Friday, November 21, 2014

Should I get a pre-paid credit card?

Simple answer is "almost never."  They are basically gift cards, nothing more.  It's understandable that some people have trouble obtaining a bank account, but, when/if you can, you should avoid using pre-paid credit cards.

As stated above, pre-paid credit cards are basically gift cards.  In fact, many of us have received these cards AS gifts in our stockings or event cards.  Getting these are fantastic gifts and we all love them, however, there is virtually no upside for consumers to get pre-paid credit cards for personal use, especially when considering the normally high fees that are associated with these cards.  To top it all, pre-paid cards do not report to your credit report.  If you're going to use your own money to obtain your own pre-paid credit card (that you will also use), you may as well put your spending habits to work building your credit!

An alternative to pre-paid credit cards are SECURED credit cards.  MOST secured credit cards report to all 3 credit bureaus; you'll be adding history to your credit report every time you use these cards.  Important NOTE: Your deposit is the collateral for which you are granted the line of credit.  It is NOT meant to be the replacement to making your payments on your secured credit card.  Make your payments like you would any other bill.

For a list of secured credit cards with some great rates, CLICK HERE!

Monday, November 3, 2014

Denied for "Pre-Approval"????? Credit Bureaus selling your information.

That notorious junk mail.  The Credit Card offers.  The PRE-APPROVAL letters. It does have it's place.  We've all seen one that generated genuine interest; ESPECIALLY for those that have been denied the past few times they applied for a credit card or a loan.  A Pre-Approval is NOT an's simply a direct mail advertisement.  Period.

The company that sent you that pre-approved letter may have a "special code" generated for your "approval."  They may have included an application to fill out or a website to visit to more quickly generate your approval status.  No matter how official these may look, these are misleading and confusing.

These companies have massive marketing budgets and departments designed solely to get consumers to apply for credit regardless whether they qualify or not.  The truth is, these companies PURCHASED your information from the credit bureaus along with hundreds, thousands, and possibly millions of others that possibly fit their marketing criteria (credit scores, income levels, demographics, etc). 

The credit bureaus are not on your side.  They LOVE it when these companies purchase this information as it will generate FURTHER revenue for them.  They generate revenue when they sell your information to be marketed to and then sell it again in the form of your credit report when you apply for these offers. Just remember, these are simply advertisements and you're receiving them because you fit the model to be a lead for this ad.

A hard inquiry into your credit report will still be required and can count against your scores when.  Too many of these inquiries WILL hinder your scores.  Be careful and selective; pre-approval letters are simply ads to get you to apply.  It is very common for consumers to receive these letters and still be denied.  It will NEVER hurt your credit to receive these offers.  It CAN hurt your credit if you apply for too many of them.
If you'd like to be removed COMPLETELY from these go to:

Be careful, be educated, be informed!
Your friends at Credit Management Solutions

Friday, October 3, 2014


As we now know, 35% of your credit score is based upon your payment history and 30% of your score is based upon your "Credit Utilization."  In other words, your CREDIT CARDS can have a major impact on your credit scores because they have BOTH a payment history AND are the element that generates your credit utilization.  Credit Cards have an impact on 65% of your credit score!
Simply put, credit utilization is the ratio of the amount of credit offered to you vs. the amount you currently use.  If you have a credit card (CC) with a $1000 limit and you carry a balance of $600, you are 60% credit utilization.  Same thing applies to multiple cards, if you have 10 cards with a $1000 limit each, and you carry a balance of $600, you still have a 60% credit utilization.
For a GOOD credit utilization, you want to be at our below 30%.  When you are below 30% utilization, your score gets positive influence from your credit cards (assuming you’re making your payments on time and don’t forget that AGE of accounts does account for 10% of your scores as well).
Now, what is PERFECT credit utilization and how do you get there? 
Common misconception: “I pay off my credit card in full every month so I carry a $0 balance.  That’s perfect right?”  WRONG. 
First of all, the utilization is based upon when your creditor REPORTS to your credit report.  Let’s just say a credit card is due on the 1st and you pay it to $0 on the due date every month.  This does NOT mean your credit report will say $0 balance on this card.  It’s based on WHEN the creditor reports information. 
Example, you pay off this credit card in full every month on the 1st (due date), BUT you have your power bill or cell phone bill – or any number of bills that come out automatically on the 2nd and this creditor reports to the credit bureaus on the 5th of every month.  Those bills that are paid by this account and anything else charged between the 1st and the 5th show up as the “current” balance of the account on the reporting date.
Secondly, Perfect utilization is actually 1%. Why you ask?  Credit reports can’t see that you are paying a debt off constantly.  If you pay it down to $0 every month and it reports $0 every month, the credit scoring model ONLY sees a carrying balance of $0.  If you are DEAD serious about building your credit score, you want to develop a strategy that reports a 1% utilization to your credit!
Credit Cards – Perfectly Utilized:   MOST if not ALL of creditors report to the credit bureaus your account information within 7 days of the due date.  If you want the BEST possible report, pay down your balance to 1% of the line (of some negligible number - $5); then, do NOT USE YOUR CARD FOR 7 days.   You WANT the creditor to report that negligible (1%) balance on their reporting date.  1% Credit Utilization is BEST POSSIBLE ratio for your score AND the credit scoring models can tell that you are constantly using the card and paying back down to PERFECT utilization.  After that 7 day window, you’re safe to again begin using the account as you normally would.

