According to the Education $1.61 trillion in outstanding debt. If you have student debt, you must be asking yourself this crucial question — How will removing student debt from my credit profile impact my credit score?
You can not remove a student loan from your credit report; however, you can have certain negative information removed. Not having it removed is a good thing because if you make all your payments on time, you will have a positive payment history on your credit report for ten years, which means a good credit score.
However, late student loan repayment remains on your credit account for seven years, damaging your credit report. And you will have a hard time getting financial approvals in the future.
When you review your credit report, check all three reports since their information may differ. Look for late payments and other negative marks that should not be there. If you find any mistakes or outdated information, dispute them with the credit reporting company and ask for them to be removed from your credit report.
Have you tried to file a dispute and failed? If yes, you can try to remove the default status on your student loan, and here are some ways to do this.
A student loan rehabilitation program helps you erase the default status on your student loan. The process takes ten months, and if you make nine on-time monthly payments within 20 days of the due date, your loan will have a good standing.
After the ten months, you will repay on income-driven loan repayment terms. You are also eligible to apply for temporary postponement through loan deferment or forbearance.
You can also send a goodwill letter to your lender if you have been making regular on-time payments but defaulted along the way due to a hardship. The goodwill letter is an emotional appeal to your lender, asking them to remove late repayment entries. However, for this to work, your story has to be convincing while explaining what happened, and you must have paid your debts.
You can check if you are eligible for student loan forgiveness if you can’t wait for the seven years to elapse, and you have been repaying your loan. Check the Federal Student Aid website to find out if you are eligible for student loan forgiveness.
If all others fail and you want to have a good credit score, one sure way is to pay your student debt in full. This helps you qualify for mortgages, car loans, and other loans with good interest rates because your credit score will improve.
Many lenders see student loan debt as a negative factor to consider when making lending decisions. This is particularly true of mortgage lenders, which generally view student loan borrowers as riskier than those without student debt. It’s certainly possible to get a mortgage with student loan debt, but you’re likely to pay more for it than someone without any outstanding loans. Pay your student loan if you want to have a positive credit report!
The impact your student loans have on your credit score depends on several factors, including:
Age of your loan. A long history of loan repayment has a positive impact on your credit report. Lenders see you as someone who knows how to manage finances and will consider you when you are looking for financing. However, you have to ensure that you are paying your loans on time.
Whether or not you’re current on the loan. If you’re “in good standing,” meaning you’re making payments on time and staying current with any other requirements, that will have a positive impact on your credit score. If you are consistent in repaying, outstanding student loans have less of an impact on your credit score.
However, if you’re not in good standing, that has negative consequences for your credit score. The good news is it will only stay on your credit report for seven years. However, if you are looking for financing from lenders, you will be seen as a high risk. If the lender still chooses to give you a loan, it will be at a higher interest rate than those with a good repayment history.
How much you owe. The average student debt balance in the U.S. is $37,113 as of 2022. If you don’t owe much and have a good history of making payments on time, your credit score won’t take a significant hit from holding onto that loan.
But if you owe a lot and have a spotty payment history or haven’t made any payments toward what you owe, your credit score will be hurt. If that’s the case, paying off your student debt can help improve your credit score if you pay it off in full and on time.
A sure way to raise your credit score fast and have a good credit score is to make your student loan payments as agreed. If you don’t make payments as promised, your account could go into default, and your balance may be submitted to collections. This means your credit score will most likely take a hit.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
The Fair Isaac Corporation (FICO) mentions that credit inquiries are only 10% of your FICO score. However, a significant number of inquiries reduce your score by several points. It is important to have and maintain a good credit score to enjoy the benefits that come with it. Learn how to remove credit inquiries from your credit report and what credit inquiries are.
When you apply for a credit card or loan, the lender looks at your credit reports. They will determine whether to approve you for the account. The result is an inquiry on your credit report, which can temporarily tank your score.
