What is FICO
Fair Isaac Corporation
We want potential clients to be fully informed about the opportunities we see when we review their credit files. We look for errors that could potentially be referred to one of our partnered consumer lawyers, as well as evaluated which accounts are helping and which ones are hurting. Then we provide a quote, timeline, and what to expect. No two clients are alike, so everything we do is curated to drive the most value for each client who entrusts Consumer Leverage with their credit needs; big or small.
What Affects Your Credit Score
Payment History: 35%
Your payment history is a record of on-time, late, and missed payments on past and current credit accounts. These accounts can include credit cards, lines of credit, personal loans, and mortgages. Your payment history indicates to a potential lender the likelihood of you successfully repaying your debt or going into default. Payment history accounts for about 35% of your FICO® Score.
Debt Utilization: 30%
Credit cards provide the ability to build a credit record to receive a credit score. When you use credit cards responsibly, you have access to additional funds in an emergency. You can also finance large purchases that might take a few months to pay off, earn points or cash-back rewards on your monthly spending, and in some cases, you have access to services such as roadside assistance, travel plan assistance, upscale airport lounges, and concierge help while traveling.
If you have a high credit utilization on your cards, you might find yourself with a lower FICO® Score on your credit report, a more difficult time making larger monthly payments, and a potentially higher interest rate on your cards if you make any payments late.
Credit utilization has a big influence on your credit score, so you should know what it is and how you can manage it to get the best credit rating and the benefits that come with it.
Credit utilization is the ratio of your outstanding credit card balances to your credit card limits. It measures the amount of your credit limit that you are using. For example, if your balance is $300 and your credit limit is $1,000, then your credit utilization for that credit card is 30%.
Keep in mind this 30% is the minimum for your utilization without it severely affecting your credit scores. The ideal utilization is between 1–10% of your total credit limit to maximize points on the FICO® algorithm. Utilization makes up 30% of your credit score.
Length of Credit History: 15%
The “Length of Credit History” category of FICO® makes up about 15% of your credit score. The average age of accounts equals the total years and months of all of the accounts on your credit report from the open dates to the present, divided by the number of accounts. While 15% of your score doesn’t sound like much, especially when compared to “Payment History” and “Debt Utilization”, a longer credit history could help improve your credit score. Length of Credit History makes up 15%.
Credit Mix: 10%
Revolving Accounts: Revolving accounts are those that have a different payment each month depending on your current balance. These are accounts that you are not required to pay in full each month. You have the option to “revolve” some or all of the balance to the following month. Lenders charge you interest on the amount you revolve, and this is how they make money. Some examples of revolving accounts are credit cards and HELOCs.
Installment Accounts: Installment accounts are those that have a fixed payment for a fixed period of time. As with revolving accounts, you are not required to pay them in full each month. You are allowed to make a payment that is going to be the same every month until the loan is paid in full. Lenders charge you an annual percentage rate (also known as an APR), and this is how they make money. Some examples of installment accounts include mortgage loans, auto loans, and student loans.
Open Accounts (10+): Open accounts are probably the least common of the three account types we’ll profile. Also referred to as “open credit”, it is a hybrid of installment and revolving credit. The payment is not the same each month, and it is usually due in full at the end of each billing cycle. The consumer satisfies financial responsibility for the account when the bill is paid in full each month. This cycle can go on as long as the consumer has an account with the service provider.
Number of Inquiries (2–3): 10%
Credit inquiries are requests by a “legitimate business” to check your credit. As far as your FICO® Score is concerned, credit inquiries are classified as either “hard inquiries” or “soft inquiries”. Only hard inquiries have an effect on your FICO® Score.
Soft inquiries are all credit inquiries where your credit is not being reviewed by a prospective lender. These include inquiries where you are checking your own credit—such as checking your score in myFICO—credit checks made by businesses to offer you goods or services—such as promotional offers by credit card companies—or inquiries made by businesses with whom you already have a credit account.
Hard inquiries are credit inquiries where a potential lender is reviewing your credit because you have applied for credit with them. These include credit checks when you have applied for an auto loan, mortgage, or credit card. Each of these types of credit checks count as a single credit inquiry. One exception occurs when you are “rate shopping.” That is a smart thing to do, and your FICO® Score considers all inquiries within a 45-day period for a mortgage, an auto loan, or a student loan as a single credit inquiry.
We Will help you to dispute negative items in your payment history
We will show you how to maximize your debt ratio score, even if paying off credit cards is not an option.We can also help you to removing credit inquiries from your credit report. Most people are aware of the three credit reporting bureaus, Equifax, Experian and TransUnion. The average difference in scores between the highest and lowest of your credit scores, from the three bureaus, is 60 points. This is the result of the credit bureaus having different items on their report, which may be correct, incorrect or are not reported in full compliance with credit law. According to a recent study, nearly 80% of all credit reports have serious errors on them and this does not even include the even smaller errors for which we look. If you cannot remove at least 25% of the negative credit items from all three of your credit reports, we will refund 100% of your fee.
