Holiday Credit Score Killers

Woman is shocked after adding up all her charges in one month on her credit card.

Holiday Credit Score Killers!

It seems every year we have clients who encounter damage to their credit score(s) over credit issues related to the holidays.  Below are a few of the top holiday credit score killers we often see.  Do your best not to let the hustle and bustle of the season ruin your credit score.

 

Don’t miss any payments

For many, the holidays are hectic.  Be like Santa and make your own list. Add all your monthly payments on a list and, if needed, check it twice to be sure you make all your payments on time.  Going 30 days late, even on the smallest of payments, can cause havoc to your credit score.

Santa list where consumers can make their own bill list so they don't forget to pay any bills on time.

Don’t open unneeded credit

It seems more common than ever these days for a retailer to ask you to open a new credit card.  Quite often retailers offer perks, like discounts, if you open a new credit/charge card with them.  In this situation, take a second and weigh the pros and cons of saving a few dollars.  The pro would typically be to save a few dollars, but the con may be the result the new account will have on your credit score.  Opening new credit often causes your credit score to decrease in the short run due to a hard credit inquiry as well as lowering your average age of credit.

Paying with cash vs. a credit card

The answer to using cash over credit cards, or vice versa is tricky.  Below are options to consider what would work best for you.

Benefit of using a credit card:

Credit cards provide more safety to the consumer than cash.  Think about it, if you lose your credit card while shopping, you can get a new credit card mailed to you.  If you lose your holiday bankroll of cash, you may be out of luck.  At times, credit cards may offer you extended warranties on purchases as well as rewards for using their cards.  Using a credit card may make it easier to return items, especially when you lose the receipt.  Keep in mind, heavy use of a credit card can lead to lower credit scores due to increased credit utilization so be careful.

Benefit of using cash:

In one word, “Budget”.  Like anytime you plan to spend money, it is best to do so within your budget.  By using only cash, it is easier to stay on budget because when you run out of cash, you are done shopping.  On the other hand, credit cards have a way of getting out of hand.  Many consumers I talk to have experienced the shock of opening a post-holiday credit card statement to find out they spent so much more money than they thought they did.  From a credit standpoint, using all cash will not have any impact on your credit score.

Woman is shocked after adding up all her charges in one month on her credit card.

Lookout for scams and thieves

 Sadly, scammers and thieves don’t take breaks over the holidays.  Consumers often are at more risk over the holidays.  If carrying cash, do so in smaller quantities and don’t flash envelopes full of cash. When placing packages in your car, try to put them in your trunk or cover them up for less risk of an auto break in.  If you are making any donations to help others, do your homework and make sure that your donations are going to a real cause and not to a scammer.  Just be extra careful to protect yourself and your loved ones.

scammer trying to get consumers personal information

Conclusion

I hope these credit score tips help you make good decisions over the holidays.  These tips will help you improve your credit score and personal safety during this very busy time of the year.

For those who need it, Credit Repair help is available

If your credit needs help, take action. There are a lot of resources available on steps to improve your credit. You can get free information from the FTC or contact a professional credit repair company like CureMyScore.com. By taking action to improve your credit, you may qualify for the home of your dreams or a new auto while paying less in interest charges.

Call us at 412-564-5370 with any questions / comments or schedule a free program review.  Like us on Facebook to receive future consumer credit tips.

A Sad Credit Reporting Change is Coming

Scared family faces credit issues related to human trafficking.

Why this credit reporting change is SAD?

When I first learned of this recently passed Act, I felt nothing but sadness that this act is needed.  I have been in the credit and lending business for more than 30 years and I never once considered how credit damage would impact a survivor of human trafficking.  I applaud congress for creating this Act to help these survivors.

Sad woman needing credit repair help.

I expect these survivors already face many issues with getting their lives back on track. It is nice to see that negative, derogatory credit reporting would not be a hurdle for them too.  By having their negative credit reporting removed, a human trafficking survivor will have a much better chance to build a solid credit history, one that they alone are responsible for, and have greater financial opportunities.  Better credit allows for more financial security and opportunities including employment opportunities, rental housing and future lending.