There are two types of inquiries:
Hard inquiries occur when you take out new credit or loans, and these always affect your score. If there are too many inquiries on your report, it sends red flags to lenders as to why you are seeking so much credit. According to FICO, each hard inquiry knocks about five points off your score, although this amount varies depending on several factors, such as good credit history.
Soft inquiries occur when someone checks your report without your knowledge, such as an employer conducting a background check. They could also be credit checks that you do on your own, and they don’t affect your score.
The impact of credit inquiries on your score doesn’t last forever. After two years, the effect drops off, while hard inquiries affect your score for only twelve months. However, if you’re struggling to repair your credit, waiting two years to see an improvement in your scores is no fun. Fortunately, there is a way to remove inquiries from your credit reports.
Lenders use hard inquiries to check if there is a loan that will impact credit repayment for a loan you are applying for. Credit lenders see you as a risk if you have over six inquiries on your credit report. They know you are more likely to declare bankruptcy than those with no inquiries.
Can someone remove credit inquiries from their credit report? If you have several hard inquiries within a short period of time, it could be a sign to lenders that you’re having financial difficulties, and they may deny your application based on this.
According to the Fair Credit Reporting Act (FCRA), credit bureaus should inform consumers whenever there is a hard inquiry on their credit report. Creditors should inform by noting the inquiry in their credit files. This helps you note any inaccuracies in your credit report.
If you see any hard inquiries on your report that you didn’t authorize, dispute them with the three major bureaus. They are TransUnion, Experian, and Equifax. They’re required by law to investigate within 30 days of receiving a formal dispute request.
However, you’ll need to provide documentation of the circumstances surrounding the inquiry, such as an identity theft report or other documentation. When you submit your letter, make sure to provide your full name and address, your social security number, and a copy of some form of identification, such as your driver’s license. You should also include copies (not originals) of any supporting documents.
If it is a legitimate error on the creditor’s part, it shouldn’t be too difficult to resolve with proof. If someone has committed fraud using your identity, however, it may be harder to get everything resolved in a timely manner.
You can do nothing about inquiries that appear for legitimate reasons on your credit report. They are updated every 30 days by the creditors themselves.
You can only dispute a hard inquiry if you keep an eye on your credit score. When you regularly check your credit score, you will note any drop in your score since you can detect a drop in your score that you didn’t authorize.
Ensure you review what is listed and watch out for any suspicious activity, such as a bogus account that has gone unpaid.
Removing credit inquiries from your credit report requires you to work with the creditor and reporting agencies. Remember, you can only remove hard inquiries that you did not authorize. If you authorized any hard pull, you have to wait until they fall off naturally in two years.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
If you have collections on your credit report, there’s no doubt you just want them to go away. This is because they may be weighing down your credit score and preventing you from getting loans or qualifying for better interest rates. While we have some tips to help you remove collections from your credit report, you should know that it’s going to take time and effort on your part.
To understand the need to remove collections from your credit score, it is important to understand how collections come about. What are collections? When a debt isn’t paid, the creditor will turn it over to a collection agency or a debt collector in hopes of recouping the money. That action is then reported to the credit bureaus— Experian, Transunion, and Equifax.
Collection agencies will continue to report your collection account for seven years from the date you first fell behind with the original creditor. However, if it’s been seven years, the collection agency might still sue you to collect. But they can’t report it to the credit bureaus.
If your collection account has already dropped off your report, there’s no way to get it back on. However, if you pay off a collection and then re-default, that account could come back onto your credit reports (even if the original delinquency was outside the seven-year reporting period because the new late payment would create a new delinquency date.
If your collection account has over $2500, it can affect your credit report by at least 20-25 points.
The short answer is, Yes! According to Aaron Huebner, the executive director of Ascent Network, there are two keywords that you need to keep in mind as you try to remove collections from your credit report— Verify and Validate.
The federal government requires credit bureaus to provide correct information on each item on your credit report. They also have to make sure that the debt has not expired. Here is a case:
If the amount a collector is trying to collect from you is below $1000 and isn’t from a financial institution, you may have some success asking for proof of the debt. Why? Because the law requires collectors to provide proof of the debt if you ask for it within 30 days, and since the debt might have gone through so many collection agencies, they may not have the original documents, which will prompt them to remove the collection from your credit report.
