How to Remove a Closed Account From Your Credit Report

It is a popular belief that closed accounts are immediately removed from your credit report. That is a common misconception. Although closing an account restricts you from using it, it does not magically vanish from your credit report as your credit report contains information for all accounts whether they are open or closed. Closed accounts may still affect your credit score until they are finally removed. The good news is that it is possible to remove a closed account. There are three options: request that the creditor take it off, reach out to the three credit bureaus to delete incorrect data or you could simply wait until the closed account eventually falls off your credit report.

 

Closed accounts and your credit score

There are several factors that contribute to your credit score. These include your credit utilization rate, payment history, how old your accounts are, how frequently you open new credit accounts as well as what kind of lines of credit you use. A closed account may have a small or big impact on your credit score and that is based on whether there is still a balance left  as well as the type of credit account. If you close a credit card account, be mindful of your credit utilization rate going up as the credit limit on that account will no longer be available as soon as you close the account. This could be detrimental to your credit score as a higher credit balance with reference to your overall credit limit indicates a higher risk of not paying back your debt. Installment loans, such as auto loans, on the other hand do not have an impact on your credit utilization rate as credit cards, but they do have a positive impact on your credit score as long as you make regular on-time payments. The moment you pay off an installment loan and it is marked as paid in full and closed, the account can no longer boost your credit score; however, the payment history is still part of your credit history. All closed accounts, and it does not matter if they are credit cards or loans, can have a negative impact on your credit score if they have any derogatory marks, which include late or missed payments or were sent to collections. This negative information may remain on your credit report for up to seven years. Closed accounts that are marked as “paid as agreed” may remain on your credit report for as long as ten years from the time they are closed.

When to remove a closed account

Requesting to remove closed accounts that have negative information may be beneficial to your credit score as closed accounts with derogatory information will only damage your credit score further. It is worth noting that which closed accounts should be removed depends on the situation. If the account shows a positive payment history, it would not be a good idea to remove that account as the entire payment history may disappear from your credit report along with the closed account. If a loan is paid off in full, the creditor may remove the payment history of the loan after closing the account as creditors are not obligated to disclose account information to the three credit bureaus. If this happens, your credit score may drop by many points.

 

Paying off a debt may appear to be beneficial to your credit score, but it actually comes with its consequences. To potential creditors, you may seem to be less creditworthy due to the credit history becoming shorter and the lines of credit decrease. Therefore, it would be in your best interest to proceed with caution when removing closed accounts from your credit report and choose wisely which ones should be removed. Even though positive payment history may disappear from your credit history once an account is closed, not all is lost. You may contact the creditor and request that they reinstate your payment history.

 

Sometimes, it would serve you best just leaving a closed account instead of removing it if it demonstrates your creditworthiness. Nevertheless, requesting to remove closed accounts with derogatory information may be just what you need to improve your credit score. Understanding your options will facilitate the process.

Removing a closed account

Removing a closed account from your credit report is a whole process. There are a few ways to make this happen. You have the option to file a dispute when it involves inaccurate information, write a goodwill letter or, if all else fails, wait until the closed account is eventually taken out of your credit report.

File a dispute

According to the Fair Credit Reporting Act, credit reporting agencies are obligated to correct or remove information on your credit report that is incorrect; however, they will only do this if you file a dispute requesting to correct or delete inaccurate data. Disputes to the three major credit bureaus may be submitted online or by mail. Every dispute should include your name, account number, the reason you are filing a dispute as well as documentation that supports your reason for submitting a dispute. Once your dispute is submitted, the credit bureaus are required to review it and contact the lender or creditor to confirm that the information is indeed inaccurate. They have 30 days to complete their investigation and correct the errors if the dispute is approved. If the credit bureau removes the inaccurate information, they can only reinstate it if the lender or creditor provides documentation that the information was accurate and there was never an error.

 

Filing a dispute allows you to request inaccurate information to be removed; however, that does not apply to closed accounts if the information on your credit report is actually accurate. Initiating a dispute with the sole purpose of removing negative information that is accurate will not be considered, but there are still options to request that a closed account be removed from your credit report.

Write a goodwill letter

You might want to consider writing a goodwill letter politely requesting the creditor or lender to remove a closed account along with its credit history. It differs from a dispute as you may request negative information that pertains to a closed account to be removed from your credit history even though it is accurate. Nevertheless, the creditor or lender are not legally required to delete this information if it is accurate.

 

A goodwill letter may be an effective strategy when there are dire circumstances, such as severe illness or becoming seriously injured, which prevented you from working and making on-time payments on a credit card or loan. If you are able explain your unique situation that caused you to default on a loan or credit card and have shown positive payment history in the past as well as have tried to pay off your debt since then, the credit bureaus may consider your goodwill letter. It is worth a try.

 

If you defaulted on a credit card and your balance was sent to collections, you may take into account a pay-for-delete agreement with the collection agency. They may consider removing the collection account from your credit history in exchange for paying the debt in full or paying a lesser negotiated amount. This does not always work with all debt collectors as they are not legally required to remove any collection accounts regardless if you pay off your debt, but it is something to consider. Even if the debt collector does indeed delete the collection account, it does not mean that the negative information associated with that credit card will magically disappear as well. The original account with all the derogatory information that piled up before it was sent to collections will most likely remain on your credit report. Nevertheless, there will be less negative information to show on your credit report.

Wait until it falls off

Your options may be limited if the negative information on your credit report is in fact correct and the creditor or lender are reluctant to delete this information. Sometimes, the only option left is to wait until a closed account ages to the point that it finally falls off your credit report. Negative information on your credit report will eventually be removed from your credit history in about seven years and that starts from the moment an account was reported as delinquent and not when it was closed. It is a good idea to be proactive by checking your credit report a few times a year not only to be aware when closed accounts will be deleted, but also to ensure your credit history is accurate and monitor for any signs of identity theft before it becomes problematic to handle.

Stay on top of your credit history

If you defaulted on a credit card or loan and this was the reason for closing the account, requesting to remove the closed account will help you stay on top of your credit history. Negative information is detrimental to your credit score, but focusing on good credit habits moving forward, such as making payments on time and keeping accounts open and in good standing, will improve your credit score.

What Is Soft Credit Check?

For many people, credit is something that becomes essential at some point in their lives. Consider a scenario where you want to take out a personal loan to pay for medical or educational expenses. Perhaps you and your family are ready to take the next step and buy a home. In this case, you will likely need a home loan. Other examples of credit requirements include buying a car, doing some renovations at home, or even opening an account with a furniture store. – Pyramid Credit Repair

A credit check is part of the process that a company uses to provide approval for such an application. You are also able to request your own credit report which can be helpful and give you an idea of why a specific credit application was declined.

There are different types of credit checks that can be conducted. Soft credit checks are often used initially to provide pre-approvals, as well as when you decide to draw your own credit report. Here we will take a closer look at what soft credit checks are and factors as to why you should consider using this type of check on your credit record.

What Is Soft Credit Check?

Your credit score is important as creditors will use this as an indication of how creditworthy you are. To put this into perspective, if you have a bad credit score, then the likelihood of being declined will become more prominent. On the other hand, a good credit score can pave the way to a new home, car, and other credit applications you may find important. To help provide clarity on what the average credit score is, Value Penguin reported that 695 is the overall mean for Americans in general.

For many people a good credit score is something to be desired, however, there are many people who fall closer to the lower margin of the credit score zone. Unfortunately, those who appear to be on the lower end of the scale may struggle to gain credit as lenders may see them as a liability, so it’s important to keep your credit as healthy as possible to avoid this from happening.

Understanding what factors affect credit score is also important as credit checks can sometimes have a negative effect on your credit score depending on the severity of its findings.

This brings us to a soft credit check. This is a type of credit check that is commonly performed. In most cases where a soft credit will be done, there will only be a small number of cases where a company will need to proceed towards a hard credit check.

A soft credit check is the type of report that you get when you contact a company to draw your own credit record. This type of report shows an overview of certain factors related to your credit report and will generally provide an outlook on your current credit score.

There are some scenarios where a company or employee will request a credit check on your profile. In these cases, a soft credit check will usually be performed. It’s also very important to note that a soft credit check is sometimes called a soft credit pull or a soft inquiry so please be mindful when these terms are being used interchangeably so you do not get confused. Not only this, but you also need to authorize a third-party to perform a soft credit check on your profile.

The majority of cases where a soft inquiry is performed it will not be related to a credit application as creditors will generally require a more in-depth look into your credit record. This inevitably means they will require a hard credit check instead.

The great thing about a soft credit check is that it will not have a negative impact on your credit score. Additionally, there are multiple soft inquiries on your credit record which, fortunately, will not cause your credit score to decline and is the reason why many people will use a soft check when you have not applied for credit.

There will usually be a separate section on your credit record for soft pulls that are performed on your profile. However, these will generally not be taken into consideration by companies who analyze your credit record as soft pulls are unlikely to have an impact on your chances of being approved for a new credit application.

When Is A Soft Credit Check Used?

There are several examples of scenarios where a soft credit check may be used. For instance, the main example would be to request your own credit record through companies such as TransUnion, Experian, or any other credit bureau where you are able to request a report on your own credit record. This is a useful way of acknowledging what is going on with your credit record. Along with this, you can also identify any potential errors and report this to the appropriate credit bureau.

Each credit bureau has its own criteria for requesting a report. Furthermore, the frequency by which you can request a report differs from one bureau to the next. For example, with Experian, you can request a free credit report every month.

When you request a credit report from one of these bureaus, a soft check is done on your record. This means the check will not make any significant marks on your credit record since you did not apply for any credit. Conversely, when a mark is made on your credit record, it usually indicates an increased risk so you should not apply for too many credit applications at once.

