporting Act (FCRA): Common Violations and Your Rights

The financial future of a consumer will rise and fall based on his credit report, so everyone must keep a close eye on the contents.

Credit reports are used to determine who gets a job, a credit card, a loan, or even a rental apartment, so few things are more important than getting an error-free credit report.

Even then, mistakes are made in credit reporting, and the consequences can be disastrous.

The Fair Credit Reporting Act of 1970

Recognizing credit information’s life-changing power, Congress enacted the 1970 Fair Credit Reporting Act (FCRA) to protect consumers and control how credit information is used and distributed. The law gives the consumers the right to be informed of what is in their credit file and access to the scores assigned to them by rating agencies. It also requires anyone who denies credit, insurance, or a job because of credit report information to tell you where they got the information, and how to contact the issuer.

The Federal Trade Commission is responsible for implementing the FCRA. The Dodd-Frank Act shifted much of the responsibility for rulemaking to the Consumer Financial Protection Bureau, but the FTC still maintains the authority for enforcement.

The country’s three largest credit reporting agencies – Equifax, Experian, and TransUnion – are required by law to do all they can to collect and report consumer information accurately. They keep files on over 200 million Americans collectively and issue more than 3 billion reports a year.

Given the sheer volume of data, errors are unavoidable. The FCRA provides customers with the ability to file complaints if they find inaccuracies in their reports. It also mandates reporting agencies to investigate and correct false information.

Errors are often clerical, but sometimes they are the consequence of old information reported as current. The New York Times reported in 2014 about the troubles of a Mississippi woman whose $40,000 second-mortgage debt was discharged via a 2007 bankruptcy filing. But four years later, the debt appeared as unpaid on her report, although she had repeatedly attempted to get the error removed. It took action by the attorney general of Mississippi to get her report rectified.

Cases such as these are typical. State attorneys investigate FCRA related complaints. Many have consumer information on their websites to let people know about their rights and what steps they should take if they discover misinformation.

Common violations of the FCRA include:

1. Outdated information supplied as new information. Failure to update documentation after the bankruptcy is over is just one example. Agencies could also report old debts as new, and a financial account can be reported as active when the consumer had closed it.

2. Creditors provide inaccurate financial information regarding you to reporting agencies.

3. Reporting agencies combine or mix details from one person with that of another because of a similar (or identical) last name or social security number.

4. The inability of the agencies to follow dispute management guidelines.

5. Pull your report for an unlawful or unjustifiable reason. For example, viewing a credit file to determine whether you have any assets before filing certain types of lawsuits.

6. Failure to send notifications concerning your credit score or report, in violation of the FCRA.

7. Reporting agencies which provide information to unauthorized individuals or companies.

All FCRA actions are not the result of errors or documents which are improperly handled. For instance, the Los Angeles Times reported in 2012 about a data broker who, in a settlement with the Federal Trade Commission, agreed to pay $800,000 for accusations that he illegally sold personal information to human resources, recruiting firms, and background screening.

Rights Under the Fair Credit Reporting Act

If you are rejected for credit or have any other reason to believe you might have been unfairly harmed by a credit report, get the name of the national credit agency which issued the statement. A property owner who turned you down for poor credit or a bank that refused you a credit card would tell you which entity released the report.

Then, contact the concerned agency and ask for a copy of the report. Bear in mind that if the report contains inaccurate information, other agencies might be using the same information in their reports. Within 30 days of rejection, the organization supplying the data will provide you with the report free of charge. Otherwise, a report may be acquired at a fee.

If you notice incorrect or obsolete information, notify the credit reporting agency in writing, describe the error and request that it be corrected immediately. If the agency investigates and takes no action, and if you are still confident that the report includes errors, approach the Federal Trade Commission or the nearest office of the State Attorney General.

It’s essential to know your rights under the Fair Credit Reporting Act:

1. You are entitled to know what is on your file. Contact the credit rating agency that published a report used to refuse you credit, accommodation, or employment. For all of these reasons and purposes, you are entitled to a free report: information has been used against you; you are a victim of identity theft and put a fraud alert in your records; your file includes false information resulting from fraud; you are on social aid, or you have been unemployed but intend to apply for work within 60 days.

2. In case you have become the victim of identity theft, you are entitled to obtain a copy of transaction documents relating to your identity theft from businesses—loan applications or credit card applications, for example. You may also be authorizing law enforcement agencies to request the details. Businesses have to provide this within 30 days of obtaining the request. Some firms are reluctant to release this information, claiming that it is proprietary or protects consumers. However, the FCRA notes that businesses are expected to provide records of applications and business transactions to assist victims in reporting fraudulent charges. The FTC defines company obligations.

3. All customers are entitled, from each national credit bureau to one free annual credit report.

4. You have the right to request your credit score. Credit reporting agencies issue these. In some instances, when you apply for a loan, mortgage lenders will tell you your score. Additionally, some issuers of credit cards now include revised ratings in their monthly statements.

5. You have the right to challenge information that is missing or incorrect in your report.

6. Credit reporting agencies are required to correct or remove information that is inaccurate, incomplete, or unverifiable.

7. Reporting agencies are not mandated to disseminate outdated negative data.

8. Information contained in your file is restricted to those with a legitimate need.

9. You have to give the credit agencies written permission to send your credit report to employers.

If your rights under the FCRA have been breached, you are entitled to receive actual or statutory damages, recover fees for lawyers and court expenses, and claim punitive damages.

Violations of fair credit reporting act

There are several common breaches of the Fair Credit Reporting Act, involving the thousands of information reporting companies and the three significant offices taking the information and assigning it to your credit report.

Several of the common violations include:

Furnishing and reporting of past information

If your credit conditions change, your credit report has to be updated. If it is not updated, then that is a violation. How can violations occur?

1. Recording a debt after it was settled or paid off as charged-off.
2. Reporting late payments while payments were made in due time.
3. Old debts are listed as new ones.
4. Reporting that an account was active after a customer voluntarily closed it.
5. Failure to report bankruptcy discharging of debt.
6. Reporting information that is over seven years old (when notices of bankruptcy are about to lapse) or ten years old (civil judgments).
7. Inaccurate information on the balance due.
8. Failure to provide a reasonable procedure for reporting identity theft (or providing credit details on an account where identity theft has been reported before).

Mixing of files

Mixing files with another person with similar background details (sometimes as careless as not identifying the Jr. and Sr. in related surnames).

Credit bureaus’ debt dispute procedures

When presenting a formal complaint about the credit report’s accuracy, the credit bureaus must follow appropriate protocols, such as performing an audit, fixing inaccuracies, or removing a debt in dispute. Agencies sometimes fall short in these areas.     