Remove Collections from Your Credit Report( How to Do It)
For you to be successful, you have to do these three things:
? Check your credit report
? Check for errors in your credit report
? Choose an action plan
Check Credit Report
You have to check your credit account from AnnualCreditReport.com and review your credit reports to see if the information is correct. The report should show if the collection is paid or not, the remaining balance, the date you defaulted, and the original creditor.
Compare the information in the credit report against your records. You can check your payment records when you log in to the account listed if you don’t have the records. And know the statute of limitations for collecting debts in your state.
Dispute Any Inaccuracies
In case of an error on the part of the debt collector, ask them to validate the debt. You should dispute the collection within 30 days from the date the collector contacted you. If the collector can’t validate, the collection should be removed from your report. However, you must follow up to ensure they remove the collection from your credit report.
You should also dispute the collection if the debt is too old to be reported. The federal law in many states requires that any delinquent account should be removed after seven years. If you can still find a delinquency report showing up after seven years, you should file a dispute with the credit bureau that still shows it to have it removed.
Request for a Goodwill Deletion/ Pay for Delete
Have you been making regular on-time payments? If yes, the first step is to mail the collection agency and ask for a “goodwill deletion.” If you have been making regular on-time payments, mail the collection agency a “goodwill letter” and explains your situation. This goodwill letter should explain to the collection bureau that you are trying to buy a house and see if they can honor your request.
There is no guarantee that they will accept your request and if they do, be sure to follow up to ensure they have removed collection from your credit report.
Pay for delete often works if you’ve had only one collection on your credit history. The collector should comply if you pay in full and make a written request that they remove it from your credit reports.
When negotiating pay for delete, it is best to visit the credit collection agency and have the agreement in writing. You can negotiate to pay 30% of the money owed in exchange for deletion and then continue to pay the debt as per the agreement. Remember, a late payment on the debt will be reported as a new entry in your credit report.
Professionals have years of experience repairing credits and know the exact procedure to remove the collection from your report. A credit repair agency like The Ascent Network has for many years helped many improve their credit score, remove collections from their credit reports, and are thus best-suited to help you, should you feel the procedure involved is confusing.
It is possible to have collections reports removed from your credit report if you are keen enough. You have to ensure that the collection agency validates and verifies the collection report they have on you. Failure to which they will have to remove the collection from your credit report. We hope that the above information will help you improve your credit score, remove collection from your credit score, and ease your mind.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
When people are just starting out building their credit or want to improve their credit score, often the fastest way to get started is by becoming an authorized user on someone else’s credit card. An authorized user is a person who has permission from the primary account holder to use the account. While authorized users don’t have to make payments on most accounts, they can still take advantage of their share of the credit limit.
An authorized user is someone who is added to a credit card account by the primary cardholder. The primary cardholder is responsible for making payments on the account while you get the authorization to use the credit card.
For example, you have a credit card, and your son, Tom, wants to have his credit card. You can call your bank, ask for an additional card, and tell them that you want Tom as an authorized user. They will send you another credit card, which you can give to him.
Once Tom makes purchases using that card, the information about those purchases will show up in your credit report and in his credit report. That way, both you and Tom are responsible for the debts on that account.
An authorized user gets a credit card tied to the account but won’t make changes to the account. This means they don’t have the authority to add other authorized users or request a credit increase.
Authorized users are often spouses, children, or other family members of the primary cardholder. By adding an authorized user, the primary cardholder enables another person to purchase using the primary cardholder’s account.
Your credit history is built from many different aspects of your financial life, including:
? payments (both on time and late)
? credit limits
? account balances
? length of time the accounts have been open
? types of accounts (credit cards, student loans, mortgages, etc.)
? new lines of credit opened
When another person adds you as an authorized user to their account, you are given access to that card. All of the payment history and credit limits associated with it go onto your report. This helps you:
1. Build your credit in several ways. If the account has a long history of on-time payments and has a high credit limit compared to the balance on the card, it means a low utilization rate.