Proposed Credit Reporting Change

The CFPB, Consumer Financial Protection Bureau, is in the process of finalizing a proposed a rule change that will have a major credit reporting impact for a certain group of consumers.

The proposed rule change will apply to survivors of human trafficking.  The rule change will require the Consumer Reporting Agencies, also known as Credit Reporting Agencies, not to report any negative information on a survivor’s credit reports during the period they were trafficked.  The CFPB is proposing this rule change to implement the requirements set by Congress based on the recently enacted Debt Bondage Repair Act.  Changes to the credit reporting system like the this proposed one are very rare.

How can survivors of Human Trafficking repair their credit?

At this time, the CFPB just concluded accepting public comments on this proposed rule.  They are now working out the details for what documentation survivors will need to submit to the Credit Reporting Agencies.  The Credit Reporting Agencies will be required to mask, or block, any negative reporting that occurred during the period the survivor was trafficked.

What Credit Reporting Agencies will this apply to?

This Rule will apply to all the Consumer Reporting Agencies.  Most consumers think of the “Big 3”, Experian, Equifax and TransUnion, as the only Credit Reporting Agencies.  This is not the case as there are many Consumer Reporting Agencies that house and sell consumers’ data.  It is important that survivors work with all the Consumer Reporting Agencies to ensure their consumer files are cleared of any negative data during the time they were trafficked.

My Takeaway After Writing this!

As a father, husband, and friend to many, I have been blessed to not have this heinous crime impact me or my loved ones.  I can only imagine that anyone who is evil enough to enslave another human would also abuse their finances in every way possible.  My thoughts go out to anyone who is or has been part of any human trafficking and I hope they can find the freedom, safety, security and happiness they deserve.

Hope for a better life and better credit.

Credit Repair Help Is Available

If your credit needs help, take action. There are a lot of resources available on steps to improve your credit. You can get free information from the FTC or contact a professional credit repair company like CureMyScore.com for help. By taking action to improve your credit, you may qualify for the home of your dreams or a new auto while paying less in interest charges.

Call us at 412-564-5370 with any questions / comments or schedule a free program review.  Like us on Facebook to receive future consumer credit tips.

 

Consumers Apply for Loans WITHOUT Knowing

Did you ever hear the saying that nothing is free?

Every consumer should be very careful on providing the numerous free credit/lending websites their personal information.  So many consumers fail to understand that with the exception of annualcreditreport.com, most, if not all, of the free credit/lending providers are actually marketing companies.  These marketing companies use your personal information to make you credit offers; they then make money when you apply for and/or open new credit.  Seeing that I educate consumers on how to improve their credit, I subscribe to a number of these free sites purely to understand how they operate so I can better warn consumers of some of their pitfalls.  I now get MANY emails daily about applying for loans, getting out of debt, how to better manage my money and how my credit score changed.  REALLY? I have an A+ credit score and I have no revolving debt.  I have ZERO need for these companies’ advice.  Since I know better, these marketing companies don’t make money off of me.

At Cure My Score, we often have clients who complain about having unauthorized credit inquiries.  At times, they fear their data was hacked and an ID Thief was trying to steal from them.  Perhaps all they did was unknowingly  apply for credit?

Below is a photo from an email I received today from one of these free web marketers.  I cut off the bottom of the email where in part,  it displayed my entire name, address and the month and year of my birth.

As a consumer, I have a number of issues with this email, as well as with the many other similar emails I get daily.

Why my credit score went down.

  • I never asked for, needed or requested money from this site. I find it odd asking me if I still need money.  I assume they want the catchy question in LARGE PRINT as well as the email subject line.
  • If I were to click on any dollar amount in this email, whether by accident or out of curiosity for more information, they will consider that single click as an application. They may instantly send my personal information to up to 5 lenders who can then obtain my credit and solicit me with loan offers.
  • In the fine print of this email it discloses “In order to provide you with an expediated loan process, we are submitting the following information to our network of lenders:”, they then display my name, address and birth date.
  • In the super fine print it states “By using 1-Click and clicking on a loan amount above, you consent and agree to the following:”; part of this consent is agreeing that to up to 5 lenders may obtain my credit report or other infromation from the credit bureau(s) about me.
  • The email itself provides a great deal of my personal information. If my email were to be hacked, I would not want a hacker to have access to this email containing my personal information.