Debt dispute Creditor violations

Creditors are required to note each disputed debt and send corrected information, avoid submitting incorrect information when reported, perform an internal dispute investigation within 30 days, and have a fair process for filing a written dispute or identity theft report.

Privacy Violations

Your credit report should be reported only to individuals with a “valid need,” such as creditors, insurance providers, landlords, utility companies, and employers (with your consent). It is also an infringement to draw a credit report for an impermissible reason, such as deciding whether you are collectible in a dispute, an employer pulling the report without authorization, or a creditor on a debt discharged using the report to verify your current financial operation.

With-holding Notices

You must be given notice of your credit details being registered, managed, and used. Violations may include:

1. A creditor who fails to notify you when they provide negative credit information.
2. A ‘credit information user’ (prospective employer or lender) who does not notify you of an unfavorable decision based on your credit report. Or that credit information user who refuses to identify the source of credit information that he obtains about you.
3. A creditor who has failed to provide you the credit score when used as part of any lending decision.
4. A creditor who refuses to inform you of your right to a free credit report.

It’s essential to be educated and know your Fair Credit Reporting Act rights.

Damage recovery for FCRA violations

The information protected by the Fair Credit Reporting Act is crucial to an individual’s financial well-being that the claimant will file suit and sue for damages when the FCRA violations occur.

To what extent a victim can be compensated depends to a large extent on whether the violation was willful or negligent. The parties liable for potential breaches include credit reporting agencies, companies supplying the credit agency with information, or those using credit report information to make a job or housing decision.

Willful breach of FCRA

These are the most severe – and more highly compensated – violations because it indicates that the agency, company, or person was aware that their actions would impact you. Still, they went ahead and did them anyway.

The categories of damages to be paid for here include:

1. Actual damages. These are damages that can be proved by the harm caused by an action or failure to act by the business, agency, or individual. There’s no limit on how big a reward could be.

2. Statutory damages. These are damages that don’t need proof, but the reimbursement is limited to between $100 and $1,000.

3. Punitive damage. These are awarded to punish and prevent an agency, company, or person from violating the FCRA again.  There is no upper cap on the amount that can be granted.  

4. Attorney fees and legal expenses. If you win your case, you can get the costs of litigating the matter covered.

Negligent violations of FCRA

If an entity, company, or individual fails to exercise due care or takes action that a reasonable person would not practice concerning your credit records, this may result in “negligent” actions and money damages.

The forms of damages available are the same as for willful violations, including actual damages (no limit), statutory damages (usually between $100 and $1,000); punitive damages (no limit); lawyer fees, and legal expenses.

Frivolous lawsuit penalties  

Credit reporting agencies have the power to terminate violation investigations if the agency considers the consumer’s allegation to be unfounded or insignificant.

This usually occurs when the user does not provide enough details to examine the information in question.

They can also lose a case in court if they filed a lawsuit in bad faith or threaten an organization, company, or person. If this occurs, it will compel the consumer to pay the attorney’s fees for filing bad faith documents.

Deadlines

While dealing with the Fair Credit Reporting Act, here are four critical deadlines to remember.

• Incorrect information must be rectified or deleted within 30 days of your dispute (or 45 days if, after submitting your written dispute, you provide further details).
• Businesses or other information providers will inform you, within 30 days, of any negative information reported to the credit bureaus.
• The statute of limitations for filing a lawsuit is two years after the date a breach was found.
• Or within five years from the date of the violation.

Annual Report

If you request it, the three major credit bureaus will be required to provide you with one free copy of your credit report per year. Of course, you have to identify yourself appropriately. The AnnualCreditReport.com website is a perfect place to get your annual credit report for free. For certain instances, a free copy of your credit report must also be given by the credit bureaus:

• If a corporation has rejected your application or charged a higher rate of interest due to details on your credit report.
• When you ‘re unemployed and plan to look for work within the next 60 days.
• If you ‘re on public assistance.
• If you have been a victim of identity theft (or if your credit report, due to identity theft, contains inaccurate information)

Additional credit reporting services

There’s a lot of emphasis on the three nationwide consumer reporting firms — Equifax, Experian, and TransUnion — but recognizing that there are other providers of consumer reporting information is beneficial.

The Consumer Financial Protection Bureau has published a list of other firms that classify themselves as consumer reporting agencies. These firms collect information and report about you to other firms in credit, insurance, employment, residential rental housing, and different decision-making situations. Determining which of the companies might be relevant to you is worth considering.

This list has been independently verified by the CFPB, even though it is not all-inclusive.

In the meantime, here are the latest contact numbers for the three major customer reporting firms:

Equifax: 525-6285 (800)

Experian: (888) 397-3742

TransUnion: 680-7289 (800)

Credit reporting agency issues aren’t uncommon. It can be difficult to get prompt corrections to your credit report’s mistakes, but it is worth trying.

If you have concerns about credit reporting agencies and how information is obtained, you can contact a non-profit credit advisory organization and speak to a professional counselor about the subject.

If your credit report isn’t rectified or the error turns out to be accurate and is harming your credit score and credit obtaining abilities, consult a credit repair agent or a credit repair specialist to determine the future course of action. Looking for credit repair services California will be a great idea when searching for local or regional services.

Factors Affecting Credit Score Rating?

We will start our discussion with the factors that affect credit scores. Thus, the main factors which are used to calculate the FICO credit scores are the following:

1. Payment history has the maximum weightage, amounting to 35%, in determining the credit score. Thus, the information about whether an individual has paid back the money received in credit is important in ascertaining his reliability in terms of receiving credit help. Late payments (30 days, 60 days or 90 days late), bankruptcies, charge-offs, foreclosures, liens, all are captured under payment history and greatly affect the credit score.
2. The amounts owed also constitute a major portion of the factors affecting the credit score. The weightage for the amounts owed is 30%. Since amounts owed could vary a lot, this factor is necessary to understand the financial capability of a person. Credit Utilization is considered by FICO which is a measure of the amount of debt an individual holds in comparison to their available credit limits. The percentage of available credit used and the exact amount owed on different types of accounts (mortgages, credit cards, and loans) are all taken into consideration.
3. The length of credit history is also quite important and has a 15% weightage. As mentioned before, a good credit score is built over time and one doesn’t start with it. This would mean that a young person would most likely have a lower credit rating than someone much older than her. However, a younger person with a short credit history is not always at a disadvantage. If all the payments are made on time and he/she scores well in other parameters, they can have a good credit score.
4. New credit and recently opened accounts are assigned a weightage of 10% in gauging the creditworthiness of an individual. Thus, apart from the history of payments and the length and depth of credit history, the new activities taking place in terms of new credit being taken and opening accounts are also important. Whenever a person applies for a new line of credit repair services California,a hard inquiry is made under which the borrower’s credit information is checked. A soft inquiry, on the other hand, involves retrieving your credit information. The hard inquiries often end up hampering the credit score. This is because it is assumed that if many accounts have been opened recently, an individual is at a greater credit risk.
5. The types of credit in use are also assigned a weightage of 10%. The credit score calculated takes into account if an individual uses a mix of credit options such as mortgages, credit cards, loans, and store accounts (also the number of accounts one holds).

