CREDIT REPAIR FREQUENTLY ASKED QUESTIONS (FAQs)
- Is Credit Repair a scam?
- Is credit repair legal? Why is credit repair necessary?
- How long does the credit repair program take to complete?
- How many points will my credit score go up?
- Why is my credit score such a big thing?
- How long do negative entries stay on my credit report?
- How do inquiries affect my credit score?
- What is expected of me while you’re working to repair my credit?
- Can I repair my credit myself?
- What if I only have a few negative items on my credit report, do I have to pay full price?
- When will I see results on my credit score?
- In all honesty, I’ve made some mistakes with my finances and I can’t help but blame myself for my credit being messed up. Why should I even think about credit repair?
- I have collection agencies calling me day and night, what can I do to make them stop?
- What is considered a good credit score?
- What factors determine my credit score?
- I saw an advertisement for a company that offered to set up a new credit identity with the credit bureaus, is that a good idea?
- Can you promise or guarantee that my credit score will go up?
- What do I need to know about “charge offs?” What are they; what do they mean; what effects do they have?
Q: Is Credit Repair a scam?
A: Unfortunately there have been quite a few companies that have given our industry a bad reputation. We resent those companies even worse than the Federal Trade Commission or you. Credit repair is an honorable profession when practiced by honorable people. When practiced by dishonest, dishonorable people, you end up with credit repair scams, just like you end up with bad cops, bad lawyers, bad doctors, etc. when those bad people are engaged in those professions. We pride ourselves in being honest and honorable. A good percentage of our referrals come from satisfied customers and from mortgage professionals who know the good we can do for their customers and the honest, honorable and effective way in which we will do it. > top
Q: Is credit repair legal? Why is credit repair necessary?
A: Absolutely, credit repair is legal. Under federal law, specifically, the Fair Credit Reporting Act (FCRA), consumers have the right to dispute information that they feel is inaccurate, untimely, misleading or unverifiable. Consumers have the right to dispute the information on their own, or they have the right to hire a professional to act for them.
Necessary? Not-for-profit consumer advocacy groups have studied the issue of accuracy in credit reporting for well over a decade. These groups, which are not involved in credit repair efforts, found “sloppy credit bureau practices that lead to mistakes on credit reports—for which consumers pay the price". One recent study found that 25 per cent of the credit reports it surveyed contained "serious errors that could result in the denial of credit, such as false delinquencies or accounts that did not belong to the consumer". A further finding, an astonishing 79% of the credit reports contained mistakes. Again, necessary? Only if you care about the accuracy of the information in your credit file. And if you don’t care, who will? Obviously, not the credit bureaus. > top
Q: How long does the credit repair program take to complete?
A: There is no accurate or effective way to know how long it will take to do the best job possible for you. On average, our program takes between 90 to 150 days to complete. > top
Q: How many points will my credit score go up?
A: We cannot calculate that, nor can we guarantee a specific point increase. However, our average client has his or her score go up 125 points after completing the program. > top
Q: Why is my credit score such a big thing?
A: Calling your credit score a “big thing” is probably a gross understatement. It’s more than that. Your credit score will have an impact on every dollar you borrow, whether it’s for a home, a car or any type of credit purchase. The grantor of credit will use your credit score to determine whether you get credit, what your credit limit will be and what interest rate you will be charged for the credit. But the impact goes beyond credit. Many employers are now looking to credit scores as they seek out the best and most reliable applicant for a job they are filling. Also, lots of landlords are looking to credit scores to see whether they want to offer an apartment to a particular applicant. If you credit score is low, plan to look for another available apartment. > top
Q: How long do negative entries stay on my credit report?
A: Most of the entries in your credit report may stay for only seven (7) years. If you have declared personal bankruptcy, the bankruptcy may be reported for 10 years. After that period of limitations, 7 or 10 years, a credit bureau or other reporting agency cannot disclose the information in your credit file unless you are being investigated for a credit application of $75,000 or more or for an application to purchase life insurance of $150,000 or more. It is the Fair Credit Reporting Act that requires the deletion of obsolete information after that period of 7 or 10 years. Remember, there is nothing that says these items have to stay on your report that long, this is where we come in. > top
Q: How do inquiries affect my credit score?