There are other scenarios that call for a soft inquiry on your credit record too. Some of these examples can include:

  • Existing creditors may perform a routine soft check on your credit record.
  • Some creditors may perform a soft credit check in order to provide you with pre-approval on a credit application.
  • Some companies may also use a soft pull on your credit record to see if you qualify for specific offers.

You should also take into consideration that renting an apartment may come with a soft check and there are other cases where the rental agency will conduct a hard check on your account as well. Likewise, the same goes for opening a new bank account where some banks will perform a hard check on your record, while others would rather turn to a soft credit pull.

You can, of course, ask the company what type of credit check they will do. Additionally, any company that asks your permission to do a credit check should be able to tell you whether they are going to perform a hard or soft pull on your credit record.

By understanding the type of check done on your credit record, you should have a better idea of what to expect which means you can educate yourself on which credit checks will impact your credit score more than others.

How Does A Soft Credit Check Affect Your Credit Score?

When a company asks your permission to perform a credit check, you should ensure you have sufficient knowledge on how that action will affect your own credit score and be sure to ask the company about the type of credit check that they will conduct.

If the company reports a soft pull will be partaken, then chances are there is no need to worry. This type of check only provides the party that is requesting the data for an overview of your credit report where a copy of your credit score will also be attached to the report.

There is a specific section on your credit report that lists any particular type of soft inquiries that have been conducted on your profile.

Apart from an entry in this section, a soft check that is done on your credit profile will not have any other effects and you will not experience a reduction in your credit score. Moreover, these inquiries will only be stored in this specific section and will not be mentioned on any other part of your credit record.

Soft Credit Check Versus Hard Credit Check

When you apply for credit, want to rent a new home, or need to draw your own credit report, it’s important to understand when a soft or hard credit check will be conducted as they are both different, and each come with their own pros and cons.

Understanding the difference between a soft and a hard credit check is crucial. You should educate yourself on the differences before you authorize any third party to conduct a credit check on your profile. Not only this but understanding how each will impact your credit score should be a necessity as opposed to being nonessential.

A soft credit check, as previously explained, does not have a significant impact on your credit record. Furthermore, you will notice that there is a copy of these soft checks stored on your report as they go into a specific section called “Soft Inquiries.” Apart from this, the soft credit check will not have any other impact on your credit record.

A hard credit check, on the other hand, is quite different as it is the type of credit check that a creditor performs when you make a new application. It is a full credit check that draws your score and the history on your credit record which allows the creditor to gain a  deeper insight into your current credit health. In addition to this, it also provides an overview of your payment history, as well as a history of the previous checks that were performed on your profile.

This information allows the creditor to make a more accurate judgment on whether or not you can truly afford the new debt you have applied for. The information also serves as an important part of the risk analysis as the creditor will consider the fact that giving you credit puts them at risk of losing the money if you are unable to repay the debt that has been lent.

The creditor will usually have a team that considers the risk profile and payment history. This allows them to determine whether or not approval can be granted on the application that you have made.

The problem that you may have with a hard credit check is that it affects your credit record and will cause you to lose a few points. As well as this, many of these checks may cause you to lose about five credit points at a time thus making multiple applications for credit can cause your credit score to rapidly decline.

Another factor to consider is that a hard credit check also goes onto your credit record and any creditor who draws a report in the future will be able to see exactly where you have applied for credit. In addition, they will also be able to use this information, along with other data on your credit report, to determine whether previous creditors provided an approval or decline.

Having a number of hard credit checks on your credit record is also considered a negative factor as this can increase the risks associated with your credit application at the next creditor. In turn, this makes you more likely to be declined for the application you submit.

Should You Be Worried About Soft Credit Checks?

When you notice a credit check will be done on your profile, you may feel concerned as many people have heard that a credit check can affect their credit score. This is true, but only in some cases. So, it’s not always necessary to be concerned when a third party needs to conduct a credit check on your profile as chances are it is just protocol

As mentioned before, a soft credit check does not make a significant mark on your credit profile. Whereas a hard credit check causes you to lose a few credit score points. This isn’t the case with a soft credit check as soft credit pulls still reflect on your credit report, but in a specific section that generally does not affect the risk profile calculated when a creditor analyses your report.

There are also many reasons for a soft inquiry to be performed which is not always directly related to a credit application. For example, an employee may want to perform a soft credit pull in some cases such as applying for a position at a financial firm. You also have the right to see your own credit report  so if you request it, you are doing a soft credit pull from an appropriate bureau.

How To Manage Your Credit Inquiries More Effectively?

If you feel concerned about your credit record, particularly in terms of your credit inquiries, then there are a few tips you can follow. These tips will help you understand how to manage your own credit record more effectively and can also ensure you avoid getting a decline in your credit score due to a significant number of inquiries done on your credit profile.

Firstly, always make sure that permission is asked for a credit check and read the fine print of forms that you are asked to sign – especially if you are asked to provide your social security or identification number.

When you are asked permission for a credit check to be done, make sure to ask the third party important questions: such as what type of credit check will be done? As the third-party requesting permission will need to provide you with these details. Likewise, they will also tell you that a hard credit check or a soft credit check will be performed but it’s also vital to be wary of other names that may be used in reference to these discussions, so always look for terms that refer to“hard” or “soft” when being discussed further.

You should also try to limit the number of credit applications you make as when you apply for credit, some companies will only conduct a soft pull on your record. Although this will not bring your credit score down,  it will still be reflected under the “Soft Inquiries” section on your credit profile. This will only be provided for a pre-approval. A final hard credit check still needs to be conducted later on down the line which will reflect on your credit score and report.

There are also creditors who will directly move to a hard credit check if you apply with them for the first time, so if you make multiple applications in a short period of time, you will start to lose a lot of credit points.

Instead, consider looking at the companies that can provide you with the credit solution you require, then make an application with them and await a response. If the company has declined your application, then ask them for further details as to why it was rejected. This can help you understand why you were declined and even more so tell you what needs to improve on your credit record, instead of submitting your application to more companies.

Conclusion

Credit checks are conducted when you decide to apply for credit or when you request your own credit record. There are two primary types of credit checks that can be done on your record which are both known as soft credit checks,  and hard credit checks. A soft credit check will generally not have a serious impact on your credit report and will not affect your credit score. It is important to understand what a soft check is and what it can be used for and how it differentiates from a hard credit check.

 

What are the characteristics of the best credit repair companies?

A credit repair company is an organization you pay to help remove your information from credit reports. They help you improve your credit so that you can get more or higher loans from other lenders. These organizations are entirely legal in several states, and there is a credit repair organization act that helps to keep them regulated.

When you choose to hire a credit repair company, you expect them to do the following:

  • Remove any inaccurate or unverified information from credit reports
  • Identify any wrongful transactions so that they can help you remove them from your credit reports
  • Talk to you about how to maintain and improve your credit

There are several characteristics that you need to look at when you are choosing the best credit repair company.

Transparency 

You need to ensure that the credit company you use is reliable and will help you to get your credit records right. With so many scam companies on the market today, it is vital that you get the best since you are paying for these services.

A legit company will give you all of their information, including prices, before you hire them. Read their contract carefully and note any fine print so that you can go into the deal with open eyes. Talk to them about what you want from them and ensure that they do just that before engaging their services.

A proper company should be able to answer any question you have to your satisfaction. Make sure they provide you with a full list of services they cover before you hire them to work on your credit.

Affordable Prices

You don’t need to go into further debt trying to fix or improve your credit. This is why you should make sure that the credit repair company you choose is affordable and in your price range.

As much as you need to improve your credit, you might end up owing the credit repair company if you are not careful. Compare different companies and check their prices so that you can find the most affordable one.

The best credit repair company should be able to show you upfront what they will charge you for the services they are offering. Most of these companies will even have a price list on their website so that you can hire them knowing exactly how much you will pay.

Good Ratings

Like most companies, there are other people who have used their services before you. Most of them come back and leave reviews for other customers. Although they might delete any lousy reviews from their website, you might find other social media pages where customers have left their mark.

Use a company with great reviews so you can be confident they will perform the task at hand effectively. Find testimonials that are outside their website so that you are sure that they’re from former clients.

If you see too many bad reviews, you probably need to look for a different company to help you with your credit records. Please do not rely on one single review! Read several reviews so that you can be sure about their services.

A Full Contract

A credit repair company should provide you with a full contract before you hire them. Please make sure the contract is detailed and contains any important information before you sign it. There should also be a price list included in the contract to help you make an informed decision.

When you are satisfied that the details are in order, you can be sure they will stick to the contact you have signed.  Note that, in many instances, you will be paying upfront for these services, so you must make sure you choose the right company.

Money-back Offers

Any company that offers a money-back guarantee is considered legit. This type of guarantee gives you a sense of security so you can be confident that the company will work extra hard to provide the services you’ve paid for. Make sure such promise is included within the contract.

When you are confident that a credit repair company’s services will work for you, there’s no need to search any further. You will hire a company that will give you your money back if you aren’t satisfied. They will work hard to make sure that their customers are happy.

Illegal Requests

No matter how badly you want to get out of debt, you should not resort to illegal activities. If the credit repair organization tells you to lie or use illegal documents, you should find another organization to help you out.

The right firm should not make you do anything that you are not comfortable with. You don’t want to end up in jail or with a lawsuit when the creditors find out that you have lied or hidden any significant information. Take time and check the reputation of the company before you engage with them so they do not put you in a compromising position.

No Pressure

The best credit repair company should not use tactics that pressure you into giving out your information. They should allow you to learn more about them and trust them before they ask you for personal information to look up your credit reports.

If you feel that the company is trying to force you to give out information, you need to stop and look into hiring a different company. Remember that you will be giving out some sensitive information about yourself to these companies. You need to be very sure that you can trust them.

If your data is in the hands of fraudulent people, you may become a victim of identity theft and scams. Some of these scammers will actually resell your information to others who will use it for fraudulent activity. There is a distinct difference between sales and using pressure to make you hire a company.