For more information feel free to visit website- https://007creditagent.com/

Don’t wait.

Call at +1 949 258 7026 to get your credit scores today.

EVERYTHING YOU NEED TO KNOW ON CREDIT SCORES AND BANKRUPTCY.

Oops! Did you file for bankruptcy? Do you feel you are not going to recover from it? Better said, do you want to boost your credit score?

Not to worry, this article will shed light on the tips to improve credit score fast even after filing for bankruptcy.

 It is a widespread notion that filing a bankruptcy would ruin your credit. Well, folks, the good news is, with patience, discipline, and of course, the tips that will be shared, you can improve that credit score. Although, bankruptcy, as well as other factors, are capable of causing severe damage to your credit scores. They are able to recover.

Before we get to it, a quick question you might want to consider is; why do we get into bankruptcy in the first place? What are the causatives that prompt us to file bankruptcy?

The predicament of bankruptcy often arises because of unpaid debt. It can be quite frustrating when creditors are coming down with lawsuits for the inability to pay.

Before filing bankruptcy, you need to know what your choices are. Bankruptcy claims are intelligible moves in dire financial crises. It gives you room to breathe and pay off debts incurred. However, there is a catch to this, and it is important we know the types of bankruptcy and their overall repercussions.

Bankruptcy categorization is by chapters.

.

Chapters are what guide the proceedings of filing for bankruptcy. There are four chapters or chapter numbers within Title 11 of the United States Code called bankruptcy of the federal bankruptcy code. These chapters factor in situations or scenarios of filing the bankruptcy report. Think of them as the different strokes for different folks. Therefore, you need to understand your financial state. There are chapters 7, 11, 12, and 13.

Chapter 7 refers to the liquidation of assets.

Chapter 11 covers reorganization.

Chapter 12 equals adjusted debts for a Family Farmer with regular annual income.

Similar to Chapter 12, chapter 13 covers an adjusted debt but only for individuals with regular income annually.

Of all these types of bankruptcy, chapter 7 is the most commonly filed. It is essential to know that when applying for these bankruptcy types, considerations are made first on the kind of financial situation at hand.

Let’s take a look at chapter 7:

When filing for chapter 7, you might want to be careful. Chapter 7 bankruptcy strips you of some of your assets.

A court assigns a bankruptcy trustee that administers the case. The trustee is obligated to provide accurate paperwork and sell off properties to the benefit of the creditors.

A quick run-through of the responsibilities of a bankruptcy trustee include:

Reviewing the Bankruptcy Petition:

When a debtor files a chapter 7 bankruptcy or any other, the paperwork is required. A petition, as well as other documents, are filed. The trustee’s job is to review the paperwork. In your submission, information on personal and financial reports, papers on financial debts, property and assets, income statements like; paystubs may be required. Generally, anything that would help prove the claim of bankruptcy and any other information should be made available. 

An example would be; if you claim you earn $50 a month, they will definitely need evidence for that claim. Probably, a paystub or an account statement would be sufficient.

Sales of Assets:

You might as well be saying goodbye to assets that you cannot protect as a debtor. However, the operation of this particular responsibility is quite different. Here is how it works:

Keeping specific property from being sold is dependent on your state’s exemption statutes. What does that mean? 

Any property that is not exempted for a debtor to keep would automatically be sold off to repay creditors. Frankly, this is a critical responsibility of trustees that should not be overlooked because when a chapter 7 bankruptcy is filed, assets can be lost. To stand a better chance, you can check the exemption (bankruptcy) statutes of your state.

Chapter 13;

Chapter 13 is another commonly filed Bankruptcy. It is not suitable for businesses but is excellent for individuals. Companies like corporations and limited liability companies cannot file bankruptcy in their names. Remember, the goal of bankruptcy declaration is for a debtor to pay off debts when other options fail.

Chapter 13 offers debtors a choice of installments. Individuals have the options of monthly, quarterly and annual payment plans to ensure they can pay off debts. Debtors are obligated to stick to their payment as the debt may last for over five years. The payments are made to the trustee who pays the creditors.

Why do people go Bankrupt?

You would agree that there is more sense in prevention than cure. 

In the research conducted by Debt.org, statistics show that bankruptcy hit an all-time high in 2005. Over a million bankruptcy cases were filed. In 201,1 California topped the table with over 240,000 cases. Guess what, nothing has changed. 

What then is responsible for the rise in bankruptcy filings?

Budgeting and spending lifestyle is a significant factor. However, that research indicates that the dominant player is the unprecedented financial situation of people; they are overwhelmed by financial hardships from medical expenses to college funding and all sorts.

Generally, things like; foreclosure, job loss, medical expenses, and bad budgeting are some of the main contributors to the rise in bankruptcy filings.

Job loss: No one prays to lose their jobs, especially when it is not for a well-planned retirement. However, the loss of a job could mean spending all your savings. This continues to happen, especially if there are no job options in view.

Medical expenses: we often land ourselves on the sick bed and this can drain our savings. Medical expenses may be unforeseen, but it takes a toll on our finances.

Bad budgeting: No thanks to inflation, spending habits have gone south. Then, there is the issue of discipline. Some just cannot help their buying habits, can they? With low income, excessive spending leads to financial instability. 

The presence of a bankruptcy on your credit report is a red flag for creditors. Bankruptcy for creditors means financial irresponsibility and that takes a toll on your score; bankruptcy drops your credit score by as much as 150 – 200 points.

It is true that a bankruptcy can stay on your credit report for as long as ten years. 

Didn’t you know that? Well, now you do.

Now, don’t panic. The objective of this article is to show you how to boost credit even after a bankruptcy. Just so you know what you are getting into, you must understand the impact of having a bankruptcy on your report.

Another truth is that most creditors determine your creditworthiness from your credit report, and having a bankruptcy on that report could be detrimental.

Recall the chapter 7 and 13 bankruptcies. Now, how long will these bankruptcy types stay on your report?