-David Villmow
Director and Sr. Credit Advisor at Credit Management Solutions
(904) 579-4312

Friday, September 26, 2014

Credit Repair SCAM - how it worked.

Credit Repair Services received a bad reputation in the past few years because of some shady individuals out to make a quick buck off on unknowing consumers.  The scam revolved around the among other things, the XB codes on credit reports in response to disputes; unscrupulous individuals saw a chance to make a quick buck by "guaranteeing" immediate improvement of credit scores.  They charge outrageous up-front sums of money; collected the money and then filed a blanket "*not mine" dispute on every negative account on your credit report.

*Lying on a dispute is never REAL credit repair.  The only form of real credit revolves around FACTUAL Disputes - protection of consumer rights as laid out by FCRA, HIPPA, FACTA, etc.

Anyway, these scam credit repair companies take your money, file the disputes, and then after a few days re-pull your credit report showing the AMAZING jump in credit scores seemingly overnight.  This is exposed as a scam after the "dispute" (I want to call lying) process runs it course and these items that were disputed suddenly begin counting against the client scores again.  When an item is in "dispute," it will state so on the credit report and also place a code (XB) on the report so that the scoring model does NOT account for the derogatory information on the account against the score.  Once this "in dispute" code (XB) is removed from that account - it is again accounted for in the score.

Hmmm...remember that "company" that took your money...they are suddenly no where to be found, don't return phone calls....


REAL CREDIT REPAIR is done by REAL Credit Professionals.
Credit Management Solutions

Tuesday, September 23, 2014

Do Not File Disputes Online with the Credit Bureaus! Why!?

Do Not File Disputes Online with the Credit Bureaus!
Why?  "Expeditious Dispute Resolution" Section in FCRA (Section 611a(8)) states, "The agency shall not be required to comply with the paragraphs 2, 6, and 7 with respect to that dispute if they delete the trade line within 3 days."

Paragraph 2 - Forward your dispute to the creditor along with the provided documentation.
Paragraph 6 - Send you the results of the dispute in writing
Paragraph 7 - Provide the items that verify the information

Disputing your accounts online through this "expedited process" essentially ensures that NOTHING happens permanently or positively to your credit report.  In response to an online dispute (which is ENCOURAGED and desirable by agencies (Equifax, Experian, and Transunion), the agency in question can do 1 of 2 things. 

1 - Delete the item within 3 days.  Sounds great, right?!  Wrong.  If they agency deletes the item within 3 days, the agency does not have to comply with paragraphs 2,6, and 7.   (Paragraph 2)They do not have to forward the dispute to the creditor.  Creditor isn't even notified that the item is in dispute. (Paragraph 6) They do not have to tell you what they did.  (Paragraph 7)They don't have to provide any information needed to verify the information.  What happens here is you file this dispute, you hear nothing back from anybody and when the next period comes back around for the original creditor to report to credit (creditors report information typically every 30 days) - the item reappears on credit EXACTLY as it was before.

2 - Send your dispute using the e-Oscar dispute resolution system that is in place.  This system takes your entire dispute and dilutes it down to 1 of 26 existing codes.  It should be mentioned that over 90% of all online disputes are diluted into one of 5 codes rendering the other 21 codes literally unused or useless.  The creditor then received a notice from the credit bureau with a code about your account (such as code 001 - "not mine"); the creditor checks it's records and replies back - verified account it's yours.
Long story short - the credit agency either does nothing, doesn't tell you it did nothing, and nothing happens OR the credit agency asks the original reporting creditor if they information they reported is correct.  In every single case, the creditor is going to check its records that it used in the FIRST place to report to your credit report and reply back that the information is correct.

Do not put yourself through this experience.  Call a professional credit restoration/repair/consulting company.  Get real advice on how to protect YOUR rights as laid out by FCRA!

Credit Management Solutions LLC