Information That Cannot Be In A Credit Report
Medical information (unless you provide consent)
Notice of bankruptcy (Chapter 11) more than ten vears old
Debts (including delinquent child support payments) more than seven years old
Age, marital status, or race (if requested from a current or prospective employer)
How long will certain items remain on my credit file
Delinquencies (30- 180 days): A delinquency may remain on file for seven years; from the date of the initial missed payment.
Collection Accounts: May remain seven years from the date of the initial missed payment that led to the collection (the original delinquency date). When a collection account is paid in full, it will be marked as a “paid collection” on the credit report.
Charge-off Accounts: When a delinquent account is sent to a collections company. This will remain for seven years from the date of the initial missed payment that led to the charge-off (the original delinquency date), even if payments are later made on the charge-off account.
Closed Accounts: Closed accounts are no longer available for further use and may or may not have a zero balance. Closed accounts with delinquencies remain for seven years from the date they are reported closed, whether closed by the creditor or by the consumer. However, the delinquency notation will be removed seven years after the delinquency occurred when pertaining to late payments. Positive closed accounts continue to be reported for ten years from the closing date.
Lost Credit Card: If there are no delinquencies, credit cards reported as lost will continue to be listed for two years from the date the creditor is contacted. Delinquent payments that occurred before the card was lost are reported for seven years.
Bankruptcy: Chapters 7, 11, and 12 will remain on one’s credit report for ten years from the filing date. A Chapter 13 bankruptcy is reported for seven years from the filing date. Accounts included in a bankruptcy will remain for seven years from the date reported as included in the bankruptcy
Judgments: Remain seven years from the date filed.
City, County, State, and Federal Tax Liens: Unpaid tax liens remain for fifteen years from the filing date. A paid tax lien will remain on one’s score for 10 years from the date of payment.
Inquiries: Most inquiries listed on one’s credit report will remain for two years. All inquiries must remain for a minimum of one year from the date the inquiry was made. Some inquiries, such as employment or pre-approved offers of credit, will show only on a personal credit report pulled by you.
In addition to starting the credit process…etc
Pay all of your bills on time, every time. This includes your utility bills, mortgage and auto payments, and all of your revolving lines of credit like credit cards. Check your credit report at least once a year. You can find out how to challenge bad information on your credit report here.
Never charge more than 30% of the available balance on any of your credit cards. Banks like to see a nice record of on-time payments, and several credit cards that are not maxed-out. If you are carrying high balances on your credit cards, then make paying them down below 30% a priority. Do use your credit cards – Many people who make mistakes with their credit believe that the best way to fix things is to never use credit again. If you are afraid that you cannot handle your credit cards correctly then the best policy is probably this one: Run only your utility bills on your credit cards each month, and then pay the balance in full by the due date. This ensures that your utility bills get paid on time automatically, and as long as you keep the habit of paying off your credit card balance each month your score will continue to go up. Leave the credit cards locked in a safe or drawer at home.
Keep your accounts open as long as possible – Even if you are no longer charging on the card. The best policy is to keep those unused accounts open, blow the dust off your card every few months to make a small purchase, then pay it off. How long each of your accounts have been active is a major factor in your credit score. Remember that this all takes time – Following the above steps consistently over a long period of time will increase your credit score and allow you to qualify for better loans and lower interest rates. Repairing your credit score does not happen overnight, so if you do these things for a few months and do not see a large increase in your score, do not give up. They are all habits that you will want to maintain throughout your life, as they will help you to keep your finances and lines of credit under control.
FAQ's
Unfortunately, paying off collections or charged-off items may actually harm your credit scores because it re-ages old debts and the accounts are derogatory, so paid or unpaid, they are derogatory.
Believe it or not, many collectors and creditors can not prove their reporting is accurate or that you owe the debt in the first place. They have insurance which covers their “loss It only benefits you when these derogatory accounts are challenged for deletion.
And, your time, attention, and money is better invested in building a new foundation. There are very specific credit accounts that you can establish, which guarantee your approval despite the reporting of derogatory accounts.
Beyond adding new positive credit, consumers benefit greatly from an experienced, knowledgeable professional to carry out the dispute process on their behalf. Again, credit repair is legal and ethical. Bureaus discourage consumers because they/creditors benefit from consumers who suffer with low scores and credit profiles. Those with bad credit pay at least 10x more for the same product or service than those with good/great credit scores.
In most cases, No.
Closing revolving lines of credit typically hurts scores because most people carry high balances month to month, so their utilization or credit usage is high.
Utilization controls 30% of our credit scores, so we want to show as little usage as possible by paying down or paying off balances before the billing cycle closes, before the statement is issued.
By closing a credit card, you then lose that “available credit, credit + payment history.
Another reason it usually hurts your scores is because most people do not have a sufficient number of credit lines + mix of credit in the first place, so when a credit line is closed in these two specific examples, scores suffer.
Revolving credit payment history, the average age of revolving credit, and utilization percentages are responsible for over 65% of your credit scores.