They Do Not Offer A Quick Fix

Repairing your credit score is not an easy task. It also takes some time, so you need to be patient. A reputable credit repair company should be honest enough to tell you that there is no quick fix if you want to improve your credit.

If you notice that the credit repair company is offering a bunch of quick fixes, it should raise a red flag. Please do not fall for these trickeries because they will end up hurting your credit more.

Settle your debts before you seek to improve your credit. A good credit repair company should help you understand that.

Timeliness

Even though improving your credit might take a while, a reputable credit repair company should give you a timeline on when this might happen. They should explain how they intend to dispute the incorrect information and how they will help you establish good credit.

Any company that promises a significant raise in your score in a short amount of time is probably a scam. All the harmful information on your credit needs addressing, which typically takes even more information to correct. The organization will need time to make it all possible.

On the flip side, if the company takes too long before you see any results, then it may not be legit. You should be able to get a straight answer from them when they talk about their timelines.

Great Customer Service 

Make sure that the company you choose treats you right as their customer. From the moment you introduce yourself, observe how they treat you and other customers. If you notice they are not good at caring for their customers, you need to rethink working with them.

If you notice another customer being treated poorly, it’s likely they’ll treat you the same way, so you need to stay away. They should be professional and prompt when dealing with customer issues or even complaints.

Read reviews about the company and determine how they treat their clients so that you do not fall victim to inadequate customer care. Take time and ask former clients their honest opinions rather than relying on what is on the website.

Be careful not to fall for any scams as they usually lead to more debt. Be sure that any organization you give your personal information to is legit. Scammers are getting smarter and in order to outsmart them, you need to be very cautious.

Ask as many questions as you can. This will help you choose a company that will not drag you down further. Lastly, trust your instincts! If something does not sound right about a deal, then it’s probably not correct.

 

How to Increase a FICO Score?

A FICO score is an analytic notch that combines both human and artificial intelligence to help a lender decide whether to lend or issue a credit to a borrower.

It’s a three-digit number, ranging between 300 and 850, which lenders use to determine your capability of repaying the loan based on your credit information reports.

The FICO score was created by the Fair Isaac Corporation (FICO) in 1956 though the credit history started as early as the 1800s with most credit conducted by businesses and not customers. The financial institutions take advantage of this score to weigh the options of lending money to the borrowers from their creditworthiness history. Over time, lenders guided by this score developed criteria to issue a credit to debtors who had a positive credit history.

How The FICO Score Helps Lenders

FICO scores have been adapted into versions that lenders use to assess a borrower’s credit history and determine their eligibility to future loans. It has several variations: UltraFICO score, FICO ® Score 10, and 10T, among others, that a lender uses, but all converge to scoring the borrower’s ability to receive credit and repay promptly.

The scores take into consideration five fundamental characteristics to define creditworthiness. Alongside other details that lenders use to determine the borrower’s ability to repay debts, these five key elements take precedence.

Payment History

A borrower’s credit score is based on their payment history, with 35% of their credit score for each scoring model. This model is an indicator that shows if borrowers pay their bills on time or not. Borrowers with excellent payment history score higher to prospective lenders than those with a bad history.

The Current Level of Indebtedness

Debt levels are a good measure of a borrower’s ability to borrow more from other lending institutions. The outstanding debts and the flow of obligations determine the lender’s level of trust to extend more credit to a borrower. Government debt and an individual’s debt history with lending institutions are considered when determining whether a lender will end more debts when approached. The borrowers with low levels of indebtedness are at an advantage to scoring high on their FICO score to the prospective lenders than those with a high level of debt.

Types of Credit

A borrower’s ability to increase their credit limit is not only an opportunity to spend beyond their means but also a way of handling emergencies once they come knocking on their doorstep. A higher credit limit boosts a borrower’s FICO score. For a borrower to qualify for more, they must consider the three C’s of credit: character, collateral, and capacity.

Collateral

Collateral is what a lender accepts as security to extend debt to a borrower, which the lender can seize should the borrower fail to repay. It is the security for the credit issued. Typically, collateral is in the form of assets that can be sold to pay off the loan. The collateral should be easily convertible into cash to recover the loan.

Capacity

The lender will not extend credit to a borrower without confidence that the loan will be paid back. The borrower’s ability to repay the loan earns more points on the FICO scale. Lenders will scrutinize whether the borrower has been engaged regularly in a job that can sustain their credit use. They look at salary, other loan repayment history, and the number of dependents. Using these criteria, they determine the borrower’s ability to repay the loan.

Length of Credit History

Any lender is required to know how long a borrower’s account has been open and active. A borrower with a free and active account will score higher on the FICO scale than the contrary. An account with a good payment history and no default history will also score higher. The lender uses credit scoring algorithms to calculate the average age of a borrower’s accounts.

The most noticeable effects of a borrower’s credit score are determined by:

Credit utilization. A borrower should not use more than 30% of their available credit. Average credit history of your accounts will give useful details about this.

Payment history. Once the credit is extended to you by a lender, make sure that you pay on time. This credit history will add a positive FICO score for you as the borrower.

New Credit Accounts

A borrower who has many credit accounts is considered less reliable on the FICO score. There is a higher risk of lending to a borrower who has opened several new credit accounts in a short period of time. The lender risks losing their money to this kind of borrower, especially if they do not have a long credit history. Therefore, it is advisable that a borrower refrains from opening too many new accounts at one time in order to sustain their average account age. This earns positive points toward the FICO score and increases opportunities for loans.

How To Increase A FICO Score By A Borrower

Now that we’ve examined what a FICO score is and what lenders look for from a borrower’s credit history, we can underscore what is required of a borrower to increase it.

Do not open new accounts too quickly

A borrower should maintain the same credit account for a long time to secure trust in the lender. Opening new accounts too promptly decreases confidence by the lender to extend credit. Regardless of how long a borrower has had a positive credit history, opening new accounts lowers their FICO scores. Therefore, increase the FICO score by maintaining an average account age.

Besides, an account holder ought to assess themselves using their credit reports to ‘rate their shopping’ from the lender. FICO considers the age of your account and scores your eligibility to acquire more credit.

Check your credit reports for inaccuracies

Obtain a financial statement from your agency and check for any inaccuracies or incorrect information. Dispute any errors from the report and make sure your credit report is accurate. If a failure in your financial statement could negatively affect your creditworthiness, fix it with your agency so that you do not appear riskier to a lender. The negative errors on the reports could cost you the ability to obtain loans in the future and increase associated interest rates. Increase your FICO score by eliminating common mistakes in your account.

Pay bills on time

35% of a FICO score’s calculation is based on your ability to pay bills on time to lenders and creditors. Use payment reminders on your bank’s portal to alert you when the due date nears for repayment. You can also set up automatic payments with your bank and loan lenders to make transactions from your accounts. By having a clean record of on time payments, you will increase your FICO score.

Reduce the debts you owe

A FICO score’s calculation bases your financial discipline on the amount of debts you owe. If you keep your balances low on credit cards but have an overall high amount of outstanding debt, you will score low. Therefore, it’s advisable that you reduce your current debts before reaching out for a new one. Having many debts does not decrease your score, but the FICO score looks at the overall ratio of money you owe to the amount of credit available.

Every borrower wants to obtain some sort of loan for their specific purposes, whether it’s to start a business, grow their business, or other intended use, and they expect that if they apply, they will get a positive response. On the contrary, every lender wants to extend a loan to a reliable borrower with confidence that it will be repaid in full, promptly, and efficiently. It is in this dilemma that borrowers and lenders want their intentions addressed without flaws. A borrower should maintain a FICO score between 670 and 739, with 670 being the minimum and the latter being the maximum. This range indicates “credible” credit history, and both lenders and borrowers are happy issuing credit and getting repayment promptly.

 

 

 

How To Improve Your Credit Score Fast?

The credit history of a borrower is a base for lenders to extend loans to the borrower. Therefore, borrowers should position themselves where lenders will undoubtedly give credit to them without fear or favor. Their credit history should be flawless. Convincing a lender that you will repay the loan promptly is the key to winning the loan. It is up to the borrower to determine how to improve their credit score fast so they can secure opportunities to obtain even more credit and the lender to work in their favor.

What is a credit score?

The credit score model was designed by Fair Isaac Corporation and is used by lenders as a consultation tool amidst other credit-scoring systems that exist. The score is a range of numbers between 300 and 850 that portrays a borrower’s creditworthiness. The higher the score, the better it is for the borrower and vice versa.

Potential lenders consult a borrower’s credit history before determining whether they offer credit or not. They assess the likelihood that an individual will repay loans successfully. The metric used to calculate a credit score is credit consumption or the current credit availability percentage.

It is then in the borrower’s best interest to keep all accounts active and open to maintain their credit score and work towards improving it. Borrowers with credit scores below 640 are referred to as subprime borrowers. Lenders do not extend much credit to them as they are considered a greater risk than those with higher ratings. Borrowers with scores greater than 800 are considered excellent.

From a borrower’s perspective, your credit score dictates whether you will get approval to obtain credit and what interest rate you will be charged on the loan.

How To Improve Your Credit Score Fast

The following are some tips that can help a borrower to improve their low credit score fast.

Correct errors in your credit report.

As a potential borrower, always request your credit report from your agency. Print it and save it to your workstation. Scrutinize all the details. If there are late payments or unpaid bills, fix them as soon as you can with the respective agency. You may need to borrow for an emergency, but you will be out of luck if your credit report denies you the chance. By keeping track of your reports, you increase the chances of scoring high enough to obtain credit.

Become an authorized user.