Chapter 13 Bankruptcy

This bankruptcy will be displayed differently on your credit report. You must go through your reports. Both a completed bankruptcy and discharged debts will stay on your report for up to 7 years. A couple of debts in a chapter 13 bankruptcy may even outlive the bankruptcy itself. This is because of the nature of this bankruptcy. It takes about 3-5 years to pay off these debts.

Chapter 7 Bankruptcy

A chapter 7 associated debt can be dropped off within a few months of filing them. After all, assets pay off the debts. However, the bankruptcy remains on the report for ten years. Think of it as ‘you drop the debts, but the report still says you were indebted.’ Discharged debts drop off the report after seven years.

Now that you are in this mess, what do you do?

• Have a plan: Planning is crucial. Seeking counseling from experts in budgeting is a great start; they will guide you on the best ways to budget, amongst other things, which would be essential going forward.
• Take steps to repair your credit through your reports proactively: the easy way to go about this is to contact the best credit repair service in California.  Contrary to popular opinion, credit repair experts and specialists can be of immense help if you want to boost your credit.

Well, credit repair agents can see what you do not. If there is one thing people do not do regularly after filing a bankruptcy, it is checking their reports. However, you can do this yourself but, an extra pair of eyes from a credit repair specialist would not hurt, would it?

These experts would do nothing but help you ensure that every account to the smallest cent is accurate in your reports. What this achieves is to help you to dispute negative information from the bureaus, and these repair experts are up for the challenge; they can argue all day. To do it yourself, ensure you check all three repositories down to the last cent.

• Authorized User: you can contact friends and/or family members to make you an authorized user. They give you credit, and you can take it up from there. It can be difficult getting someone to make you an authorized user so that you can utilize an AU (authorized users) trade. 
• Secure Credit cards: the major challenge that comes with filing a Bankruptcy is trust. Therefore, to get access to credit, a workable solution is to use secured credit cards. The issuers of these cards give out the card, of course, with specific limits and applicable fees, but only when a deposit is made upfront. It is similar to collaterals that banks collect; using a secured card gives you credit accessibility only with “collateral.”  

However, before you jump on it, you should look at the disclosures of the issuer. This card is more comfortable to obtain as the lender is in a “no risk” situation by giving it to you.

• Pay on time: if it is a secured or an unsecured card, your goal after filing bankruptcy should be creating a good impression. Lenders love it when you pay on time; in fact, everybody does. To keep a clean report (positive) and improve your credit scores, this should be what you are looking at.
• Co-signing: this is easy; you get a friend or family member to co-sign with, and you are on your way to getting good credit. The only thing to be wary of is discipline. A slight slip in payments would get you right where you started. Make payments on time or, you would be dinging your report as well as whoever signed you.
• Pay them fast:  first, all of your accounts that were in bankruptcy should be included in your report. As such, it is responsible for you to keep paying off those loans you owe. Pay them as timely as possible. You need to show creditors that you are every bit worth the credit.
• Job changing: this is particularly surprising but quite reasonable. Lenders can be unbelievable sometimes. Most of them look a little beyond the application and report you file. As ridiculous as it may sound, it is best if you are able to maintain a job for a long time. This is not suggesting staying stuck in a job that you do not like, but changing jobs 5 to 6 times in 2 years suggests instability, especially after a bankruptcy.
• Get a secured loan: banks can help with this. There are two types of secured loans: upfront payments and loans without upfront deposits. Now, you might not necessarily spend that loan. Keep it in a bank and make it a habit to pay on time. 

In summary, bankruptcy is not that terrible. It can do its damage, but recovery is possible. Thoroughly analyze the state of things before taking any actions, and avoid repeating the same mistakes that got you there in the first place.

How to repair your credit?

Are your loan applications getting rejected because of a low credit score?

Are you worried about your monthly installments against student federal loan?

Are you paying more? Can you save on student loans? 

If you do not have money to pay a professional to improve your credit score, you still have the option to improve your credit scores yourself.

Yes, you read it right!

You just need to understand your consumer rights under the Fair Credit Reporting Act and you can repair your credit score.

Before we discuss in detail how to repair credit, we should debunk some common myths about credit cards.

Is it a myth or reality?

Today, with this reading, we will get a deeper understanding on how to use a credit card and how it affects the credit score.

There are many rumors related to credit cards like whether to keep a card open, how to use a credit card, and when to pay it off. Not understanding how credit cards work can inadvertently harm your credit score. 

Let’s discuss them one by one-

1. Myth: Keep only one credit card open

The myth is that people should not keep more than one credit card open.

Check: Having more than one credit card open can decrease the credit score for some individuals but not for everyone. 

In fact, opening more than one credit card will increase the credit score potential over time. This happens because you demonstrate to lenders and creditors your ability to manage more than one credit card at a time. For a responsible individual, multiple credit cards can increase the credit score long-term. 

Suggestion: If you are a responsible individual, the best recommendation is for you to open a few new credit cards every year. Look for cards that will provide the best discounts, rewards, and cashbacks for your type of monthly spending. If you are not responsible and will accumulate unnecessary debt that you cannot pay off in a reasonable timeframe, then you can decrease your score.

2. Myth: Never own a credit card

Many consumers have the misconception that one should not own a credit card because it leads to unmanageable debt that ultimately puts financial stress on them.

Check: For a responsible person to establish credit, owning a credit card is one of the easiest ways. If you can manage your financials and have the capability to stick to your budget, you should be able to handle credit cards easily. Responsible credit card use will build your credit score.

Suggestion: If you can manage your finances and be a responsible credit card user then you should have them. Credit card users may not be aware of the potential risks of overspending, consequently they damage their credit scores. This can occur because they incur unmanageable debt and unpaid credit card bills. This results in lower credit scores.

One thing worth noting is that having no credit payment history results in no credit scores because you will not have any payment history to determine a score. So, it is important to establish a positive credit history.

3. Myth: Never Increase the credit limit

Most credit card users receive offers from credit card agencies stating- You can increase the credit limit on your card!

Check: Such offers are often ignored by cardholders because they assume it is a deception by the lending agencies. This is not the case.

Yet, asking lenders to increase a card’s limit is another way you can help boost your credit scores.

How does it work?

If you have a current limit of $1000 on your card and you spend $100 a month, your utilization will be 10%. 

Let’s assume you receive an offer from the credit card company to increase the credit limit to $1500.

If you do not accept the offer, your utilization score will still be 10% with no impact on credit score.

If you accept the offer, your utilization score decreases to 6.67%, provided your expenditure remains the same.

This can significantly increase your credit score.