I don’t want a marketing company to send my personal information to their “network” of lenders.

I don’t know if this network of lenders will make hard credit inquiries which will hurt my credit score nor do I know what they will do with my personal information.

Let me be very clear, if I want to borrow money for any reason, I will choose the bank I want to deal with and inquire about any loan options that serve my needs.  If I then decide to request a loan, I will take the few minutes that it takes and apply for it and knowingly give consent to have my credit pulled.  I will know what bank I am dealing with and who I am choose to share my personal data with.

If you provided your personal information to any of these free websites, you have the option to contact them and unsubcribe to their services.  Some of the free websites that give your regular access to your credit reports can be beneficial if you are in the process of repairing your credit.  If this is the case, consumers should be very careful on what links they click.

CREDIT REPAIR HELP IS AVAILABLE.

If your credit needs some help like this client, take action. There are a lot of resources available on steps to improve your credit. You can get free information from the FTC or contact a professional credit repair company like CureMyScore.com for help. By taking action to improve your credit, you may qualify for the home of your dreams or a new auto while paying less in interest charges.

Call us at 412-564-5370 with any questions / comments or schedule a free program review.  Like us on Facebook to receive future consumer credit tips.

Credit Cards – USE them or LOSE them

Credit Cards – USE them or LOSE them

Like it or not, credit cards have a big impact on your credit score, so it is important to understand how this all works.  As an educator of credit for a credit repair company, I often teach consumers how to open credit and effectively use it to help them improve their credit scores.

Many companies will close your credit cards if you don’t use them.

Banks issue credit cards to consumers to make a profit from them.  If a consumer does not use their credit cards, the banks stand no chance of collecting their interest charges, hence no profit.  It costs the banks money to keep credit cards open so most require some activity on the card to keep it open.  Notice I said they require activity, you do not have to pay them interest where they make a profit, to keep your credit card open.  Banks know that they will eventually make a profit off the average consumer if they are using their credit cards.

Picture of a credit score.How often do you need to use your credit cards to keep them open?

Based on my 30+ years of experience working with consumers and their credit, I can say there is not an exact answer to this question.  In my experience, most banks will keep credit cards open if they see activity at least once a year.  Personally, I try to use my revolving credit cards at least once every 6 months.  As an example, I recently went to a department store and bought a tee shirt ($10 or so) with their credit card purely to keep activity on the card.  Once I received the statement, I paid the bill in full and will repeat this process in 6 months or so.

Why do credit score models care about my credit cards?

Credit scores are designed to predict the risk of a future payment default.  The higher the score, the lower the risk; the lower the score, the higher the risk.  Credit cards give consumers fast access to credit so in times of financial trouble, a consumer can lean on a credit card to get by rather than defaulting on a current payment obligation.  Therefore, consumers who have open credit cards with low to no balances relative to their credit limits do well in this category of the credit score.

Your actions determine if your credit cards stay open.

At the end of the day, you can’t force your credit card company to keep your credit card open.  Banks can close a credit card if they choose to.  By keeping regular activity on your credit card, you are giving the credit card companies a reason to keep the card open.  My advice is to keep all your credit cards active.  If you have one that you have not used in a while, I suggest you dust it off and go make a small purchase to generate a statement.

Credit repair help is available.

If your credit needs some help, take action. There are a lot of resources available on steps to improve your credit. You can get free information from the FTC or contact a professional credit repair company like CureMyScore.com for help. By taking action to improve your credit, you may qualify for the home of your dreams or a new auto while paying less in interest charges.

Call us at 412-564-5370 with any questions / comments or schedule a free program review.  Like us on Facebook to receive future consumer credit tips.

Top 2 Covid-19 Credit Reporting HOT SPOTS

Review your credit reports for credit damage from Covid-19 related payment plans.

Covid-19, first your health and now many consumers have to worry about their credit.

You are doing your part by social distancing, keeping good hygiene and wearing your mask in public but you would be wise to add one more task to your new normal; review your credit report for errors.  Every consumer should be aware of some credit reporting hot spot issues that are happening as a result of Covid-19.  Many consumers are finding credit issues that are leading to lower credit scores and/or other denials of credit.  Consumers can obtain their credit reports for free at www.annualcreditreport.com.  Typically, these are only available once per year but now, due to Covid-19, they are available WEEKLY through April 2021.