If you’re unable to secure a loan on your own, you always have the option of becoming an authorized user on another person’s account. This can improve your credit score fast to leverage your reputation in the eyes of the lender. Ask someone with good or excellent credit if they are willing to entrust their account to you. Be up front about your intention to be added to their account to improve your creditworthiness and not necessarily to use their credit. The moment he agrees and adds you as an authorized user, you will earn confidence from the lender.

A three-month credit report will reflect the primary cardholder’s good credit history and this consequently improves your credit score.

Raise your available credit.

By raising your available credit, you improve your credit score fast enough to merit obtaining loans quickly. There are various ways of doing this and getting approved quickly.

  • Do not be greedy or overly demanding. Make a polite, non-pushy request to your lender for a credit increase. If it works out in your favor, you will enjoy an improved credit score and obtain a fast approval for your request.
  • Apply for a new card with a higher credit limit. A new card with a higher credit limit will entice your lender and secure your approval for a loan. You can obtain this by making an inquiry with your credit card issuer to increase your credit limit. If the issuer asks why you want a raise in the limit, be honest and explain that you want to improve your credit score fast.
  • Plead your case, but do not be desperate to get approval. Seeking to improve your credit score fast does not mean that you should do anything for the favor. Do this only if you are unable to pay on your balances and retain your credit score. This presents you as liable to obtain more credit in the future.
  • Ask about a balance transfer. You can raise your available credit by transferring some of the balance from one account to another account. By increasing the account credit, your score will speak for you. Later, you can refund the transfer after receiving a better credit score.
  • Wait for an increase to occur naturally. Get approved fast when your credit limit increases naturally. Through your upright history of repayments and borrowing, the credit agency will naturally increase your credit limit and alert you.

Reduce the debt-to-income ratio.

To improve your credit score fast, increase the amount you pay monthly towards your debt. This extra payment lowers your overall liability and gives your score a boost. Avoid taking on more debts that might be challenging to pay. Additionally, postpone large purchases on your credit card. These all play a part in improving your credit score fast in the eyes of your lender.

Negotiate outstanding balances.

Unpaid bills and debts can really deteriorate your credit score. You can rectify this by approaching your lenders and creditors to negotiate a way of repaying the debts. This agreement should be in writing. On the contrary, you can settle the debts by paying a large lump sum, resolving it, or revising payment plans with the debt settlement manager. This will repair your credit score and improve your credit score fast.

Make minimum payments on time.

If you aren’t already, start being consistently punctual in making minimum payments to your lenders. You may not necessarily have that lump sum available to offset your debt, but you can remain on top of the game by maintaining a timely payment schedule. The credit score calculator will not disappoint you. You can improve the credit score fast based on the amount you owe versus how much credit you have. Therefore, owe little and have a lot of credit for the ratio to work to your advantage. This ratio is the credit utilization ratio that favors a borrower who pays down debts quickly to lower the ratio and quickly improve their credit score.

Pay twice a month.

Potential creditors will look at your monthly statement to determine your credit score. Repaying your debts twice a month as opposed to once a month gives you an edge on your credit score. By reducing balances on revolving accounts, you will enjoy fast and improved credit scores.

Apply for credit only when necessary.

The main objective of obtaining credit is to address a financial need, an emergency, a development need, or other pressing issues. The lender decides on the risk of offering credit and that consequently impacts the rate of interest. Therefore, it is advised to apply for a loan only when necessary and avoid interest charges at the risk of being unable to pay back the loan. From a creditor’s view, a borrower who has a good reason for applying for a loan earns more on the credit score than one without. This also portrays a borrower’s good financial discipline.

Use your credit cards responsibly.

It is highly advisable to use your credit cards for needs and not wants. Avoid the common temptation to misuse your credit card and you’ll also avoid the possibility of weakening your credit score. Observe these simple tips to use credit more responsibly.

  • Learn your credit score and work on improving it regularly.
  • Do not close all of your accounts if you want to maintain or improve your score.
  • Never close accounts with high-interest rates as this reflects your inability to repay your lenders.
  • Use credit cards for small purchases periodically. This displays your financial discipline and lenders borrow your eligibility information from this scorecard.
  • Never skip a payment. Always honor your payments as in agreement with your creditors.
  • Stay under 30% of your total credit limit. This will increase a creditor’s confidence in lending to you.

Request to have all negative entries removed from your credit report.

A history of late payments on your credit report looks bad to your lender. It may be tricky to obtain a loan or credit based on this bad report. Any unpaid collections and late payments will negatively impact your credit score and should be addressed. Understandably, presenting a credit report with negative entries when seeking consideration from lenders won’t have positive results.

The good news is, you can negotiate with your agency to have all negative entries removed from your credit report so you can present an excellent report to your lenders. Convince your agency to show the account as paid or remove it altogether to reflect the right image in your favor.

A borrowing credit journey is unique for everyone. The lenders rightly apply many criteria in deciding the creditworthiness of an individual borrower. Many factors affect the credit score for different borrowers, but all should be addressed regarding how they present themselves. The credit score should be subjected to each borrower and not wholesomely since the factors that apply to most borrowers will not always impact credit scores in the same way to another borrower. The bottom line is that each borrower is required to improve their credit score fast enough to secure financial legacy in the eyes of the lender. It is worthy to note that your credit score and an examination of your creditworthiness directly determines how much or how little you might pay for your loans.

How to Get the Highest Credit Score Possible

Attaining a perfect credit score is not easy. But having a good score will save you money in terms of interest over time. For VantageScore and FICO, the highest credit score is 850. Their scale ranges from 300 to 850. If your rating is above 720, they will consider it a good score. However, it can be difficult to maintain a perfect credit score every month.

Even if you are consistently responsible with your credit habits, do not be surprised if you don’t get a perfect score. Your scores are bound to fluctuate as they represent your credit profile. The ratings are broken down into poor, fair, good, very good, and excellent. The only way you can achieve the perfect credit score is by using your credit lightly, paying on time, not opening a new account, and having extended credit history.

Generally, older people have higher scores than younger folks. Having a score of 850 is excellent, and you will have bragging rights. Still, a score of 800 and above is exceptional. With this score, you will have access to reasonable rates on auto loans, credit cards, and any other loan.

Pay On Time

Be careful with your payment history as it heavily influences your credit score. In fact, payment history is the most influential factor for VantageScore and FICO. To ensure you always remember your repayment obligations, set up a reminder. Alternatively, you can opt to enroll in an automatic repayment system.

Timely payment applies to all of your bills, including rent, utilities, and phone services. The question many people ask is: what if they made late payments some years back. In response, while missed or late payments stay on your report for up to seven years, their impact on your score will decrease over time.

After two years, very few negative items have an impact on your score. Just keep making your payments and, ultimately, you will achieve the perfect score.

Monitor Your Scores For Any Inaccuracies

Errors and identity theft may derail your progress in having a good credit score. It’s important to get your credit score often, monitor your credit, and buy credit education tools. There are several credit reporting agencies where you can get your report at least two times a year.

If you notice something inaccurate in the report, you should write a dispute letter to all the credit bureaus. There are three: Equifax, Experian, and Transunion. The increase in your score after a dispute depends on the impact of individual reports. If you had late payments earlier, disputing one inaccurate amount will do little to change your credit score. However, if you can prove that several accounts were opened falsely in your name, there will be a considerable change in your score.

Keep Credit Utilization Low

If you want to determine your utilization rate, you should add credit limits to all of your cards. When you are spending lower than your available credit, your credit utilization rate will also go down. You should strive to use less than 30% of your available credit.

Be Strategic When Taking New Debts

Credit scores consider all of  your outstanding loans and your total credit card balances. Generally, it is a great idea to keep your debt load low as it improves your score. Applying for new credit every time will make lenders think you are not able to handle all the debt.

However, you should not avoid getting new loans if the purpose is right. After all, the main reason you build your credit score is to ensure that you get financing when necessary. As long as you prove you are responsible and never fail in your repayment obligations, your score will stay intact.

Finally, you need to think critically before closing an old account. Having an available balance will help you with your credit utilization ratio. Additionally, old accounts help your report and also boost your credit score.

Do Not Make It A Habit To Cancel Cards

You should have one or two credit cards that you always keep active. You should not cancel them as they will help you creating a long credit history. Additionally, it will help you have a low rate of credit utilization. Having many credit cards means you have more credit available. A high credit score is for those who have a lower credit utilization ratio and long credit histories.

Consider Your Credit Mix

The different types of loans in your history is worth considering. The scoring models look into how you responsibly manage the different types of loans, credit cards, financing, and mortgages. If you want to diversify your investment, you should consider taking low-interest loans.

Moreover, if you have avoided credit cards, you should open one to charge a small amount every month and pay it off immediately. If you have an attractive credit mix, you will be able to have a high credit score. Avoid taking any financing that you do not need.

Limit Your Hard Credit Inquiries

Every time you apply for new credit, it will generate a hard credit inquiry. When you apply for a new loan, it is interpreted that you are having financial troubles. The hard questions bring about a negative effect on your score. Only apply for new credit when it is vital and avoid hard credit inquiries.

Importance of Understanding the Credit Score

For most people in the U.S, the credit score falls below 620. In fact, 40% of individuals under 30 years old have a score of less than 620. 25% of people under 30 have a score of 630 to 680. Only 2% have a score of above 780. This clearly shows there is plenty of room for improvement to get a good score.

Understanding how the credit ranges work is vital in giving you the knowledge and motivation to improve your score. A good score will provide you with the financial ability to have better interest rates on loans, credit cards, and mortgages.

Is it Necessary to Have the Perfect Score?

You may be wondering if it is essential to have a perfect credit score. While it’s certainly great to have a credit score of 850, it may not be realistic. Besides, having an excellent rating will give you the same benefits as a perfect score.

Theoretically, the highest possible score is 850. Nonetheless, only about 3% have achieved a score of above 800. Furthermore, less than 2% of people below 30 years of age have a score of 780 and above. In other words, it is almost impossible to have a score of 850.