Suggestion: Requesting a limit increase on your credit cards will help reduce your overall utilization ratio and will boost your credit scores. Call your lender and ask if this request will result in a hard inquiry on your credit report.

4. Myth: Always go with free credit cards

People consider that they should not own credit cards that charge fees. They prefer to own card without any annual charges. They think that credit cards without annual fees provide more value and benefits than a paid one. 

Check: Credit cards with annual charges offer differential benefits. A long list of benefits includes lounge access at airports, substantial discounts at restaurants, groceries, merchant outlets, show bookings, etc. An important point worth noting is that benefits weigh more than the annual fees. Different categories of credit cards offer different benefits. To gain maximum advantage, you should opt for a card as per your spending.

Suggestion: Gauge your expenditure carefully and own a credit card which suits most with your lifestyle.  

1. Myth: Paying credit card balances and when it is best to pay it off

Many people think that if they carry a balance in their credit card, it will help them to increase their credit score. They pay only the minimum payment each month to show the lenders that they have the capability to pay their debt. 

Check:  This is not true!

Only timely payments and paying the full balance can increase your credit score. Pay the minimum payment only if you cannot afford to pay the full amount. Keeping a balance on your credit card month to month never helps you to increase the score, however it can decrease your credit score. This also increases your credit utilization ratio which in turn reduces your credit score. Making minimum payments will also accumulate interest on your principal balance and will end up costing you a lot more when you finish paying off the total balance. 

Suggestion: Always pay your credit card balances in full each month if you can and more importantly always pay them on time. 

How to repair your credit?

When repairing your own credit, you should be aware of some important terms, definitions, and facts. 

Please find the list below- 

1. What is a credit score?
2. What is negative credit information?
3. What is a credit report?
4. How to dispute information on a credit report?
5. How to increase your credit score?

What is a credit score?

When you think of lending money to someone, there is a risk associated with that lending. This is the reason why banks charge some amount of the loan in the form of interest. Even when you deposit some money in your bank account, you get some interest on it. The payment that the bank pays as interest is a lot less than what you pay them on a loan because the deposits in the savings account are almost risk-free.

How will you know the credit worthiness of someone when deciding to lend money or not?

When lending to a friend, you already have an established relationship with them.

When searching for a local bank to partner with, you check the history of the bank, its customer service, and its interest rates.

In the professional world, potential creditors and lenders do not know your ability to pay on time so they check your creditworthiness with a credit score.

A credit score is a three-digit number, used by banks, lenders, creditors, and companies to calculate the potential risk they are taking by lending money to you. Apart from banks and lenders, this score is used by agencies like telephone companies, insurance companies, government organizations, landlords, etc. to check the financial background of a person before offering any service to him.

The major three credit bureaus who calculate credit scores are- Experian, Transunion, and Equifax.

The credit bureaus use different methods of calculating credit scores. FICO scores developed by Fair Isaac Corporation are the most used credit scores in the United States. Consumers enjoy better terms on loans and insurance premiums when they maintain good credit scores.

What is negative credit information?

Any information on your credit accounts that increases your risk of borrowing capital from lenders and creditors is considered negative information. It includes- bankruptcies, late payments, foreclosures, repossessions, collections, etc. 

With time the impact of negative information reduces, but it cannot be eliminated completely until after 7 years have transpired after your last payment. Late payments, foreclosures, Chapter 13 bankruptcies, collections, and charge-offs impact your credit history for seven years while a Chapter 7 bankruptcy does for 10 years.

Under a Chapter 13 Bankruptcy, a person develops a payment schedule to pay debts that are prioritized based on debt amount and debt type. In this case, assets are not liquidated.

Under a Chapter 7 bankruptcy, there is no payment plan but the assets are either sold out to a lender or liquidated to pay off the amounts owed to lenders.

You should avoid any negative credit information on your credit reports when possible. There are some tough circumstances in a person’s life that (s)he cannot avoid. There are ways to compensate for the impact of negative information by building positive credit information. The easiest way is to apply for a credit card and making timely payments each month. This is a great start to re-establishing your credit after a financial hardship.

What is a credit report?

So far, we have been continuously talking about a credit score and how negative information on a credit report affects it.

Now, is the time to understand what this credit report is?

A credit report is a list of your bill payments, current debt, loans, and other important financial information that is important for a lender to know to determine your creditworthiness.

It also contains information on-

1. Where do you live?
2. Where do you work?
3. If you have been sued?
4. Have you filed a bankruptcy?
5. And a lot more information about your financial life.

Credit Report helps lenders to decide-

1. Whether to approve your loan or not?
2. Whether to rent you a property or not?
3. The interest rate for the loan
4. and much more

A credit report is generated by three major credit bureaus-

1. Experian, 
2. Transunion and 
3. Equifax

Every credit reporting agency maintains your credit report based on most of your accounts that they can access. The reports generated by different agencies may deliver different credit scores but the scores and reports that are generated by different agencies are more or less similar.

How to dispute information on a credit report?

Everyone should check their credit scores and examine their credit reports regularly. Get your credit report from a credit repair expert. If you find any incorrect information in your credit reports, then you can dispute it with the credit reporting agency.

Please follow the step by step approach given below-

1. Get your credit report from a credit-reporting agency
2. Examine your report thoroughly
3. Identify disputable information or entries in your credit report
4. Write a letter to the credit reporting agency for the inaccurate information
5. Write a letter to the lender that submitted the inaccurate information
6. Keep a copy of all the letters with you
7. If your request is accepted and information is corrected, you are done
8. If your request is not approved immediately, get help from Consumer Financial Protection Bureau
9. If the issue is still not resolved, contact a credit repair specialist. 

How to increase your credit score?

First, resolve all the disputes on your credit report. Once that is completed then work on building positive information on your credit reports. You may need the guidance of a credit agent for this.

Here is an effective quick guide for you to follow-

1. Pay your utility bills on time 
2. Pay your current accounts on time. If you don’t have a credit card, apply for one, and ensure to make timely payments.
3. Pay down your debts
4. Resolve debts in collections
5. Be a responsible and organized person and manage all your credit accounts wisely
6. Avoid opening multiple credit accounts if you will spend beyond your means

Financial awareness is very important for a person to maintain a good credit score, to improve/ increase a credit score, and to build positive information on your credit accounts.

MISCONCEPTIONS ABOUT BANKRUPTCY AND ITS EFFECT ON YOUR CREDIT SCORE

Bankruptcy is a legal process where individuals or organizations who are unable to repay creditors can seek relief from their debts. In various instances, a court order imposes bankruptcy, which is often commenced by the debtor. Bankruptcy may help you get debt relief, but it’s important to remember that declaring bankruptcy has a significant, long-term effect on your credit.