So what exactly should you be looking for?

  1. If you have continued to fully pay all your obligations on time, your credit report should not report any recent late payments or past dues. You would be wise to also be on the lookout for any comments on your credit reports that may give a lender the impression you are not paying your obligations as normal.  I recently spoke to a young business professional who never missed a payment to anyone nor did she make special payment arrangements with any of her creditors.  After applying for a mortgage, she was shocked to find out that her auto lender reported a comment of “Affected by natural or declared disaster”.  She had no idea how or why this wording was reporting.  She explained that not only did she pay her auto on-time, she was actually paid a month in advance.  Sadly, she was advised that this comment would lead to a denial with underwriting as the wording indicates she was not paying the account as agreed.
  2. Many consumers have not been able to fully pay their obligations on-time and have made special payment arrangements with their creditors. Often, these special payment arrangements include either a forbearance or a deferment.  It is very important to get any special payment arrangements in writing so you have proof should you need it later.  The credit system has specific coding for your creditors to use to indicate these types of special payment arrangements.  This coding only works if your creditor reports it correctly.  If you are in such an arrangement, you want to make sure your creditor is not reporting any late or past due payments on your credit report during the time you are in a special payment arrangement.  Reporting of any recent late payments will be detrimental to your credit score and credit profile.

What do I do if I see such an error on my credit report?

You have the right to dispute any information that you feel is not accurate on your credit report.  It is my experience that it’s best to file disputes in writing and if you choose, you can include any supportive documentation.  The credit report you obtain from www.annualcreditreport.com will contain additional information on how you can file a dispute.

How to raise credit score.

If your credit needs some help, take action. There are a lot of resources available on steps to improve your credit.  You can get free information from the FTC or contact a professional credit repair company like CureMyScore.com for help.  By taking action to improve your credit, you may qualify for the home of your dreams or a new auto while paying less in interest charges.

Call us at 412-564-5370 with any questions / comments or schedule a free program review.  Like us on Facebook to receive future consumer credit tips.

 

COVID-19 and Forbearance – How to PROTECT your credit

How to avoid credit damage and the need for credit repair.

COVID-19, otherwise known as the Coronavirus, is causing many consumers to have disruptions in their income.

Many of these consumers are facing financial hardship and may have options available to help them alleviate financial stress during these uncertain times. Creditors may offer debtors who are facing a financial hardship a forbearance option to help out.  It is important for those with debts to understand what a forbearance is, how can it help them, and how it will it impact their credit.

What is forbearance?

A forbearance is when your lender approves to temporarily postpone, suspend or pause all or part your payment obligation(s).  Keep in mind that it is common for your interest to continue to accrue during any forbearance period and your loan balance may increase.  Due to the current heath pandemic we are facing, some lenders are offering exceptions and are eliminating interest charges during any forbearance periods.  It is vital to call your lenders to see what help is available.  It would be wise to document, in writing, any forbearance and/or interest exceptions you get.  Keep all correspondence, including emails and texts, and written notes in a safe place in case you need them at a later date.

How can forbearance help you?

In times of a financial hardship, the ability to forbear an obligation may help you maintain other vital living expenses.  As an example, by forbearing a mortgage, automobile or student loan payment during a financial hardship, you can use those funds for basic necessities like rent, groceries or utilities.

Will a forbearance impact your credit score?

If you are required to make reduced payments during any forbearance period, you must make these payments timely or you should expect your credit score to suffer.  The credit reporting system has special coding for lenders to identify an account that is in forbearance.  The presence of such coding is not derogatory to your credit score.

Calculating the benefits of a loan forbearance.If you are facing a financial hardship, speak to your lenders and ask them what options they have available to help you.  If you qualify for forbearance, you should be able to avoid any credit damage.  It is very important to get any forbearance agreements in writing, and keep them,  in case your lender does not report your account accurately to the credit reporting agencies.  Should errors occur, any written correspondence will help with repairing your credit.