When you apply for a mortgage or buy a car, the lender uses your credit report. They expect you to fall into a specific category. The interest you qualify for will not change if you are within a particular range. For example, if you are eligible for a 4% interest rate, it will not change until you reach the next tier of the credit score range.

What is The Range?

It is common for many people to wonder what the range is. For FICO, their credit score range is 300-850. Having a score above 720 means your score is good. Additionally, FICO offers industry-specific scores such as auto loans and credit cards that range from 250 to 900.

Below are FICO’s credit score ranges:

  • Poor credit: below 500
  • Fair credit: 580-649
  • Good credit: 650-719
  • Very good credit: 720-799
  • Exceptional credit: 800-850

Lenders know the higher your score, the lower the risk. Nonetheless, no rating says whether you will be a bad or good customer. The FICO reports are just based on statistics and past undertakings.

Why the Credit Score Ranges Matter

You do not need a perfect score to get reasonable rates on your mortgage or loan. If you have a score above 700, you are safe and will qualify for low interest rates. With a score above 770, you are assured of some of the best rates out there.

Credit card companies and banks do not care about the specific numbers you have in the reports. They are more concerned about your broad credit score range. An example, if you improve your score from 750 to 790, very little will change on your interest rates offer. Both of these scores fall in the same credit range. However, moving from 630 to 700 means you will get better offers on the interest rates. You do not need to obsess about every single point to achieve the highest possible score. Moreover, it is not advisable to open a new account if you have a score of 800 or above because you already qualify for the best terms.

A Score of 800 and Above

Having a score of 800 will not give you the perfect score, but it will undoubtedly give you an exceptional credit score. It will also provide you with the same terms of the loan with someone who has a score of 850. Here is what people in the 800 club have achieved:

  • They use only 7% of their credit limit.
  • They owe less than $3000 on their credit cards.
  • Their credit history is over 25 years.
  • They do not have late payments.

Benefits of Knowing Your Credit Score

You must know your credit score if you want to understand the possibilities that come with raising it. You will see clearly what you qualify for and how it affects the interest and repayment period. You will also better appreciate the kinds of improvements you can make to raise your score.

Conclusion

Whereas having the perfect credit score is not a requirement to have the best rates for mortgages and loans, it will come in handy in the long run. Improving your scores from poor to good, or having them move from good to excellent, will make a big difference. By following the correct credit habits, you will improve your scores. If you are lucky to reach 850, you should consider it a bonus. You will be among the very few to achieve it!

 

Credit Repair Houston

The average credit score for citizens in Houston is about 642, however, Texas in general is considered to be at the bottom line when looking at state-based averages of credit scores. Not only this but in Houston alone, the average household has approximately $5,418 in credit card debt.

There are cases where gaining credit becomes a necessity. This subsequently causes some people to create more debt than they can truly afford which then leads to late or even missed payments. Ultimately, this type of financial behavior causes your credit score to drop and add several negative factors on your credit report.

Credit repair Houston services can help you regain control over your finances. Even if you have no outstanding debts that are owed, but are still unable to qualify for a new credit agreement, these services are designed to lend a helping hand. Let’s take a look at what credit repair services can offer you and your financial situation.

What Can A Credit Repair Houston Company Do For You?

The primary objective for any credit repair company is to provide you with a beneficial solution that helps improve your credit score. It’s also no secret that a low credit score will, more often than not, equate to increased declines in applications. With this said,  many people do not realize that creating new applications on a frequent basis can lead to further declines in their credit score which can become a nuisance, especially when the credit is drastically needed.

Repairing your credit record is not an easy task either, which is why using the services of a credit repair Houston company can not only be beneficial but potentially life-changing for you and your family.

These companies have skilled experts that are able to work closely with you in regards to the process of improving your credit score and record. Moreover, there are several things that can impact your credit score which is why the process can be very problematic at the best of times. This is why the experts at a credit repair facility understand exactly what to look for and how to manage any given situation effectively and efficiently

When said experts look at your credit record, they are able to immediately point out any issues that are contributing to your low credit score and advise on a feasible solution that financially aligns with your circumstances.

How The Process Works

If you are looking to use the services of a credit repair Houston company, then it’s important to understand how the entire process works.

It generally starts with a simple, no-hassle consultation where many companies will be able to offer you a free initial meeting so they can advertise their expertise and how they can help you. This is an important interaction between you and the credit experts at the company as it will potentially decide if you should pursue their services or look elsewhere.

During the consultation, the credit expert will ask you a few details where you will also be required to disclose your social security number to them. This will enable them to request a credit report on your name and the credit expert will then ask your permission to request a copy of your credit report. Now in most cases, a soft inquiry will be made at this point in order to give the credit consultant an overview of your credit record without causing you to have an even lower score.

The credit repair expert will then thoroughly analyze the credit record that was drawn, along with your credit score whilst taking every notable aspect of your credit report into account. This allows the credit repair consultant to see what factors are causing you to be declined during applications with creditors. This will also allow them to determine why your credit score is so low and therefore be acted upon with appropriate measures.

Once the analysis of your credit report is complete, the credit expert will provide you with a detailed explanation of their findings so you can then decide if you wish to proceed with their services or not.

A dedicated account manager is often provided when you decide to take advantage of the credit repair services offered by the company. The account manager will then help you devise an intricate plan of action that can be put forth from this point onwards. This plan will be focused on rectifying any previous monetary mishaps in aid of transforming your current state of financial affairs so your credit record can flourish.

The manager will list out all the factors that are negatively impacting your credit record which will help give you a better understanding of why your situation brought you here. Additionally, the action plan will continue to follow after this stage.

The company might also need to submit certain documentation to credit bureaus. However, these documents may dispute certain things that are currently negatively affecting your credit score. Not only this but when accepted by the credit bureau, the entry on your credit report could possibly be removed.

The process may take more time than originally anticipated, however,  being patient and following the action plan provided by the credit repair company will subsequently pay off in the end.

How To Choose A Credit Repair Houston Company?

There are a couple of companies that offer a credit repair Houston service so it is vitally important that you consider all of your options to help ensure the company you choose can provide an adequate service for you.

Always consider the expertise and experience of the companies services you are seeking to use. Furthermore, you should attempt to find a credit repair provider that has been offering its services to customers for several years and has a reputable reputation within the industry so you can trust the services you are actively seeking or using. In addition to this, I would look for testimonials from previous customers that have also used their services so you can gauge an overall understanding of their credibility and expertise in order to formulate a proper decision.

It would also be useful to gain a free consultation but be warned, not all companies offer this feature so please be wary that a free session is not universally administered in this sector. However, if you do find one, it can help you gain a better idea of how the company would be able to assist you. For this purpose, setting up a meeting with a credit expert at the company will allow them to analyze your credit record effectively Conversely, you should always consider the action plan that the company suggests you follow before adhering to it in its full entirety so you can ensure it can be easily achieved.

There are a few important questions you should ask during this process too. One of which is to ask the credit repair expert who is analyzing your record how long it will take for results to be visible. In this case, most companies will be able to provide you with at least some degree of improvements in your credit report within two months. Along with this, I would also advise on asking about specific guarantees that come equipped with the services provided by the company.

Conclusion

A low credit score means you will likely be declined for any credit applications you submit which can be worrisome when you are in urgent need of credit. So, if you find yourself growing tired of being declined, a credit repair Houston company may be the solution for you and your finances. These companies are there to help dispute any negative elements on your credit record whilst the experts within said companies are hired to devise an appropriate action plan in aid of improving your overall credit score.

Best Ways To Improve Credit Fast

If you are in need of a loan or would benefit from a lending limit increase, you need to ensure that you improve and maintain good credit. Lenders will refer to your credit score before they loan you money for anything you need, from credit card to car loans.

To qualify for a higher loan limit, you need to improve your credit score. This will determine whether a lender will give you the loan you requested. There are several ways you can improve your credit and get more from lending companies.

The following are the best ways to improve your credit score, which then increases the confidence financial institutions have that you will repay any debts:

  • Pay all your bills and debts on time
  • Pay off all other loans you have
  • Get your credit report and dispute any unusual activity
  • Open an account with a different credit company
  • Make minimum payments frequently
  • Become an authorized user
  • Ask your credit card company to increase your limit
  • Use and keep your cards open

Pay Your Bills

It is crucial for people who want to improve their credit score to pay their bills on time. You need to show lenders that you are trustworthy and that you are the kind of person who does not neglect paying their bills.

If you have any loans, you need to ensure that you make timely payments and that you make all the payments according to your agreement with the lender. This will assure any financial institution or credit company that you will promptly pay any loan you take from them.

Paying off a loan before the agreed term limit is also beneficial. This will significantly improve your credit because it will show that you are reliable and credible. If you are late on any payment, you need to pay as soon as possible to ensure that it is current.

It’s crucial to pay everything on time from student loans, rent, and even utilities to prove to lenders that you are not a risk.They will consider all of these before they qualify you to take a loan from them. Lending companies will get access to any other loans you might have, which might also affect your credit.

Pay Off Any Outstanding Loans

To improve your credit, you should pay off any other outstanding loans. When you pay off your debt in full, it will improve your credit and you also pay a lower amount in interest. Preferably, whenever affordable, pay off any loan you have or keep your loan payments current.

Lenders like to see consistency when it comes to repaying any debts from car loans to credit cards. When you pay your bills in full, you prove to your lenders that you will not fail to repay any loan they offer you.

Anytime you apply for a loan at any institution, they take a look at your credit score. It will determine how much they are willing to lend you. If your credit score is low, you will most likely be offered a lower amount or limit and, in most cases, higher interest rates. Some of the loans that might lower your credit score are:

  • student loans
  • automobile loans
  • mortgages

Pay off these types of loans so that you can be in better standing with lending companies. You’re going to need it if you want to qualify for a bigger loan or higher credit limit.

