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.

Bad Credit is NO Joke

April fools joke slipping on a wet floor.

Bad Credit is NO Joke

After working with, and helping, thousands of consumers overcome credit issues, I can tell you that bad credit is nothing to joke about.

Credit Rules Are the Same for Everyone

Sadly, good people often find themselves in a credit situation which is hard to get out of. For many, maintaining a high credit score already has it challenges. But for those who had any type of a credit issue, regaining control of their credit score can be overwhelming.

Credit Repair advice.

Think Before Joking or Judging Others

In my line of business, I often hear people make unkind remarks about people that have less than stellar credit. I hope these remarks are made in a joking fashion rather than in a judging way. I help good people daily who have had some sort of life changing event or other mishap that led to credit issues.  Often, people needlessly feel embarrassed when they have credit issues.  These people do not need to be judged or joked about, they need solid credit advice and credit repair help to get them back on track to a better credit score. Credit reporting/scoring is a big system, and it does not take much to incur credit damage. Each one of us is one event or mishap away from having our own credit issues.

Aprils Fool Day Tip

If you have never had credit issues, count your blessings. If you ever hear of someone who has/had credit issues, understand that there is often a lot more to the story so be kind and do not judge.

Credit Repair help is available. We give a helping hand.

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.

How a Covid-19 Test May Cost Someone $75,600

Angry man due to how a covid test messed up his credit and cost him a ton of money.

I cannot make this stuff up if I tried.

Working with so many credit repair consumers, I often hear crazy stories like this one where a man’s covid test could cost him a whopping $75,600.  One thing for sure, he felt like he should have a higher credit score.

Why the Covid-19 test could cost so much?

Imagine the excitement of buying a new home for your family then all that excitement turns to frustration.  I recently spoke to a client that is currently going through this.  He found out that his previously excellent credit score dropped significantly due to a $55 paid medical collection that was recently added to his credit report due to a Covid-19 test he took.  His lower credit score caused his interest rate to be approximately .75% higher on a $500,000 mortgage.  This higher interest rate caused his payment to increase by $210.00 per month.  Paying $210.00 more per month for 30 years, he will have to pay a whopping $75,600 more in interest.  That is one expensive Covid-19 test.  I did not ask him, but I hope his test was at least negative.Photo of money which he would save if he had a higher credit score.

Why did his credit score drop so much?

Based on my 30+ years of experience working with consumers credit, I can say the major drop in his credit score was caused by this new collection.  A collection like this is considered a major derogatory in the credit scoring world.  This client found it hard to believe that such a small medical bill, that he felt he was not responsible for, could cause such havoc in his life.  In speaking with seasoned Loan Officer Dana DiVecchio, from Holland Mortgage Advisors, his reaction was “this is crazy, never in my 30 years’ experience with credit reporting and lending have I seen such a thing”.   Crazy or not, this is reality, and this consumer will be faced with a large amount of financial credit damage.How to avoid credit damage and the need for credit repair.

Why did the collection even exist?

After speaking to the client, it sounds like the bill was in error.  He had very good insurance and was under the impression that that the Covid-19 test would cost him nothing.  Sadly, many consumers find out the hard way that errors often occur between medical providers and their insurance providers.  Often, these errors result in third party debt collections being added to a consumer’s credit report(s).

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.

 

2 Credit Issues That Federal Student Loan Debtors May Face

Important information to protect your credit score.

Consumers that owe federal student loan debts may soon face a higher risk of credit reporting damages and/or errors.  Learn the 2 credit issues that federal student loan debtors may face.  One potential credit reporting issue is related to Covid and one has nothing to do with Covid.

1.   For many consumers, federal student loan payments will soon be required again

Due to the Covid pandemic, the Federal Government passed the CARES Act, part of which was related to federal student loans.  As of March 2020, many federal student loans went into forbearance where no payments were required, and no interest was being charged.  Currently, the forbearance and zero interest policies are due to end on September 30, 2021.   I expect many consumers will face a higher risk of credit reporting issues due to the sheer number of loans going back into repayment at once along with all the potential special payment plans that are available on federal student loans.

2.   Two large student loan processors are calling it quits

Loan servicers, Granite State Management & Resources and The Pennsylvania Higher Education Assistance Authority (PHEAA), which operates as FedLoan Servicing for federal student loans, recently announced that they are getting out of the federal student loan servicing space.  Their servicing exit will lead to millions of consumers who are about to go back into repayment to have to worry about who their new loan servicer will be.  Many may be faced with questions like the who, how, how much and when do they have to pay.  Different loan servicers have different policies and procedures on how they accept payments.  These can include mailing monthly statements, auto debits, online payments, or other options.  In addition, different loan servicers have different policies and procedures on how and when consumers can seek other payment options as well as loan forgiveness.  Getting a new loan servicer combined with all the millions of loans coming out of forbearance just sounds like the perfect storm for credit errors.

Prepare now to avoid problems in the future

Know who your loan servicer is and how to contact them.  You can find your current federal student loan servicer at studentaid.gov.

If you have not been making student loan payments over the last year and a half or so, you may want to take a good look at your current budget.  Make the needed adjustments to your budget so that you can have the needed funds to resume your student loan payments.

Know your payment options.  Federal student loans have many special payment options for those who cannot afford the standard amortized payments.  You can find a Loan Simulator at studentaid.gov or contact your servicer to determine your repayment options.

change to credit score

Tips on how to protect your credit.

I suggest keeping all correspondence, mail, email, text and even phone records, related to your federal student loans.  Correspondence will confirm if you must make payments as well as the amount and due date of the required payments.  If you are going back to making payments, keep a detailed record of any payments made.  If you are setting up auto payments, confirm when the auto payment will start because in some cases, you may have to make a payment or two on your own until the auto payment is fully set up.  If you are going back into forbearance, keep details on when the forbearance will end.  If you get into an income-based program, keep details on when you must recertify your income.  By keeping all your correspondence and detailed records, it can help you fix a credit issue/error should one exist.

Consumers would be wise to review their credit reports regularly to ensure that there are no credit reporting errors related to their federal student loans that will be coming out of forbearance soon.  Consumers can access their credit reports for free at annualcreditreport.com.

How to increase your 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.