A: First, let’s understand what a credit “inquiry” is. A credit inquiry is an item on a credit report that shows that a business with a "permissible purpose" has previously requested a copy of the credit report.
The only inquiries that are supposed to count toward your FICO score are the ones that result from your applications for new credit. That one type of credit inquiry that is to count toward your FICO score is triggered when you apply for a mortgage, auto loan or other type of credit and the lender is authorized to request a copy of your credit report. These inquiries occur as a result of your own action, and these will appear on your credit report and will be included in your FICO score.
The number of inquiries may or may not be a factor in the score, and when it is a factor, it is typically not a strong one. The imprecision of that statement is troubling to New Horizon Credit Solutions, LLC. It’s like: We’ll do what we want at the time and there’s nothing that you, the consumer, can do about it.
Inquiries that occur from a consumer requesting their own credit file are not supposed to be used in determining the score. Also inquiries that are incurred when lenders access consumer credit files in the process of pre-approved credit solicitations or for managing existing accounts are not used by the score, but often times do. We highly recommend you remove your name and information from these pre-approval data bases by going to www.optoutprescreen.com and choose the option to “permanently opt out”.
One piece of information of which the credit consumer should be aware has to do with “rate shopping” and “shot-gunning.” Let’s try to make something complicated as simple as possible. If you approach a realtor or an auto dealer to purchase a home or car, their search for a “best rate” may cause multiple lenders to request your credit report, never mind that you’re only looking for one loan. To compensate for this, the credit score is supposed to ignore all mortgage and auto inquiries made in the 30 days prior to scoring. The good: If you find a loan within 30 days, the inquiries won't affect your score while you're rate shopping. The bad: Don’t dare to become ill or distracted so you don’t find your loan in that magical, mystical 30 day “grace” period. Supposedly – and this is good, if it works - the credit score searches your credit report for auto or mortgage inquiries older than 30 days. Those inquiries that fall in the “grace” period are to be counted as just one inquiry when figuring your score. That’s from one version of the scoring formula, With older versions of the formula, the shopping period or “grace” period is any 14 day span. Newer formulas view the “grace” period as 45 days. Your task is to find which formula will be used on your credit report, and that’s a question we can’t answer. We’re not sure who can. Get this: Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score. Could it be possible the reporting agency will choose the formula to put the consumer in the worst light possible so higher interest rates can be charged? You decide.
More information on credit “inquiries” > top
Q: What is expected of me while you’re working to repair my credit?
- Do not apply for any additional credit.
- Forward any and all correspondence from the credit bureaus or your creditors to us in a timely manner.
- Something you’ve read elsewhere on this website: Learn the dos and don’ts of credit consumerism and know and use your rights as a consumer! > top
Q: Can I repair my credit myself?
A: Yes you can. That right is guaranteed you by the Fair Credit Reporting Act. However, some things are easier said than done, and restoring your own credit is like repairing your own transmission or representing yourself in a court of law; it is possible, but you must decide if you are willing to take the time, acquire the knowledge and assume the risks of doing it yourself. Most people choose to allow an attorney to represent them in court because an attorney better understands the complexities of the legal system. With our reasonable rates, you can see why people choose for us to do the job for them! > top
Q: What if I only have a few negative items on my credit report, do I have to pay full price?
A: If you only have a few negative items on your credit report, then we can offer you a reduced rate. > top
Q: When will I see results on my credit score?
A: You may actually see improvements on your credit report and credit score in as little as 30 days! It can be that fast! > top
Q: In all honesty, I’ve made some mistakes with my finances and I can’t help but blame myself for my credit being messed up. Why should I even think about credit repair?