This is also a significant reason why people tend to be hesitant about filing for bankruptcy. But not filing for bankruptcy and allowing the accumulated debt to go to collections will also have a negative impact on your credit score.

Although the bankruptcy information stays on your credit report for a long time, there are numerous ways to repair your credit. The effect of bankruptcy diminishes over time, and being responsible for new debts after bankruptcy will make it possible for you to secure a loan in the future.

Bankruptcy lets you start over with a clean slate, it’s giving you a second chance. However, it comes at a price, as well. It hampers your credit score, reflects on your credit report, and therefore hurts your ability to secure future credit.

Filing for bankruptcy is not the common man’s cup of tea. It includes a lot of complicated legal procedures and preparation of various documents and financials. People hire attorneys to help them through the entire process of filing for bankruptcy.

People often get deluded about the entire situation because many myths and common misconceptions are surrounding the process and its effect on your credit. Let’s debunk those myths and understand how filing for bankruptcy affects you and your credit:

Myth 1: When you do not have negative information in your credit report before bankruptcy, you might have a higher credit score after bankruptcy than if your report held negative information before it was filed.

Truth: Healthy payment history and lack of unfavorable details do very little to mitigate the effect on your credit score after a bankruptcy. The existence of bankruptcy, and the amount of time that the bankruptcy has been on the report, are the most important determinants. The impact of bankruptcy may decrease over time, which can contribute to an improved credit score, along with favorable records post-bankruptcy.

Myth 2: Every bankruptcy detail, without exception, stays on your credit report for ten years.

Truth: Only the public record of bankruptcy under chapter 7 lasts ten years. All other references to bankruptcy remain for seven years on your credit report including:

• Trade lines that say “account included in bankruptcy.”
• Collection of debts by third parties, judgments, and tax obligations dispensed via the bankruptcy Section.
• Chapter 13 Articles of public record.

When the above things start disappearing, your credit score can see a more significant boost.

Myth 3: You will have weak credit as long as the details about bankruptcy stay on your credit report.

Truth: Although following bankruptcy, you can expect a significantly lower credit score, you can start building your credit back-up with wise credit management. You may also be able to penetrate the successful credit score range (700-749) after four or five years. After the bankruptcy, you can start building your credit back up immediately by:

• Mitigating the negative details on your credit report by adding new credit, such as secured credit cards or small installment loans.
• Enable on-time payments on both current and existing debts.
• Maintain credit card balance usage at 30 percent.

Consulting a credit repair expert will help you plan and restore a good credit score, which allows you to secure future credit.

Myth 4: Bankruptcy affects all consumers’ credit in equal measure, regardless of the amount of debt or the volume of debts included.

Truth: Your credit score will account for details such as the amount of debt dispensed and the proportion of negative to positive accounts. If you have a relatively small amount of debt and your bankruptcy contains just a few accounts, your credit score would be higher than those with a more extreme bankruptcy.

Myth 5: All bankruptcy claims are wiped off your credit report.

Truth: Although bankruptcy can help you remove or cover past debts, those accounts won’t vanish from your credit records. All bankruptcy-related obligations may stay on your credit report and affect your credit score for 7 to 10 years, but their effect may diminish with time. Additionally, federal student loans may still not be dispensed after bankruptcy, and you might still be on the leash for those.

Myth 6: After bankruptcy, you can’t get a credit card or a loan.

Truth: Credit cards are one of the easiest ways to add credit, and for those with a checkered credit background, there are choices out there. Secured credit cards, which require an initial security deposit, have a lower entry barrier, but just like a conventional card, they spend and create credit.

Likewise, loans – such as passbook, CD, or credit builder loans – are available that are backed with a deposit or collateral that can help you create credit while you pay them off. These loans are much easier to get through like secured credit cards since the lender is protected in case you can’t pay. Several creditors will begin providing credit immediately after the discharge. You will get new credit much earlier than expected with proper approach and counseling.

Myth 7: Bankruptcy will permanently destroy your credit.

Truth: In the near future, bankruptcy will do serious harm to your credit but will only reflect on your credit report for a period of 10 years. Any adverse activity, including tax, late payments, collection payments, and attorney fees, will terminate. The bankruptcy will be deleted from the credit record ten years after filing, creating a new slate. You are then safe and secure. Consult experts in your area, and work with them to develop your credit score, look for credit repair specialist California.

Myth 8: If you file for bankruptcy, lenders will avoid you.

Truth: False. Most of the stigma associated with bankruptcy disappeared after Congress passed the new bankruptcy laws in 2005. Most creditors understand our economy ‘s challenges and the impact of this crisis on consumers. So, many would give credit to the bankruptcy-affected ones. Although interest rates may be higher, following a bankruptcy filing, you can still get a loan.

Myth 9: Those who file for bankruptcy are stealing and might go to prison.

Truth: More than a million people elect to file for bankruptcy each year, whether via Chapter 7 or Chapter 13. There are decent people in tight financial circumstances. While there is always a bad apple in each category, most bankruptcy filers are in desperate need of relief and turn to bankruptcy advantages to get them through this challenging period. If you have lost your livelihood and are unable to pay for your credit cards, or have been sick or disabled and have incurred significant medical bills, you are not a criminal to choose relief from bankruptcy. Congress created the federal insolvency laws to help hard-working families get rid of their debts and move on with their lives.

Myth 10: Bankruptcy filing is very complicated and could result in an audit.

Truth:   It is now much more comfortable to file for bankruptcy than in the past. Although the statute involves filling out and sending different paperwork to the court, most of this work is performed online due to electronic filing. In most cases, it merely needs a completed intake form, values for your property, 3-month bank statements, 2-year tax returns, a list of your debts, etc. The rest will be handled by your lawyer or legal firm. A bankruptcy trustee appointed to your case may require additional financial reports after filing, but audits are exceedingly rare (the actual audit rate is around 1 in every 1000 cases filed).  In the rare case of an audit, legal firms help their clients through the inspection with no problems.

Myth 11: If you are married, you cannot file bankruptcy by yourself.

Truth:   The bankruptcy laws authorize anyone to apply for bankruptcy, either individually or jointly. If you are married, you and your partner must decide whether to make a joint filing. For example, you and your partner have joint debts, such as a mortgage, credit cards, loans, etc., then it makes sense to file together. The bankruptcy will either remove these mutual debts or restructure them. For new marriages, however, where one partner has good credit or no joint debt, it could be more prudent for the other partner to file separately to eliminate their own debt.