Dispute Any Unusual Activity On Your Credit Card

Always get a copy of your credit statement so that you can review all purchases. If you notice any unusual activity, report it immediately. Contact the credit card company with the pertinent information so they can investigate and remove the charge.

In some instances, you might find out that there was an error. It is only when you identify and dispute it that the company can do something about it. Ask for your credit reports and make sure that you point out any inaccuracies. Inaccurate reports can unfairly lower your credit score, and prevent you from qualifying for more credit from lenders.

You can get a free credit report at least every 12 months. Some companies offer them more frequently without impacting your credit score. Be sure to check as often as possible to catch any unusual activity. Give the credit bureau time to make any investigations they need, and then they will remove the discrepancy from your report.

You will be able to get a refund if there is a mistake that the company committed when charging you. Keep your receipts so that you can have evidence of any purchases or returns that you made using the credit card.

Open A Different Account

Some credit card companies take a long time to increase your credit, even if you are regular on your payments. You might want to open a new account with a different company to see if you can get a higher credit limit.

However, you should note that this is only possible if you have been consistent in paying your loans. Having too many accounts will also not look good for you. Many people make the mistake of spreading credit on many cards, and they, in turn, find it challenging to repay the debt. This can drag your score down too.

Compare the credit limits and terms, then choose one that is best for you so that you will not have multiple cards.

Negotiate

Many people do not know that you can negotiate with a credit card company. If you have a substantial outstanding balance, you can make a request that the company reduce your interest so you can pay it off much faster.

Be sure that any past mistake with your payments does not affect your current credit score. If you are willing and able to pay a lump sum amount, most lenders will waive the remaining interest to pay off your loan. Talk to your lender and find out what they can do to help so that you can pay your loan and improve your credit.

Use A Credible Guarantor

If you need someone to co-sign your loan, you’ll want to be sure that they have a high credit score. This is vital for leases and even car payments since someone else’s bad credit score can also affect you.

If you co-sign a lease or loan for anyone else, remind them to pay on time so that your credit score is not affected. Do not cosign a loan for a person if you are not sure that they are suitable for the payments – you’ll both end up with poor scores.

Increase Your Credit Limit

If you are not up to date with your payments, you can call the credit card company and ask them to increase your credit limit. This will give you more time to pay your loan, and it will not seem like you are too late on repaying your credit.

After the credit limit is increased, do not use the new credit so that you can just pay what you owe. Be careful when you are using credit; overspending can also lead to bad credit scores and then you will not be able to improve your credit faster.

Become An Authorized User

If you have little credit experience, you can ask a friend or a family member to add you to their card as an authorized user. The person should have a long credit history so they can ask for a higher credit limit. This will allow you to also qualify for a higher credit limit and improve your credit instantly.

If you choose to ask a person with bad credit, then you also risk damaging your credit. Do your homework and find out if the person’s credit record will be beneficial to you.

This can also be favorable for couples because you do not have to actually use the card. You simply reap the benefits of their good habits and credit score to improve your credit.

Keep All Your Credit Cards Open

When you close any of your credit cards, you lose the credit limit on that card. It can be challenging to improve your credit score if you do not have any credit available. Keep your cards open, use them occasionally, even if it’s not your preferred payment method.

You need any limit you can get when you want to improve your credit, so make sure that you keep the cards open and keep them active. Do not forget to promptly pay them off so that your score does not lower. Do not request too many credit cards though, because this can negatively affect your credit. Only use credit cards that you know you will pay off quickly.

When you are using your credit cards, ask for a higher credit limit. You do not have to max out a card before you pay it off.

Make Payments More Frequently

Sometimes, you might not be able to pay your loans monthly as you have agreed with the lenders. You might consider making small payments throughout the month so that by the end of the month, you will have paid off the monthly installment.

These payments are called micropayments, and lenders will accept any kind of payment you want to make. When you pay regularly, your credit will improve faster than when you delay payments. This is beneficial to people who get payments daily or weekly. Once you receive your paycheck, you can set aside a percentage to pay off your loans.

No matter what method you use, you need to be sure that you keep your credit score high. This will build trust and give you more credit when you need it. Avoid taking on unnecessary loans and co-signing for people who are not reliable.

Do not miss any payments and try as much as you can to pay off loans before the repayment period is over. Avoid having more debt than you can comfortably handle.

How to Increase Credit Score Quickly?

A new apartment, dreams of your own home in a decent neighborhood with good schools, or the growth of your business – these are the investments we often leave up to credit. Nearly half of American adults, accounting for 47%, have substantial credit card debt. And approximately 20% of the U.S. adult population have been late with payments in the last twelve months. Despite the average good credit being on the rise, many people are still struggling to make payments on time and find themselves hopeless in the battle with bad credit.

If you googled “raising your credit score fast” and were brought here – you are in the right place. We constructed a comprehensive guide to help you understand credit, its scoring system, and provide you with the essential knowledge to boost your creditworthiness in the eyes of a potential lender.

Let’s start from A to Z:

Introduction to Credit

“Treat yourself Premium,” “Buy what you eyed,” “privileged membership” – those are all brilliant slogans attacking consumers each and every day. You see the large billboards calling your name to open another account and treat yourself to the possessions you cannot afford. Credit is undoubtedly a modern wonder of the world that may help you experience a better life or make a living hell on earth. This is why so many people fall into the trap of spending vast amounts of money that they cannot repay. The illusion of keeping your personal bank account intact while indulging in whatever life has to offer often leads to troublesome circumstances, causing your credit score to drop.

Credit is an essential part of life. Responsible handling of your finances, including loans and credit lines, is often crucial for survival. For those and many other reasons, you need to start from the basics and understand the factors that may bring many sleepless nights.

 

The 5 C’s Creditors Use to Evaluate You

What are banks looking for when evaluating your candidacy for credit or a loan? Yes, you are being assessed even long after your education ended. But this time, your grade is based on a meticulous system designed to generate a three-digit number that will guide potential lenders in their decision-making process.

It’s time you become acquainted with the big 5 C’s of credit:

Capacity is essentially your cash flow. Lenders want to assess whether your income or business will be enough to repay the loan while also considering personal expenses and other debts. Besides cash flow, your previous payment history is a good indicator that you may live up to your promises by committing to your financial obligations.

Character evaluation doesn’t require personality tests or psychological tactics to give lenders an insight into your true self. Instead, they look for factors that make you a good asset. If you are applying for a loan to support or grow your business, the “investors” need confidence in your ability to succeed. They will consider your background, education, skills, industry knowledge, experience, and criminal record.

Be prepared for your credit history report to be thoroughly examined. It might be a good idea to obtain free records before setting an appointment with the potential creditor. By scanning your credit report, you can catch any inaccuracies or delinquencies that may be questioned and provide an explanation that may grant you the loan despite a lower credit score.

Condition is one factor that you have minimal control over if any at all. Lenders assess the current market situation, including the general economic health and the prospects of your industry. The type of work you do may have an impact on the decision, evaluating possible layoffs, and current industry trends. Typically, you are more likely to get a loan during expansionary periods, when the economic conditions are more favorable.

Capital is your overall commitment to the loan you are pursuing. If you are seeking a personal loan, be ready to provide some comfort in the form of a down payment. Businesses are usually screened for any personal investments into the enterprise.

Collateral is the bank’s security in case you cannot repay the loan in the future, which basically means the bank can step in and take what is lawfully theirs. Collateral could be your car, equipment, or any real estate.

 

Overview of the Credit System

Before the era of electronic purchases, banking and obtaining a loan were executed in a face-to-face manner. It consisted of persuasion tactics, proof of employment, and personal references regarding your character. During that time, banks were secured with a borrower’s collateral, but with the rise of electronic purchases, securing a loan became much more complicated. Hence the emergence of credit reporting and scoring, which were designed to help financial institutions gather a collection of your activities and establish consumer creditworthiness.

Between the 1950s and 1960s, institutions started working closely to come up with a way to share consumer data, including payment history and account balances. Before three key players appeared as credit reporting leaders, TransUnion, Equifax, and Experian, early credit bureaus were strictly related to local communities.

To legitimize the business, Congress passed the Fair Credit Reporting Act (FCRA) in 1970 to ensure proper handling of consumers’ data. It wasn’t until the 1980s that a more comprehensive approach was taken, and credit bureaus commenced an electronic method of storing consumer personal and credit-related information.

 

5 Surprising Ways Credit Affects You

In a perfect world, financial matters would only affect the finances – your ability to get a loan or a mortgage on a house. Unfortunately, there are other ways your credit can affect you.

 

Getting and keeping a job

Even though it is a myth that your credit score affects your employment, your credit report might be screened by potential or current employers. Like lenders, the company may want to assess your character and confirm you are financially responsible without carrying the burden of debts. Employers may evaluate your credit report only with your written consent to make a hiring or promotion decision. The screening of your credit report as a hiring practice is not exercised in all states.

 

Renting an apartment

A few property managers and landlords may ask to review your credit before approving your application for an apartment. While you may still rent an apartment with poor credit, you may be required to place a larger security deposit.

 

Acquiring a cell phone

Without a doubt, the latest technology has skyrocketed, and so did their prices. Expensive cell phones may be purchased in installments with or without a down payment. The carrier may perform the same assessment many creditors do to ensure you are able to make timely payments over time.

 

Establishing utility accounts

Again, utility companies may employ the same process of credit report screening as abovementioned providers. Before you open an account with gas, water, or power, your credit may be assessed to ensure you can pay your financial obligations. If you suffer from poor credit, you may be required to secure a deposit.

 

Insurance payments

Sadly, your insurance premiums may be based on your credit in some states. As outrageous as it sounds, our country is not known for making things easier in the healthcare department either. The insurance score, however, differs from your typical credit score, but it is solely based on your credit report. On a positive note, if your credit history is outstanding, you can use this to your advantage to negotiate better terms and premiums.