A: It’s good that you’re holding yourself accountable. That probably means that you’re working on changing your ways of doing things and you’re probably on the road to recovery. Good for you. Still, it is very likely that your credit report and credit score is much worse than your credit performance. We talk about the inaccuracies in credit reports all through this website. With those inaccuracies, your credit score may well be unfairly and unjustifiably lower than it should be. Remove those errors, and you’ll be given the fighting chance you deserve to bounce back from your credit woes.
By the way, people such as yourself who have legitimate and extensive credit problems seem to be far more likely to have serious and more numerous errors on their credit reports than even the mainstream credit consumer. That’s the proverbial “kicking someone when they’re down” or “adding insult to injury.” Why are there more errors than usual? Logic would say that when an account falls into a negative status, it gets more “attention” than the mainstream account. It may well be transferred to a different unit or department where the account number may be altered or the name of the consumer or the creditor may be altered in some way. Such is a breeding ground for mistakes. The breeding grounds expand when the account is sent into collection as the account may well show up on your credit report as two or even three separate accounts in collection. Anyone who has had an account in collection knows that collection accounts change hands like the weather. This often makes for even more repetition in the showing of the account in collection. The change from one collection agency to another may be seen as triggering another statute of limitations start date, which may result in that negative account being reported well beyond the proper expiration. An account of such an age that it should not be reported any longer may show up as being a brand new account in collection.
That’s why you need to think about credit repair! > top
Q: I have collection agencies calling me day and night, what can I do to make them stop?
A: Download our Cease and Desist letter > top
Q: What is considered a good credit score?
| A: |
- 700 - 850 -- Excellent or Very Good Credit
- 680 - 699 -- Good Credit
- 620 - 679 -- Okay or Average Credit
- 580 - 619 -- Low Credit
- 500 - 580 -- Poor Credit
- 300 - 499 -- Bad Credit
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Q: What factors determine my credit score?
A:Visit our resource center to learn how your credit score is determined > top
Q: I saw an advertisement for a company that offered to set up a new credit identity with the credit bureaus, is that a good idea?
A: NO, this is called File Segregation and it is an extremely illegal practice that could get you into legal trouble. Our advice? Run, run as fast as you can. > top
Q: Can you promise or guarantee that my credit score will go up?
A: No, and any company that tells you they can should be avoided at all costs. The Credit Repair Organizations Act make it illegal for any credit repair company to promise your credit score will increase. > top
Q: What do I need to know about “charge offs?” What are they; what do they mean; what effects do they have?
A: “Charge offs” are a serious negative in the world of credit. Charge offs occur when grantors of credit write the debt off their books as uncollectable rather than investing time and legal fees to try to collect them. A truly serious negative mark on your credit report, many credit experts feel that only bankruptcy and foreclosure are worse.
Why are charge offs so bad on your credit report? Regardless of whether these companies are actively seeking repayment of the debt, the debt is still owed by you to the company and remains as a valid debt. If you’ve trying to buy a home or refinance an existing home, most mortgage companies will require that you pay off these debts. Otherwise, these debts can be turned into a lien against the property.
When you attempt to sell your home, the debt of the charge off lien has to be paid in full to clear the title. The lien holder may be entitled to interest in addition to the principal of the debt. In the financial/legal pecking order, liens hold a higher position than mortgages and as such, liens have to be satisfied before the mortgage company can get its money. If the mortgage company has to foreclose and you have liens on your home along with the mortgage, the liens have higher priority or position and the mortgage company could potentially lose significant amounts of money.
Keep in mind that the debt being charged off is not the same as the debt being paid off. The grantor of credit can seek payment of the debt later. They have the right to sue in a court of law and seek a judgment again you at any time until the statute of limitations expires.
Again, it’s in the event of home mortgages where you run into really serious problems with a charge off, and those problems will last for seven (7) years when the charge off finally will no longer be reported on your credit report. Your credit will suffer and you will be identified as a poor credit risk, but you at least won’t be asked or forced to pay off the charge off debt when you take out a loan on a car or buy something else on credit. You can see why having a charge off in your credit history is almost as bad as having a bankruptcy, with the added trauma of still owing for the debt, unlike the case of bankruptcy. > top |