Cure My Score is a full service credit restoration company that has been helping consumers with successful and affordable credit repair since 2008.  If your credit needs some help, take action. There are a lot of resources available on steps to improve your credit. You can get free information from the FTC or contact a professional credit repair company like CureMyScore.com for help. By taking action to improve your credit, you may qualify for the home of your dreams or a new automobile while paying less in interest charges.

Call us at 412-564-5370 with any questions / comments or schedule a free program review.  Like us on Facebook to receive future consumer credit tips.

 

Coronavirus Scammers Are Here.  Be PREPARED

people are scammed leaving them with bad credit and in need of credit repair.

Scammers stop at NOTHING to steal from others.  The best prevention is to be prepared.  It is in great disgust that a blog like this is needed.

As of today, everyone in the entire world is likely aware of the global disruption, fear and uncertainty the Coronavirus pandemic is causing.  With the Federal, State and Local Governments plans for aid continuously changing, it is causing much confusion over what is fact versus fiction.  With all of the confusion, many consumers are desperate to find updates or help.  Scammers will look to take advantage of this confusion and will continuously find new ways to scam innocent people.

Consumers should be VERY careful to avoid scams.  Scams can make a bad situation much worse.

Watch out for:

  • Unsolicited emails asking you to click on links to apply for government benefits, temporary work or to make donations to charities.
  • Phone calls asking you for your private information in an effort to offer you government benefits or jobs. Keep in mind that scammers can even alter the caller ID.
  • Door knockers claiming they work for the government or are collecting for a charity.
  • Offers to buy special drugs or products stating you can avoid the virus.
  • Offers that make you pay ANYTHING to qualify for any government benefits.

If you need a job now, be sure to submit an application at a verified company website or in person.  If the government approves aid to consumers, they will provide details on how and when the aid will be distributed and you certainly will not have to pay anyone to get it.  If you want to donate to a charity, do your homework first and donate to a real charity of your choice in a secure way.

scammed out of money, in need of credit repairSadly, scammers often prey on the elderly.  Please warn all of your family and friends to be extra vigilant.  Don’t act on anything too fast; take the time to think about or investigate anything that looks out of place.  If anyone or anything tries to get you to rush into an action, take a BIG step back and consider your options. If you feel you’re being scammed, report it to the Federal Trade Commission.

Please follow these tips to keep you and your family away from being scammed.   Follow the safety health tips from the Centers for Disease Control and Prevention and stay safe.

PS  During the time I was typing this blog, I received an email stating that I must pay the sender $4,000 in bitcoin today or they will “iηfect your whole family with the CoronaVirus, reveal all of your secrets. There are countless things I can do.”  Needless to say, I will not be sending this lowlife any bitcoin.

If your credit needs some help, take action. There are a lot of resources available on steps to improve your credit. You can get free information from the FTC or contact a professional company like CureMyScore.com for help. By taking action to improve your credit, you may qualify for the home of your dreams or a new auto while paying less in interest charges.

Call us at 412-564-5370 with any questions / comments or schedule a free program review.  Like us on Facebook to receive future consumer credit tips.

 

Coronavirus and Your Credit Score…What You Need To Know

Sadly, a side effect of the Coronavirus will be lower credit scores for many consumers.

While the virus itself will not cause any credit pain, for many, the economic side effects of the virus will.  These economic side effects cannot be cured by hand sanitizers, masks or quarantines.

Many consumers are going to face some financial challenges due to this pandemic.  For some, it may be fewer customers resulting in fewer tips, taking unpaid leave to stay at home with the kids, hours cut at work or even being displaced from a job.  Regardless of the why, how and where, it is and will continue to happen to many.  If you are facing a decline in your income, the following tips that can help you prevent, or at least minimize, any damage to your credit score.

  • Eliminate any unnecessary spending so that you can better weather any financial challenges.
  • Do your best to make at least the minimum payments on all of your financial obligations.
  • If you must use your credit cards to get by, try to use them sparingly.
  • If needed, call your loan servicer on any Federal Student Loans to see what payment options may be available to you.  You may qualify for a forbearance, deferment or an income based repayment option.