 

How Much Good Credit Saves You

Having a flawless and excellent credit score can save you a lot of time, hassle, and money. Low credit score contributes to sleepless nights, stress, poor health, lower quality of life, and many other devastating life circumstances.

Previously, we listed all the surprising ways credit can affect you, which, when reversed, can be to your benefit. With a substantial credit score, you will have better opportunities when renting an apartment on favorable conditions, landing and keeping a decent job, having a better chance at being promoted, and getting great insurance with reasonable premiums.

An adequate credit score will get you better rates on car and homeowners insurance as well. The assessment relies on credit-based insurance scoring, which relates to the management of your finances. Car insurance providers, such as Nationwide, may evaluate risky behaviors based on how you handle your money. If your credit score is impeccable, you can fight for beautiful rates with tons of savings.

Lower interest rates on all loans is a great advantage of having that perfect credit score. Whether you are looking to upgrade your car, remodel your home, or get a personal loan, adequate credit will generate many savings and better conditions.

It is no surprise that many credit card providers offer a rewarding system for their users. The better your credit, the better the perks and rewards you can access. Cardholders can enjoy free access to exclusive events or streaming services. You may opt for travel benefits if you prefer the adventure and gain points for miles, sometimes even fly for free.

Your reputation is on the line with dropping your credit score. By rebuilding and establishing a spotless credit, you are increasing your chances of a brighter future. Banks will not reject your application and offer agreeable terms in case your life takes an unexpected turn.

 

Understanding Your Credit Reports

Your credit report is an integral part of the entire loan approval process. Understanding its components may help you prevent future financial mishaps and detect any inaccuracies that may hurt your credit and, consequently, lower your credit score.

Your credit report contains your personal information, such as your name, address, and Social Security number. In addition, credit bureaus collect the information related to your borrowing activity, including your inquiries, payment history, and balances on all accounts.

 

Who Maintains Your Credit Information

Who maintains your credit information and who is responsible for keeping it fair and square are two separate questions. While creditors and credit bureaus work together to maintain and update all of your credit information, it is your responsibility to ensure all the data stored is accurate and up-to-date. Unfortunately, even in a high-tech world, mistakes and oversights still happen, which may have a substantial impact on your creditworthiness. You would be surprised how often mix-ups occur on credit reports, varying from errors of your personal information to outdated entries and false items.

 

How to Get Your Credit Data for Free

Now, let’s get to the point. The first step to rebuilding your credit and raising your credit score quickly is to obtain your credit reports. You can get your credit data for free once every 12 months from the three nationwide credit reporting bureaus. The only federally authorized website is annualcreditreport.com, where you can securely order your credit reports.

 

How to Review Your Credit Reports

Besides catching any inaccuracies, regular monitoring of your credit report can safeguard you against fraud. Your credit report’s annual review is a significant step to achieving the credit score of your dreams.

First things first, start from top to bottom and inspect your personal information. Some common mix-ups include misspelled or incorrect name, address, phone number, altered Social Security number, multiple or inaccurate birth dates, and incorrect or outdated employment status.

Another section refers to your accounts, open and closed. Look for all unrecognized accounts under your name, including revolving and installment accounts. Check if all closed accounts that are listed do not appear as active. Incorrect payment history is another major contributor to your overall credit score, such as a current account marked past due. Make sure that you are the account holder of each account listed on your credit report and if all limits and balances are accurate. Inspect your credit report for all utility, phone, and streaming accounts.

Inquiries refer to all hard inquiries when creditors pull your credit report. Common issues include an unauthorized drawing of your data, which may indicate fraud.

The public records section contains everything related to bankruptcies, liens, foreclosures, or civil suits. Check if the information provided is accurate and whether you have been involved in these processes. Make sure that any outdated entries are removed from your credit report.

 

Disputing Inaccurate Credit Information

The Fair Credit Reporting Act is your lawful shield in protecting your information and correcting any inaccuracies on your credit report. Under the FCRA, lenders and credit bureaus are accountable for fixing any caught mistakes.

You may use sample dispute letters available online to inform the credit reporting company about any inaccuracies that you noticed on your credit report. Provide copies of documents that support your case. Your letter should include your full name and address and identify each item you want to dispute. In addition, provide an explanation as to why you wish to dispute the entries with a request to remove or fix the faulty data. To make matters easier, include your credit report with the highlighted items and send the letter via certified mail.

It might take up to 30 days for credit reporting agencies to investigate your case. They will communicate on your behalf with the creditors or lenders that furnished the questioned information to the credit bureaus, and the providers must examine the dispute themselves. If all goes well, the furnishers will inform all three nationwide credit bureaus that a mistake has occurred. You should also expect a notice from all the parties on the status of your request.

Keep in mind that the process may take months, you may have to provide additional or missing information, and have patience and determination to continue your attempts. Credit dispute is a lengthy and time-consuming process, so don’t expect overnight changes.

Talking with creditors may be quite intimidating, especially if you do not possess the appropriate knowledge of the industry. It may require negotiation skills, diplomacy, and polite boldness to get what you want. If you find yourself unfit for the job, you may seek help from reputable credit repair companies, who specialize in the field, have expert knowledge, understand the market, and have a long-lasting relationship with financial institutions. It may save you time and money in the long run, provided you find the right match with an unblemished reputation. Despite the popular opinion, legitimate credit repair companies exist and follow all guidelines under the FCRA. Some may even provide credit counseling with personal account managers to help you build a better, brighter future.

How Long Do Black Marks Stay in Reports?

On your credit report, black marks or derogatory marks are all negative items, such as missed payments, collections, or bankruptcies. Here is a breakdown of all possible negative entries and the typical period they remain on your credit report:

  • Missed payments – 7 years
  • Charge-offs – 7 years
  • Collections – 7 years
  • Repossessions – 7 years
  • Bankruptcy Chapter 13 – 7 years
  • Bankruptcy Chapter 7 – 10 years
  • Student delinquency or default – 7 years
  • Foreclosure – 7 years

Essentially, nearly all negative items remain on your credit report for up to 7 years, except bankruptcy Chapter 7, which may be active for up to 10 years. If any of the entries on your credit report seem outdated, do not hesitate to dispute them, as they do continue to hurt your credit score and keep you at bay with creditors.

 

How to Build and Maintain Excellent Credit

Building and maintaining an outstanding credit does not have to be a lengthy process consisting of stress, emotional roller-coaster, and constant rejections from lenders. You may start working now and improve your credit score in no time.

 

Your Account Payments

Missed or late payments may seem innocent, and if it is a one-time occurrence, your creditors might oversee the mishap. However, your forgetfulness or the inability to pay off your debt constitutes a large portion of your overall poor credit score. If your payment is late the entire billing cycle, usually 30 days, you may experience a significant credit score drop by up to 100 points.

Life is unexpected, and sometimes, despite your efforts, you may find yourself unable to pay the balance on your credit cards or loans. If that happens, such as the loss of a job or sudden death of your family’s provider, don’t be afraid to communicate your challenges with creditors. They may help you get back on your feet and make you an offer that can save you from further trouble.

Avoid late payments at all costs, even if you have to make minimum payments every billing cycle.

 

Your Available Credit

The credit utilization ratio is your overall revolving credit versus your current debt. Typically, your credit usage should not exceed 30% on all of your accounts, and your available credit should be at least 70% at your disposal. Maxing out your credit cards will do you more harm than good, so you might want to reconsider your spending habits and reanalyze whether the purchase is, in fact, necessary.

If you cannot repay your financial burden at once, do more than paying the minimum amount each month. One way to get out of debt faster and improve your credit utilization ratio is to consider the micropayment approach. Instead of making monthly payments, make smaller payments but more frequently. If your minimum amount is $25, pay $10 every week, which not only shows creditors that you are seriously committed, but you are also putting in more than the minimum payment without sacrificing your budget. Remember that you most likely have interest rates on your credit cards or loans. If you end up paying the minimum on your account each month, chances are you will not see a significant improvement in your balance.

 

Closing Credit Accounts

You paid off your credit card and decided to close it before you fall into another trap of unwanted purchases. It’s time to rethink that decision. Closing your credit card affects your credit utilization ratio as your total revolving credit drops as a result. Instead, keep the account open to maximize your credit’s potential. Make sure that the terms of your credit agreement do not specify closing the account due to inactivity. If that is the case, make small purchases from time to time, such as pumping gas or buying a cup of coffee, and pay off your dues immediately.

 

Using a Secured Credit Card

Getting a secured credit card might be the best option when it comes to building or repairing your credit, provided you know how to use it responsibly. Secured credit cards differ from your typical credit cards as they require some cash deposit before opening.

Find an issuer with a deposit you can afford and shop around for the best terms. Secured credit cards are easier to obtain but can be corrupted the same way regular credit cards do: by maxing out the balance and not making timely payments.

 

Your Credit Inquiries

If you want to check your credit score without hurting it, make soft inquiries that do not affect the scoring. However, shopping around for a credit card and applying wherever you can will, in effect, cause a significant credit score drop. Those are called hard inquiries, and they do impact your credit and get reported to credit bureaus.

 

Your Mix of Credit

Another way to build your credit quickly and effectively and raise the bothering credit score is to mix up your credit a little. Instead of opting exclusively for retail credit cards, take out a personal loan that you can pay off on time. Maybe you need to upgrade your car? Try coming up with a sufficient sum for a down payment and shop for the vehicle you want and can afford. Mixing up your credit shows lenders that you can handle any type of financial commitment, be it installment loans or a mortgage. The point is not to get yourself into more debt but rather keep meticulously calculated expenses for a specific purpose.