Myth 12: You can file bankruptcy only once.

Truth: Although the bankruptcy rules were strengthened in 2005, you can still file more than once for bankruptcy, depending on when you filed and the form of bankruptcy.

You can get a discharge once every eight years in Chapter 7, and every two years in Chapter 13. If you are discharged through Chapter 7, you must wait six years before you get a discharge through Chapter 13. When you get a discharge in Chapter 13, you will wait four years before you get a release by Chapter 7.

If the previous case has been dismissed, there will usually be no waiting period for refiling (although a case dismissed “with prejudice” would have an attached waiting period). In these cases, finding a competent bankruptcy attorney is essential, because there are some motions that need to be filed to expand the bankruptcy protection of your current case.

Myth 13: Some creditors are unaffected by bankruptcy and can press charges against you.

Truth: One of the critical reasons for filing bankruptcy is the termination of ALL collection operations. Once you file the application for bankruptcy, whether by Chapter 7 or 13, you and your properties obtain automatic immunity from the court from your creditors (known as the “automatic stay”), which also includes attorneys, collection companies, representatives and/or agents from the creditors.

Specifically, federal law forbids your creditors from contacting you for any cause, including written communications, monthly bills, or telephone conversations. Creditors must abandon all collection activities against you, which means they cannot file a new complaint, prosecute a prior case, or collect on a previous legal verdict.

Myth 14: Means test obstructs people from qualifying for bankruptcy.

Truth:  By the time the revised bankruptcy laws were enacted in 2005, many debtors were frenzied. Creditors tried to persuade the nation that bankruptcy would extend only to a small percentage of the poor and the vulnerable. It was a massive distortion of the new rules. In reality, the 2005 legislation changed the method by which debtors meet the criteria for bankruptcy under the Means Test, but it did not deter people from filing. Indeed, bankruptcy filings have significantly increased since the new laws were passed, particularly in the light of the foreclosure crisis. Don’t just believe anything you’re hearing — whether on TV, in the magazine, or from friends or family. 

Myth 15: Personal bankruptcy will lead your family to ruin.

Truth: Various things lead to family issues, but bankruptcy might help fix some of your problems. Owing to financial difficulties, you might be on the verge of divorce. In some instances, by filing for bankruptcy and getting a new financial start, you can end the family problem. While filing for bankruptcy can be a very tough decision in your life, the absence of all that tension will give your relationship a chance to survive.

While these realities make it easier to file for bankruptcy, it is still a decision that is emotionally taxing and mentally exhaustive. It can have unfavorable effects on your credit securing ability for the long term and might even hinder some of your life plans. Being cautious about your money and loans is of utmost importance; however, if you can’t keep up, it may be your best option to file for bankruptcy. To mitigate the damage, contact a credit repair specialist and get a start on resetting your credit after filing.

What is a credit score?

Individuals are forever on a spree to manage their wealth effectively and want to have control over their finances. In this process, it is of utmost importance to maintain creditworthiness. This essentially means being in a financial position that makes one reliable enough to receive financial credit from a credit repair expert. This can be judged majorly through past instances of paying back money to creditors. The reason behind maintaining creditworthiness or rather the pros of doing so are immense. Among the plethora of benefits that a good credit score offers, the most important ones are higher eligibility for loans and credit cards, lower rates of interest, higher credit card limits, quicker loan approvals, added weightage to visa applications. Thus, it is important to maintain a good credit score throughout to be able to get good credit opportunities.

To shed some light on what is a good credit score, one needs to know what is exactly meant by a credit score. A Credit score is a financial tool that helps lenders assess the creditworthiness of an individual. It is used by lenders or banks to evaluate the risk associated with providing credit to an individual and hence, it shapes their decision regarding extending credit. 

Credit scores are only for individuals while another tool called credit rating is for businesses, organizations, governments. A Credit rating is a tool to measure creditworthiness for companies. There are various credit reporting agencies such as the Standard & Poor’s, Moody’s, and Fitch which assign credit ratings to companies from the range of AAA to D which signifies very good credit rating and poor credit rating respectively.

Coming back to credit scores, there are three main credit reporting agencies in the United States namely Equifax, Experian, and TransUnion, which assign the credit scores. These credit scores range from 300 to 850. These scores are derived using the FICO (Fair Isaac Corporation) credit scoring.

It should be noted that individuals don’t start directly with a good credit score. In fact, a good credit score is built over time.

To get more information on credit scores and credit ratings please visit website- https://007creditagent.com/

Feel free to call at +1 949 258 7026

Why do you need Credit? Why is it so important?

We are surrounded by people who have different lifestyles, privileges, wealth, education, and knowledge. When we see a person with more potential than us, we always aspire to be like him or her. 

Example- Today, if you have a small apartment and your subordinate has a big bungalow, you aspire to purchase a bungalow. But you can’t afford the bungalow with your current saving and salary. Under such circumstances, you need credit.

It is just one simple situation, and in the whole lifespan there occur various such instances when a person desires to have something but due to a limited amount of cash and saving his/her dream remains unfulfilled. 

How is the Credit Score calculated?

Most of the people are unaware of their credit score, how it is calculated, and how each transaction made in the history affects it.  For a common man, it is essential knowledge to have as it helps a lot when a person applies for a loan.

A credit score is a three-digit number calculated based on the history of transactions made by a person. There are various components to be looked at while calculating a credit score, but let’s have a look at the five most important ones.

A credit score is calculated by the following important factors-

1. Payment History: If you miss a utility payment or paying a credit bill, it affects your score negatively, but the timely payments help you increase your score. The frequency of timely payments and missed payments are important in credit score calculation.  The number of bill payments that are missed recently is also one of the important factors.

Suppose there are two loan applicants, and the bank can offer loan to only one candidate. It prefers the person who has missed the payments in the remote past than the person who has missed payments recently. This factor makes up a third of the total contribution made by the rest of the four factors. Hence, it is the most essential component. 

This implies that you should make timely payments of your bills. You should not delay or miss payments because of your negligence, carelessness, or insouciance.

• Total Debt: The next important variable is the total debt on the person’s account. It is calculated by considering all the accounts. The score calculating agency considers all the accounts held by a person and keeps a note of the types of accounts. It sums up the credits available in all the accounts. After this, itsums up money that the person owes to the bank or any other lending organization. This also includes the payment owed in credit cards. After making all these calculations, they gauge the difference between credit and debt. The more the value on the debit side, the less is a score.

This calculation also considers credit card limits. If a balance is high on the credit card and it has reached its maximum limit, it will negate the score. 