If you are paying fees on a credit line and wish not to, it is important to stragetize so that when you do close the account, you are sure your utilization will not increase, which makes your scores decrease, and that you have enough supporting, active lines of credit reporting before you close that account.
Great question!
Creditors and collectors pay 1, 2, or 3 of the big bureaus Transunion, Experian, and Equifax to report. At any time a creditor/collector may spontaneously remove negative information.
Just the same, they may report to your credit.
It’s important to understand each of these companies stands alone.
Some bureaus report more or less information than another, another explanation for varying credit scores.
Their responses to disputes also differ, which is why we call this journey a “process.”
Fair Credit Reporting Act (FCRA) was enacted to hold creditors liable for the information they report, and how they report it. This set of laws is also what makes credit repair legal and ethical.
Even if you owed a debt in the past, it does not mean the creditor is accurately reporting every aspect of reporting to each bureau. By law, they must report each account 100% accurately; correct it, or delete it from your credit file.
The FCRA, which mandates that most negative items must be deleted from the credit report in no more than 7 years from the date of the last activity (DOLA).
Has the debt past the statute of limitation? You may now live in a state that has an SOL of 6 years, but the original debt was accrued in a state where the SOL is 4 years, therefore, they can not reasonably sue you, and if they tried, raising this one argument would dismiss the case.
Can they prove you owe the debt? Do they have a contract bearing your signature?
Are they making promises to delete the item, but unwilling to first mail an agreement in writing stating that?
Never, ever call and confirm any of your personal information. They typically do not have your full information and ask you to “verify” so they can fill in the gaps. Furthermore, the debt can be a phantom debt you paid in the past, or never owed. Beyond that, it may be well past the SOL and the 7-year mark and the collector may be violating your rights under the Fair Credit Reporting Act and or Fair Debt Collection Practices Act.
Please ask us before contacting these companies for a free analysis of the offer.
Never blindly jump to pay a collection account because of a settlement offer because there are many factors to consider, including but not limited to;
Is this collector reporting to your credit reports? (And, if they are, this does not mean you are legally liable to pay)
Through our services, 93% of our clients see their credit score increase 10 points or more in the first 35 days. Over the full 180-day term of the contract, the average credit score increase is 80 points. See full statistical breakdown
There are two sides to the credit score battle. Sometimes, the creditors and the credit bureaus have done absolutely everything right and we have no case against them. On average, clients are able to remove 70% of the negative items from a credit report.
We will guide you through the process from start to finish and prepare all your documents for you. We have a superb knowledge of credit scoring and experience working with creditors and credit bureaus. It may be difficult for an individual to communicate with creditors and bureaus without an adept understanding of their techniques and regulations in place for credit reporting. We have spent a great deal of time learning the laws that will help you to remove negative information on your report, which enables us to offer you a flawless, money back guarantee system.
Items cannot come back as long as the item is current or paid at the time of removal or if the collection is older than three years. This holds true except in very rare circumstances.
With our assistance and document processing, our clients have had great success with bankruptcies, foreclosures, collections, charge-offs, repossessions, medical bills, credit card debt, inquiries, late payments, old addresses, judgments, tax liens and student loans.
Results are not guaranteed! No credit company can guarantee results or a specific outcome. It is a direct violation of the Credit Repair Organizations Act. We can share the awesome results our customers have received in our program and allow you to make a decision for yourself
You are entitled to a 100% refund on all monthly payments if :
- You do not remove more than 25% of all the negatives worked on.
- You have had six months from the time you retain our services.
- You have at least four negatives on the credit report at the time of sign-up.
- You have not used a credit-consulting agency nor attempted to repair your credit two years previous to signing up for our services.
- You agree to send updated reports from the three credit bureaus to us within 5 days of receipt.
(Clients should receive updated credit reports every 15-45 days. It is the client’s responsibility to make us aware if updated reports have not been received)
Contrary to what credit bureaus want you to believe, credit training does work in most circumstances. But it only works if you are getting the best advice from an experienced professional. Anyone with a credit score below 720 can benefit long-term from the advice and information provided through credit education. However, there are limiting factors that will prevent us from helping you. Two main factors are: (1) your financial situation and/or (2) the time frame in which you need to reach your results. It is possible to remove anything from a credit report, even accurate items. For instance, if the creditor makes mistakes or does not adhere to the specific time frame, the negative item may be removed.
Yes, credit training is legal and our credit education and document processing services will help you to use the law in your favor. That law is called “The Fair Credit Reporting Act.” The FCRA gives you the right to dispute any item on your credit report. If that item cannot be verified within a reasonable time (usually 30 days) it must be removed. Studies have shown that 79% of all credit reports contain errors. This is nearly 8 out of 10 reports. Therefore most credit reports improve immediately. For items that disputed that are not errors, a creditor or furnisher is often unable to find the records or signed documents within the allotted time and the item gets removed. Sometimes the furnisher will say it has been verified by not offer proof. It is our job to prepare documents that challenge this and we are very skilled at that