Student loans, unpaid credit, car loans, and mortgages can make it hard for you to enjoy some finer things in life. You may not travel as much as you would and starting a family can seem like a burden. To get out of these debts, you may be considering credit repair services or debt consolidation. But what is the difference between credit repair and debt consolidation?
Credit repair and debt consolidation both help you improve your credit score, albeit through different processes. Here are the differences between the two;
If you have several debts, you may forget to pay off some of the loans hurting your credit score. Debt consolidation enables you to have only one debt instead of having several. It involves taking a new loan to pay off multiple smaller loans in one go. You may need to take out a personal loan or use home equity loans to pay off the other debts.
Whether you choose a personal or home equity loan, you will have to compare interest rates from different lenders to see which one has the best deal. And when you receive the loan, you will pay off all your debts and start paying the new loan.
Credit repair is a service that helps you to improve your credit score and repair credit reports. Credit repair companies will typically help you remove inaccurate information from your credit report, dispute incorrect information with creditors or the credit bureaus, and help you to obtain copies of your credit reports for free.
When choosing between credit repair and debt consolidation services, ensure you know all the pros and cons associated with each so that you can choose the one that will work for you.
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?
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.
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.
If you want to stay on top of your finances, a good credit score is essential. Your credit score
can help you qualify for loans, give you better interest rates and even get you a lower
insurance premium.
If your score is not looking good, It is worth taking the time to improve your number. Here are
seven things you can do that will help improve your credit score.
This is the first point that can’t go without mentioning. It is what gets most people on the
lower end of the score. If you want a good credit score, you need to pay all your bills on time.
This has the biggest impact on your overall rating.
Your credit utilization ratio (how much of your available credit you’re using) is another major
factor in your FICO score. Keeping your balances low will help improve your score in this
area. Avoid using more than 30 percent of each card limit each month.
The higher the balance in comparison to the limit, the more it can affect your score
negatively. Utilizing less than this amount will help keep your score up while paying down
balances. This means if you have $15,000 in available credit across several cards and use
more than $5,000 at any given time, it can hurt your score.
Every time someone pulls your credit report, it shows up as an “inquiry” and can lower your
score slightly. Credit inquiry doesn’t have a huge effect as long as you get the quotes within
30 days of each other. Doing so will limit the impact on your credit score. Also, ensure you
aren’t opening many new accounts or have more than six inquiries.
When applying for new credit cards or loans, get quotes within 30 days of each other. Doing
so will limit the impact on your credit score.
If you suspect unauthorized inquiries, dispute those errors. The fastest way to dispute
and boost your score is with the help of a credit expert like Ascent Network. Limit Inquiries
on Your Credit Report.
Paying off debts is a great way to improve your credit score or utilize debt consolidation
services. The lower the debt you have, the better your chances of improving your score.
You can also consolidate your debts into a single large debt with favorable interest rates and
payoff terms and pay them quickly. Focus on paying off your credit cards with the highest
interest rates first and, if possible, pay more than the minimum payment due.
Don’t close old accounts that you don’t use anymore. But rather keep them open and active
by using them once in a while. If they don’t have an annual fee, there’s no reason to close
them in order to improve your credit score.
If you have bad credit, you’re not alone. According to the Federal Reserve, more than half of
Americans have a credit score under 680.
It is very important to check your credit history at least thrice a year to know your credit
score. You will detect fraudulent activities since it is easy for criminals to open credit cards in
your name.
A secured credit card will help you manage your finances better since you will be required to
deposit some cash to open the account. Credit card companies will report your credit score
to credit bureaus as you keep using the secured credit account. So, be sure to make at least
minimum payments on time to improve your score.
What should you do to manage your finances and not default in repaying your debts? Organize: Make sure your files are in order, so it’s easy to find bills and statements needed to create a budget.
? Set goals: Determine what you want to accomplish, such as paying off debt or
building an emergency fund of three to six months’ living expenses.
? Create a budget: Figure out how much money comes in each month and where it
goes. You may need to cut back on spending money on unnecessary things until you
reach your goals.
? Build an emergency fund: This will help you pay debts even when you lose your job
or in the case of unexpected expenses. Have savings worth three to six months in
your emergency fund.
Key Takeaway
Credit scores are used by lenders as a way to predict how likely you are to repay the money
you borrow. The higher your score is, the more willing lenders will be to take a chance on
you. People with higher scores than yours are offered lower interest rates and better terms
on loans and credit cards. It is best to take charge and improve your credit score to enjoy the
benefits.
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.
Student loans, unpaid credit, car loans, and mortgages can make it hard for you to enjoy some finer things in life. You may not travel as much as you would and starting a family can seem like a burden. To get out of these debts, you may be considering credit repair services or debt consolidation. … Continued
Read MoreAccording 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 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 MoreIf you want to stay on top of your finances, a good credit score is essential. Your credit score can help you qualify for loans, give you better interest rates and even get you a lower insurance premium. If your score is not looking good, It is worth taking the time to improve your number. … Continued
Read MoreWE COMMUNICATE WITH ALL THREE CREDIT BUREAUS FOR YOU:
