Can you REALLY trust a Credit Repair Company?
As a well known finance and credit guru I am commonly asked if credit repair really works. Credit repair can be an extremely effective tool if performed the right way.
Be careful which credit repair company you choose because many collect money from consumers for credit services, but the credit services they perform are nothing more than mailing simple dispute credit letters.
Some companies perform minimal disputes only, for example it might be disputed that the item really does not belong to the consumer or that the consumer never really went late on the derogatory item. The hope is that the creditor will not respond to the dispute and the items will be removed off the credit report as a result. These types of credit disputes depend on creditor ignorance or human error to be effective.
Over the last few years the credit bureaus have wised up to these credit repair methods. To counter, the credit bureaus now use sophisticated computer systems named E-Oscar and OCR.
The credit bureaus E-Oscar and OCR computers sniff out letters which appear to come from credit companies and then automatically respond to those disputes calling them frivolous. The credit bureaus E-Oscar computer then electronically processes the dispute nearly eliminating human error.
The credit bureau computers now render these older types of disputes minimally effective. Some items will get removed to simply be put back on the report a little later, and typically the only accounts that will be permanently removed are older accounts which have minimal effect on the credit score.
BUT, all is not lost
TRUE credit repair is actually very effective, but it also is time consuming. Accounts have to be disputed to the credit bureaus in a mythological manner and the most effective disputes are done direct with the creditor themselves.
There are hundreds of consumer protection laws such as FACTA, The Fair Debt Collection Practices Act, HIPPA, The Fair Credit Billing Act, and many more which can be used to get your negative credit items removed from your report.
Many creditors blatantly violate multiple state and Federal laws with the hopes that you do not challenge them.
Truthfully, most consumers do not know enough about the laws to defend themselves making them easy targets for creditors. You would have to spend countless hours researching hundreds of consumer laws to know enough to challenge your creditors and win.
But, using these creditor Federal law violations as leverage to force the creditor to delete the negative items is a VERY effective tactic to use to repair your credit. Credit companies who use this tactic and participate in direct creditor disputing typically see deletion rates of 70% or higher.
The drawback is in order to effectively dispute and delete your negative accounts, you will spend countless hours learning how to dispute and delete your negative credit items. Or you can find a highly recommended professional company to do it for you instead. But make sure you find a reputable company.
There are only a few truly 100% legal credit companies in the United States. One of the most popular companies who produce the strongest and fastest results is Elite Credit out of the Tampa Florida (www.perfectcreditfast.com.) I have personally seen their results, and even I am impressed. You will not find better, faster or stronger results at such an affordable price anywhere else.
Or you can visit online credit forums and start learning how to go at it alone. Whatever you decide to do, DON?T decide to do NOTHING at all. Bad credit is estimated to cost an individual consumer over $1,000,000 in a 30 year time period.
Strong dispute methods could remove over 71% of your negative items, and this could be the difference between you just struggling living paycheck to paycheck or living your fantasy life.
Get started today with fixing your own credit, or hire a professional. Whichever you chose get started now on rebuilding your credit profile and your financial security.
Understanding FICO 08
Fair Isaac has finally released their anticipated FICO 08 score model. This new credit scoring formula has many differences from the previous FICO model.
FICO 08 is the first big change in Fair Isaac?s scoring model since the 1980?s. Fair Isaac proudly predicts this new model will reduce the default rate on loans by 5-15% from their previous version.
Many experts estimate it could actually improve the current risk model by upwards of 50%. FICO 08 was pushed to be released in 2009 in response to changing economical conditions.
FICO is used by most large banks and financial institutions so understanding the new changes are crucial. Many lenders will quickly be integrating this new scoring model into their lending decisions.
Many of the basic principles of FICO will remain the same. The score range of 300-850 will continue with the new model.
One of the most positive changes is that collection accounts with initial balances less than $100 will NO LONGER have an impact on the credit score.
Very small collections such as small medical bills will have no affect on the credit score if the initial balance on the account was less than $100 at the beginning of the reporting of the item on the credit report.
The new model will also reflect less of a score affect for consumers who are late in one area, but not late in other areas on their credit. So if a consumer is occasionally late on an auto account, the score change will be less than if that consumer was consistently late on their auto, mortgage, and credit card accounts.
The credit score impact of an authorized user account will also change with FICO 08. There will be no more score increases for certain forms of ?piggybacking?. This is when a customer with credit problems or no credit gets added as an authorized user to accounts of someone else with good credit to boost their scores.
With FICO 08 their will only be a score improvement for authorized user accounts for the consumer?s immediate family.
If the consumer has too few accounts, closed accounts, or has inactive accounts, the damage to the score will be greater than older FICO models.
FICO 08 now contains more scorecards with between 12- 16 estimated. This is versus the 10 prior scorecards that existed with older FICO model. These scorecards are secret mathematical models that are used to assign a credit score.
Each scorecard is specific to an industry. For example the Mortgage Industry Option Scoring Model uses its own scorecard and weighs past mortgage history heavier than all other accounts while calculating a credit score.
FICO will be a big upgrade for Fair Isaac. Most lenders and the credit bureaus are quick to implement this new model due to its increased ability to accurately predict credit risk.
For more questions on credit scoring and enforcing consumer credit rights visit www.PerfectCreditFast.com.