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FAQs - Frequently Asked Questions

Below you'll find the answers to the top 10 most common questions.

1. What is a credit score?

2. How long does information stay on my credit report?

3. How can I get a copy of my credit report?

4. Should I still check out my credit report if I haven't had mishaps?

5. Can anybody save me from drowning in unsecured debt?

6. Is a debt management program better than bankruptcy?

7. I make enough to pay my bills, but I seem to pay them late or not at all. What can I do?

8. I know I have items in collection, but the creditors have not contacted me in two years. Could I have gotten lucky and they've forgotten about it?

9. I filed bankruptcy a couple of years ago. Should my credit report be all up to date now?

10. Where can I find help with other issues?

 

1. What is a credit score?

A credit score is a statistical model that assesses your credit-worthiness based on your credit history and current credit accounts. Scores can range from 375 to 900 points. The higher your score is, the more it will empower you to get the best interest rates on your loans. The purpose of your credit score is to help a future creditor determine your likeliness of repaying a potential loan.

2. How long does information stay on my credit report?

According to Fair, Issac and Company (FICO), who developed the formula for credit scoring, scores reflect credit payment patterns over time with more emphasis placed on recent information. To improve your credit score:

Pay your bills on time. Delinquent payments and collections can have a major impact on your score. The longer you pay your bills on time, the better your score.

Keep balances low on credit cards and other "revolving credit." The most effective way to improve your score in this area is by paying down your revolving balances.

Apply for and open new credit accounts only as needed. Don't open new accounts just to have a better credit mix--it probably won't raise your score.

Don't close unused credit cards as a short-term strategy to raise your score. In fact, this approach could backfire and actually lower your score.

Check your own credit reports for accuracy. You can dispute inaccurate information found there.

Finally, realize that in combination with the above, if negative information already exists on your report, rebuilding your credit score may take time.

3. How can I get a copy of my credit report?

First of all, realize that most internet offers of a "free" credit report usually require you to sign up and pay for some other service. You can secure a free copy of your credit report by contacting:

Annual Credit Report Request Service

P.O. Box 1050281

Atlanta, GA 30348-5281

1.877.322.8228

www.annualcreditreport.com

Bear in mind that your credit score is NOT included in these reports. If you would like a credit report with your score, you will have to pay for it.

4. Should I still check out my credit report if I haven't had mishaps?

The answer is YES! Statistically, 25% of all credit reports contain errors.

5. Can anybody save me from drowning in unsecured debt?

Often we can. There are reputable companies who offer a debt management program that may be able to take your unsecured debt (credit cards, medical bills, collection accounts and legal fees) and enable you to pay that off at a much quicker pace with interest rates and other fees reduced.

Contact me directly and we can assess your unique situation to develop a plan of action. Keep in mind that a debt management program may not necessarily be right for everyone.

6. Is a debt management program better than bankruptcy?

YES! In a debt management program, you're repaying your debt at a quicker pace and showing future creditors that you can repay debts and start rebuilding a positive credit history. Remember, a bankruptcy stays on your report for 10 years.

7. I make enough to pay my bills, but I seem to pay them late or not at all. What can I do?

You are not alone. Often our problem is not a lack of income, but a lack of organization. We also offer assistance with budgeting. Paying your bills late or not at all is probably costing you a lot of money.

As a result of a lower credit score you are probably paying higher interest rates. And as a result of paying your bills late, you are probably paying late fees on top of your monthly bills.

If you pay two late fees each month, at $25 each, it's costing you an extra $600 per year. Pretending that your bills don't exist will not make them go away.

8. I know I have items in collection, but the creditors have not contacted me in two years. Could I have gotten lucky and they've forgotten about it?

Don't count on it. Just because a creditor has stopped calling you does not mean that the information is not on your credit report.

9. I filed bankruptcy a couple of years ago. Should my credit report be all up to date now?

Again, while it should, there's still room for error. A credit report only reflects what a creditor reports. Often accounts that have been cleared through a bankruptcy or even through collections do not get updated. You need to check your report for accurate information.

10. Where can I find help with other issues?

Whether it is a large debt load, budgeting, credit report issues or other financial challenges, often we'll have the solution to your problem. When you make the first step and commitment, we'll be here.

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