People usually make transactions with credit cards without knowing how it influences their credit score. The excessive usage, and the usage beyond the paying limits,deteriorate credit scores. So, beware of misusing credit cards. 

• Credit History Duration: This is the third most crucial factor for calculating your credit score. Most people have this misconception that by avoiding credit card they are improving their scores.

No! This is not true!

If you maintain credit history for a longer duration, it will be your plus point.

What is the reason behind it?

Because if you don’t have any credit history, it means there is nothing for an agency to review in your transaction history. On what basis will they judge the timeliness of making payments. So, if you are avoiding credit cards to just improve the score, be aware that it is not the correct decision. Instead, you should have a credit history of timely bill payments.

• Account Variation: The various accounts held by a person adds to the credit score. Try to have a loan account, a retail account, a credit account, etc. But again you have to ensure the timely payments. You should maintain a minimum balance in your accounts. It helps you get a decent score.

• Recent Credit Transaction: Reading the above point might make you wonder that if you don’t have many accounts, opening one before applying for a loan would be helpful.

But the answer is No!

Opening up too many credit accounts in the recent past showsthat you are in some financial trouble. But if you hold so many credit accounts for a longer duration and make timely payments, it might increase your score. 

How does a good Credit Score help you?

By now, you have a better understanding of how a credit score is calculated. And with further reading, clear your concepts on how a good score can be beneficial for you.

A credit score plays an important role in your financial life. When you just cross your teenage you may aspire to purchase a branded mobile phone or a sports bike.

Are you thinking about doing a post-graduation from a reputed college? Are you looking for students loan services?

After your marriage, you may have a dream to visit the most luxurious hotel with your partner for a lavish dinner and a night stay. Or you might think of opening up a business. You might also desire a luxurious car or a house of your own.

For accomplishing these dreams, you need money. But in most cases, people cannot afford it. Then the person thinks to apply for a loan. After submitting the loan application, the lending agency looks at your credit score.   

If a person has a good credit score, the agency approves the loan immediately and offers loan at a lower interest rate. But if the person has a medium credit score, then the person gets the loan at a somewhat higher rate of interest. Lower credit score makes you pay more dividends. In some extreme cases, the agency also rejects the loan application. And this rejection of loan application shatters your dream.    

In a nutshell, a decent credit score has a role to play throughout a person’s life. A student can secure admission to a good college and can pay the fees with a student loan. An entrepreneur can invest to establish his business. A newly married couple can buy a car, a house, or an opulent vacation for themselves.

How you Improve your Credit Score?

You should not be worried about your bad score even if it is lower than the bank’s threshold limit. Most of the people have limited financial knowledge. All times are not the same in a person’s life. Difficulties are the part and parcel of a person’s life. At some times he may have an abundance of money, while at other times he may fall short of money. It is good to accept the challenges of life and enjoy the life by overcoming these challenges. Old people used to say ‘where there is a will, there is a way’, so don’t be sad. There are options to improve your credit score.

Let us now understand how one can improve the credit score.

1. Monitor your credit Score– Keep checking your credit score online even when you don’t require a loan. With this, you will get to know about your credit ratings and the factors responsible for lowering and increasing your score. This provides you with a fair idea of potential risk factors. And from then onwards you can work on transactions that help you improve your rating.
2. Credit Utilization– Credit Utilization is defined as how much credit you are using out of the total credits. For example, the credit limit on all cards is $1000 and on average you do the transactions of $100 monthly, in such a scenario your credit utilization is 10%. Ensure to keep credit utilization as low as possible. Don’t use your credit cards excessively. You should try to minimizethe credit card use. This helps you to improve your scores.
3. Pay on Time– Try to make your payments on time- be it any utility bill or a credit card bill or a loan payment. Always ensure that you make timely payments. As we have read on the top, making atimely payment is the most important component and contributes maximum in a credit score calculation. 
4. Don’t apply for multiple credit cards– To decrease the credit utilization, you might think of applying for extra credit cards. But it is a risky step. Yes, your credit utilization reduces on one hand, but it adversely affects your credit score. It raises hard inquiries on your account which may last up to 2 years.
5. Don’t close unutilized credit cards– As long as you have a credit card and you have not used it and it is not charging you annual fees, keep it open. This is the wisest strategy. But if you close a specific account but owe the money in other accounts, your credit utilization increases and this affects credit score negatively.
6. Don’t Open New credit accounts unnecessarily– You should open an account only when you are in need. If you have too many credits, it shows that you are in trouble. It raises inquiries on your account. 
7. Dispute inaccurate queries– Examine your credit report. Verify all the accounts listed in the report. If you see any discrepancy or derogatory item on your credit report, get help from a credit repair specialist.

What role does 007 Credit Agent play when it comes to credit repairing?

We help you challenge the negative information on your report and to establish a new positive credit score. We are locally owned and provide the best credit repair services California with our expert agents and dedicated staff. We help you secure a good credit score with which you can apply for a loan at a much lower interest rate. We offer services at a nominal fee with no long-term commitments. 

Our credit experts analyze your report, consult with you to discuss a customized and best suitable action to reach your goal. Our team provides the best solution that works for you. Our bottom line is to increase your topline. Such work often takes some time to reach the goal, but we can assure you that within 90 days you can see changes in your ratings. Although it is difficult to guarantee the time duration because each person has a different report. Our team guides you to establish new positive accounts and payments with credit bureaus. 007 Credit Agent has a partnership with a lender that provides a guaranteed and secured credit card approval. As long as you are not in an active bankruptcy proceeding, it will approve you!  

Do you need your credit score report regularly? We provide you all three major credit reports and that too at a discounted price.

If you are going through a tough time in your life, don’t worry at all!

Our agents provide you financial education to manage your credit throughout your hard times. There are ways out to manage your credits efficiently during hard times. Some tactics can save your money and save your credit scores during financial fallback. To save yourself amid financial trouble, get help from one of our credit experts. 

With our guidance, you need notworry about the pesky debt collector’s phone calls. It is your legal right to protect yourself from the unscrupulous debt collection practices. Many times, you can cease collection activities because debt collectors don’t comply with consumer protection laws.

The FICO credit scoring model puts a significant amount of emphasis on the ratio of your credit card balances to their limits. If we enroll you in our credit repair program, we will manage the dispute processes on your behalf, but if you want to see your scores improve, start reducing your revolving balances.

Just to give you a flavor of our other services- we provide debt validation requests for collection letters. We offer goodwill letters for late payments. We also cease and desist letters.

If you need more information, visit our website- https://007creditagent.com/.

You can reach us at info@007creditagent.com.

We are available on call at +1 949-258-7026.