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PERFECT SCORE BOOSTING STRATEGY WITH CREDIT CARDS!

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 1^st 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 1^st (due date), BUT you have your power bill or cell phone bill – or any number of bills that come out automatically on the 2^nd and this creditor reports to the credit bureaus on the 5^th of every month.  Those bills that are paid by this account and anything else charged between the 1^st and the 5^th 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

david@cmscreditrepair.com

www.cmscrditrepair.com

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....


SCAM.


REAL CREDIT REPAIR is done by REAL Credit Professionals.
Credit Management Solutions
http://www.cmscreditrepair.com
904-579-4312

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
904-579-4312