 

Final Words

Your credit is your baby. Without proper care and management, it will not flourish and repay you in the future. Taking care of your finances and changing your financial habits are essential components of getting on the right track. Remember, you don’t have to do this alone. Qualified and legitimate credit repair companies can help you achieve your ultimate goals.

 

How to Remove Hard Inquiries?

Disputing hard inquiries from your credit report is a lengthy process requiring your full cooperation with the credit bureaus and the lenders that furnished the information or made the inquiry. Removing hard inquiries is a complex task that demands a thorough analysis of your credit report, determination, and a lot of patience. Generally, valid hard queries cannot be lawfully removed from your credit report unless fraud is suspected, such as identity theft. If hard inquiries on your credit report are justifiable, they will disappear naturally after two years.

Under the Fair Credit Reporting Act (FCRA), the three nationwide credit bureaus – Experian, TransUnion, and Equifax – are required to present any performed hard inquiries, or “hard pulls,” on your credit report. Consumers are entitled to review their credit file for free once every twelve months, enabling them to monitor any changes and dispute all inaccuracies.

Here’s everything you need to know about hard queries, how they impact your credit score and creditworthiness, and the possible ways of disputing them on your credit report.

 

What is a hard inquiry?

A hard inquiry occurs when lenders check one or more credit reports on your behalf upon loan application. Creditors need to determine whether you are the right candidate before extending you a loan. To find out whether you meet their criteria, they pull and inspect your credit report. The act itself lands on your credit file for future potential lenders to see when and what was attempted. The more hard pulls on your credit report, the more risk you carry as a potential borrower as it may indicate your financial instability.

Hard inquiries prevail on your credit reports for two years, and after that time, they should vanish naturally.

 

Hard inquiries versus soft inquiries

Hard inquiries enter your credit report whenever you apply for a credit card, loan, and other financing options. A soft inquiry, on the other hand, occurs when you pull your own credit score for your own record. A lender can also perform a soft credit check in order to determine whether you qualify for a loan, which often happens during the pre-approval process.

Unlike hard inquiries, soft pulls do not affect your credit score in any way. Although some soft inquiries do show up on your credit report, they are not taken into account when considering your candidacy for a loan. They also play no part in calculating your credit score.

 

How does a hard inquiry impact your credit score?

It is important to understand that not all hard inquiries are created equal, and some may not even affect your credit score. Prospective lenders pay more attention to the number of hard inquiries on your file than to a specific single pull of your record. Before attempting a larger purchase, you may shop around for better terms and conditions of the loan. In that case, whether it’s a car loan or a mortgage, you may see many various queries on your credit report. If you apply for the loans within the period of 14 days, the credit scoring model will combine the inquiries as one on your credit file.

A credit pull by a potential lender, whether you get approved or not, may affect your credit score by 5 points, meaning you may see a drop in your credit score. You may experience a more substantial impact if your credit is poor, while consumers with better credit scores may not be affected by a single hard inquiry. Even though hard inquiries find their rightful place in your credit report and stay there for two years, the drop in your credit score is temporary and usually bounces back within the next few months.

 

How to Remove Hard Inquiries?

For hard inquiries to be removed before they expire on your credit report, the entries have to be inaccurate or based on fraudulent activity. The best way to avoid the damages of identity theft or credit reporting errors is to monitor your credit report periodically. You are entitled to free credit reports from all three credit bureaus annually. Reviewing it section by section can help you gain insight into your financial behavior and catch any inaccuracies, including faulty hard inquiries.

 

Review Your Credit Report

Your credit report is your financial resume. It contains all activities of the past seven years, the entire most recent credit history. Stephen R. Bucci, the author of “Credit Management Kit for Dummies,” compares your credit report to your dating profile, which ultimately determines what kind of date you deserve. The same applies to your credit profile and the type of loan you qualify for.

 

Understanding Your Credit Report

Understanding your credit report is essential before you attempt reading it like a pro. Every single section of your credit file can contain potential mix-ups and errors that ultimately damage your credit and lower your credit score.

Your credit report begins with personal identifiable information that needs to be carefully reviewed, including your date of birth, social security number, complete name, and address. Errors in the birth dates, name, or multiple social security numbers are some of the most common inaccuracies found in a credit report.

Another part of your credit report relates to your payment history, account balances, credit limits, and all activity associated with a given account. The main aspects to check for include any closed accounts that remain open, inaccurate balances and credit limits, unauthorized users or owners of the account in question, or current accounts labeled as late or delinquent.

 

Look for Unauthorized or Incorrect Hard Inquiries

The same rule applies to reviewing the inquiries section, where mistakes also happen. Check if all listed inquiries are, in fact, authorized by you to ensure no attempt of fraudulent activity was made. Even though the Federal law requires the inquiry to stay on your credit report for two years, expired, hard pulls may still remain on your file. Those can be easily disputed.

If the information is accurate and you did inquire about a given credit or loan, those hard queries cannot be disputed and will remain on your credit report for two years as a faithful representation of your credit history.

 

Not all questionable inquiries are false.

Although the names of some companies on the list may seem unknown or suspicious, it is not an indicator that fraud or error took place. If the list is long, again, it does not prove that a mistake has been made.

If you used the services of a loan broker, who was looking for the best rates and loan conditions, he was most likely submitting applications on your behalf to various creditors. This could result in numerous inquiries authorized by you, even if you ended up with a single loan.

 

What to do when you suspect fraud?

If you think that because hard inquiries do not significantly affect your credit score, you should leave suspicious entries as they are, think again. Any unauthorized activity on your credit report most likely indicates identity theft or other types of abuse of your personal information. If you presume fraud, act quickly and contact all credit bureaus with your concerns.

Even if someone did not receive a loan in your name, they might be luckier next time. Besides reaching out to credit reporting agencies, additional steps should be taken to prevent further issues:

  • A fraud alert on your credit reports will minimize the risk of granting a loan to an unauthorized user in the future. You, and everyone else using your social security number, will be questioned to establish your true identity.
  • Federal Trade Commission should be notified about identity theft.
  • Do not skip filing a police report.
  • In extreme cases, it might be wise to do a credit freeze or credit lock.

Every piece of information on your credit report should be screened for possible fraud, and that includes your personal information and inquiries. Despite having a minimal impact on your credit score, these are vital components that need regular monitoring for possible abuse, misuse, or inaccuracies.

If a mistake has been made or an unauthorized user pulled your record, you have a right to dispute all wrong information on your credit report. Whenever a hard inquiry is made on your account, the creditors need your permission to do so; otherwise, it is subject to removal.

 

File a dispute with the credit bureau

Whenever you file a dispute with a corresponding credit bureau, they are responsible for thoroughly investigating your file. Working closely with your creditors, all valid disputes will have to be corrected on your credit report.

Because you receive three credit reports from different credit reporting agencies, all three files need to be checked for accuracy. You may find similar items on each credit report, but some may differ quite significantly. When filing a dispute, consider doing so with all credit bureaus. When your credit reports are combined, they generate your credit score based on the information provided within the files. Your potential lender may look at one report or consider all three when determining your creditworthiness.

While platforms such as Equifax or TransUnion provide an option for dispute directly on their website, mailing your request the traditional way might work for your advantage. The online tools are limited, and by providing an accurate dispute letter to the credit bureaus, you can contain more information about your specific case.

You can find templates of dispute letters online or use the services of a reputable and legitimate credit repair company, which will be able to handle more in a shorter amount of time. A respectable credit repair company has industry experts who will monitor all activities and ensure your data stays safe. A precise course of action is usually drawn during a free initial consultation, where you will be assigned your personal account manager.

 

What’s Next?

How a hard inquiry affects your credit and score depends on many variables unique to your case. People with strong credit may barely feel the impact of hard inquiries, while someone with a low credit score and previous financial misfortunes may experience the burden of inaccurate or valid hard queries on their file.

Whether you are suffering from a poor credit score or not, regular monitoring of your credit report is always recommended to ensure everything is in its rightful place. Unauthorized inquiries not only hurt your credit but are an open road to potential fraud. Annual credit report check provides you insightful information about your credit, financial situation, and unhealthy spending habits.

 

Frequently Asked Questions

Here are the most commonly asked questions by our consumers about credit inquiries:

 

How can I get inquiries removed from my credit report fast?

While you may be tempted to jump into disputing all negative information in your credit report in bulk, it is essential to understand what hard inquiries mean for your creditworthiness and fully understand the concept of your credit report. The only way to remove credit inquiries from your credit report is by drafting a dispute letter to all three credit bureaus. Make sure that you find the queries to be unauthorized or wrongfully entered into your credit file. Otherwise, they will not be considered for dispute. Along with the letter, attach all supporting documents that you can come up with to prove your case. Credit reporting agencies have 30 days to investigate your request in collaboration with the corresponding furnisher, aka your creditor. You should be notified of any changes to your account after that time. Follow up with the credit bureaus if you do not receive any response within the next 30 days.

 

How do I remove hard inquiries from TransUnion?

You may follow the same route highlighted above or use the TransUnion online tools to open a dispute. In addition, Credit Karma members have access to dispute errors on your TransUnion report by utilizing the Credit Karma Direct Dispute tool.

 

How many points will my credit score increase when a hard inquiry is removed?

Unfortunately, the impact of removing a hard inquiry will not be… impactful. After one year of making the query, its impact on your credit score is minimal, if any at all. After removing a hard inquiry, you may see a few points boost in your credit score or none at all, which is often the case.

 

How do I stop hard credit inquiries?

In a perfect world, there would only be one answer: minimize your loan or credit applications. In other words, do not inquire about a loan if you are not in immediate need of one. Start from repairing your credit before you attempt any significant credit inquiries.

Unfortunately, in a digital world, you may not be the only one inquiring for credit on your behalf. Fraud does happen more often than not. To minimize the risk of your credit being abused by an unauthorized person, monitor your credit report frequently to ensure no illegal activity took place.

 

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