For those that experience a 30 day or more late payment, you should expect to take a meaningful hit to your credit score.  Late payments remain on your credit reports for 7 years.  If you have increased use of your revolving credit, you should expect your credit score to take a hit.  Fortunately, you should expect your score to improve once you are able to get your revolving credit paid down or off.

Ideally you will not be impacted by this virus.  I hope it is short lived and we can all get on with our lives.

CREDIT REPAIR HELP IS AVAILABLE.

If your credit needs some help like this client, take action. There are a lot of resources available on steps to improve your credit. You can get free information from the FTC or contact a professional credit repair company like CureMyScore.com for help. By taking action to improve your credit, you may qualify for the home of your dreams or a new auto while paying less in interest charges.

Call us at 412-564-5370 with any questions / comments or schedule a free program review.  Like us on Facebook to receive future consumer credit tips.

New credit scores are coming; will they help or hurt you?

change to credit score

The credit scoring giant FICO recently announced that they are planning on releasing their newest score models, FICO10 and 10T Suite, later this year.

The FICO 10 score model will continue to have the same score ranges and use the same 5 major factors in determining a credit score as previous models.  It is reported that consumers with recent late payments, high credit utilization (the amount owed on revolving debts compared to the limits) and possibly personal (unsecured) loans will likely see a negative impact to their credit scores.  Conversely, consumers with no late payments, low credit usage and no personal loans likely will see an increase to their credit scores.

The difference between the FICO 10 and 10T models is that 10T will take into consideration trending data.  Trending data takes into consideration your actual payments vs. the minimum required payments as well as balances.   Up to this point, FICO has never used trending data in their scoring models.  So, is your unsecured debt level trending up or down (don’t factor in student loan, mortgage or auto debt)?  Do you pay off your credit cards each month or do you only pay the minimum or a partial balance payment?  Is your total unsecured debt growing or is it in good shape?  Consumers that pay off their unsecured debts in full each month and refrain from opening new unsecured loans should expect trending data to help their score.  Conversely, consumers with high credit utilization and/or the presence of new unsecured loans should expect trending data to hurt their scores.

If you have a lot of unsecured debt, you would be best served to work out a budget and a plan to work on reducing your unsecured debt level.  Paying this type of debt down, or off, should help you with your FICO 10 and 10T as well as save you money on interest charges.  Keep in mind the word “trend”.  Even if you can only pay your unsecured debt down slowly, you will still be trending lower, which is good.

In summary, pay your bills on time on time and keep your unsecured debts to a minimum and you should do just fine with your credit score.

Consumers need to understand that many scoring models are commercially available to lenders.  Lenders choose which model works best to measure their risk in lending.  It is VERY common for consumers to have different scores with each scoring model.

If your credit needs some help, take action. There are a lot of resources available on steps to improve your credit. You can get free information from the FTC or contact a professional company like CureMyScore.com for help. By taking action to improve your credit, you may qualify for the home of your dreams or a new auto while paying less in interest charges.

Call us at 412-564-5370 with any questions / comments or schedule a free program review.  Like us on Facebook to receive future consumer credit tips.

 

What is a SPOOKY Credit Score?

Don't have a scary credit score!

Happy Halloween all.  We recently had a new credit repair client who said their current credit score was spooky and they no longer wanted to have a spooky credit score.

So what the heck is a spooky credit score?  In reality, this client was just joking that their credit score was poor and they wanted better.

If I had to define a spooky credit score, I would call it a credit score that would produce less than the best credit approval and terms.  Many consumers fail to understand that poor credit scores may lead to approvals but often these approvals come with higher interest rates and/or fees.  In my business, this is often referred to as risk based pricing.  Poor credit scores are considered riskier to lenders, landlords, insurance companies and others so credit providers typically charge more to offset the risk.

So, what to do if your credit score is spooky?  The short answer is work on it.  Pay all your bills timely going forward and try to keep your debt to a minimum.

If your credit needs some help, take action. There are a lot of resources available on steps to improve your credit. You can get free information from the FTC or contact a professional company like CureMyScore.com for affordable credit repair help. By taking action to improve your credit, you may qualify for the home of your dreams or a new auto while paying less in interest charges.

Call us at 412-564-5370 with any questions / comments or click here to schedule a free program review.  Like us on Facebook to receive future consumer credit tips.