2. It helps you repair your credit. If you suffered bankruptcy or missed payments, being an authorized user helps you repair your credit as the on-time payments will reflect on your credit account
3. It helps you manage expenses. You only spend money on necessary items, so you don’t go over the limit. Married couples manage bills well when they are authorized users of each other’s cards. Thus, helping them manage their budget and reduce the credit utilization rate.
The cardholder also benefits from having an additional authorized user on their card. The cardholder will have to increase the overall credit limit. They will now be able to spend more than they would with just their accounts. This may reduce their credit utilization ratio, which may increase their FICO score.
Tip: To calculate the utilization rate, divide your total credit card balances by your total credit card limits.
The person who has the credit card is known as the primary cardholder. He can add you to his account by calling the card issuer and giving them your full name, date of birth, and Social Security number.
If the issuer approves you being added. After that, you should receive your credit card. A family member or an employer can add you as an authorized user by logging on to their online account and adding you or contacting the card issuer by phone.
To process this request, the primary cardholder will need:
? your name
? address
? date of birth
? social security number
The person who added you as an authorized user won’t be affected by your credit history. A credit card company looks at the credit of the primary account holder, not the authorized user. As long as the primary cardholder makes an on-time payment, your credit shouldn’t be affected.
The performance of an authorized user is not factored in when calculating the primary cardholder’s score. But just because it won’t hurt you doesn’t mean you shouldn’t be careful.
As much as you want to help others build their credit history or repair their credit, you have to take certain precautionary measures to maintain a good credit history. Below are some of the measures you should consider.
Avoid overspending
No matter who it is, the authorized user can do a lot of damage to the primary account holder if they get carried away with spending on their card. If that happens, it could cause enough added debt for the primary account holder to have trouble making their payments. And if they miss one payment, their score could plunge some points — enough to cause problems for both your credit scores.
Don’t let your authorized users keep too high a balance on their cards
That can hurt both your credit limit utilization rate and your FICO score. For example, if a card has a $5,000 limit and you spend $3,000 and add an authorized user who spends $1,500, you’re already carrying 50% of your limit in debt before you add them to your account. Ensure you only add an authorized user if you can stay on top of your finances.
Keep tabs on spending habits
To curb overspending and for this arrangement to work, it’s important that you keep tabs on the authorized users’ spending habits. Adding an authorized user makes it easy for someone to rack up debt and negatively affect your credit score.
The primary benefit of being an authorized user is that you have a credit card in your name that reports positive payment history to the three major credit bureaus, which helps you build good credit. This is especially valuable if you’re new to credit, are recovering from a poor financial situation, or want to improve your score.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
There are many reasons why people stop paying their debts. Some borrowers use credit cards irresponsibly and end up with huge outstanding balances they can’t afford to repay. Others suffer temporary financial setbacks, such as job loss or divorce, and fall behind on their bills. And some people have no intention of repaying their debts and simply stop making payments after receiving goods or services from creditors.
Despite your circumstances, it is important to learn about the statute of limitations. Determining the debt collection statute of limitations in your state is important if you have any outstanding debt that a creditor has not received payment on.
The statute of limitations is the amount of time each state allows creditors and collectors to sue consumers for payment on delinquent debts. Generally speaking, it begins when consumers fail to make their last payment.
Knowing this time limit is important because a collector cannot file a lawsuit against you to collect the debt after that time has passed. However, if you are sued for the debt and do not respond, the creditor may get a default judgment against you. It is up to you to prove that the debt is past the statute of limitations.
Once the statute of limitations expires, lenders can no longer sue you for unpaid debts in court. And once a debt has “expired,” it is considered “time-barred” and is no longer legally collectible. Even so, you may continue to receive collection calls after that date.
A statute of limitations varies depending on where you live and what type of debt you have, so it’s important to understand what these laws are in your state.
There are legal debt agreements, and each agreement has its own statute of limitations. The four types of legal agreements are:
• Written contract
• Oral contract
• Promissory agreement
• Open-ended agreement
A written contract is a signed agreement in writing which specifies you and the collection agency on loan terms. You can refer to this document in case of illegalities.
An oral contract is a verbal contract between the agency and the client. It is challenging to prove oral contracts in the courts as it will be your word against theirs.
A promissory agreement is an assurance you make to your creditor through a written promissory note to the creditor agreeing to pay back a debt. It includes the interest rate and period in which to handle the debt.
An open-ended agreement works where there is a revolving balance. A good example is in-store credits and credit cards, which you can borrow over and over. An account that only allows you to borrow once is not an open-ended account.
The length of the statute depends on a few factors. Some of these factors are:
State Laws
Most states have statutes of limitation ranging from three to six years, but some states have statutes that extend beyond six years.
Type of Debt Owed
Credit card debt and medical bills typically have shorter statutes than mortgage loans and car loans.
When Does the Clock Start Ticking?
The statute begins on the date of your last payment (the last activity date). If you make even a small partial payment toward your debt, you can reset your statute-of-limitations period because your last activity date will be later than it was before.
You are probably wondering how the statute of limitations affects your credit score. The good news is that it does not lengthen or shorten its time on your credit report.
You will get a negative report on your credit history after defaulting on your payment. The negative remark stays on your report for seven years or ten years, depending on the debt you took.
As time goes by, the negative report on your credit report will have less impact on your credit score. What this means is — you may have a good score despite having four-year-old delinquency on your credit report.
A statute of limitations only bars debtors from suing you but not from contacting you. Since you have a debt, you are required by law to pay the debt, and the debt collectors will continue contacting you to convince you to pay.
If your debt collector contacts you about a time-barred debt. Be extra careful about what you say to a collector. Anything you say or sign may revive the time-barred debt as they may take it as an acknowledgment that you owe them.
If you also agree to pay an old debt with a debt collector, you will have also revived, extended, or waived the debt.
The Bottom Line
Knowing how the law protects consumers helps you ease the pressure you may have whenever you have to deal with debt collectors. What you say or do in case of delinquency will be “used against you in the court of law.” Ascent Network is dedicated to helping debtors understand their rights while improving their credit scores.
A more positive outlook toward a more financially secure future starts today. Give the Ascent Network a call today at 1-877-871-2400. Ascent Network helps consumers all over the United States and is available locally in Huntington Beach, CA, Coachella Valley, Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, Desert Hot Springs, Indian Wells, La Quinta, Indio, and Thousand Palms.
According to the Education $1.61 trillion in outstanding debt. If you have student debt, you must be asking yourself this crucial question — How will removing student debt from my credit profile impact my credit score? Can You Remove a Student Loan From Your Credit Report? You can not remove a student loan from your … Continued
Read MoreThe Fair Isaac Corporation (FICO) mentions that credit inquiries are only 10% of your FICO score. However, a significant number of inquiries reduce your score by several points. It is important to have and maintain a good credit score to enjoy the benefits that come with it. Learn how to remove credit inquiries from your … Continued
Read MoreIf you have collections on your credit report, there’s no doubt you just want them to go away. This is because they may be weighing down your credit score and preventing you from getting loans or qualifying for better interest rates. While we have some tips to help you remove collections from your credit report, … Continued
Read MoreWhat is an Authorized User? An authorized user is someone who is added to a credit card account by the primary cardholder. The primary cardholder is responsible for making payments on the account while you get the authorization to use the credit card. For example, you have a credit card, and your son, Tom, wants … Continued
Read MoreThere are many reasons why people stop paying their debts. Some borrowers use credit cards irresponsibly and end up with huge outstanding balances they can’t afford to repay. Others suffer temporary financial setbacks, such as job loss or divorce, and fall behind on their bills. And some people have no intention of repaying their debts … Continued
Read MoreWE COMMUNICATE WITH ALL THREE CREDIT BUREAUS FOR YOU:
