Credit Repair & Debt Relief Issues

Beyond how to apply for a credit card, chances are, you were never taught credit education in school. A working knowledge of our credit system is one of the most important things you can have in today’s society. With more than 50% of the US population never seeing their own credit reports, and nearly 90% not able to read their own credit reports, I think you will find this information very valuable.

I think it is everyone’s dream to have perfect credit, and be able to apply for anything without worrying about being turned down. But do you really know what perfect credit looks like? In this article, I will outline the perfect credit profile, and share with you how you can get on the road to achieving perfect credit for yourself.

First of all, I want to start by saying that some of what you read here may not make sense to you, because you have probably been told things such as it is good for your credit if you pay off your credit cards each month and not carry a balance. Where you would be correct in thinking that it is better for your personal finances, it will only cause you grief where your credit is concerned. There are many common myths when it comes to credit, so sit back, relax, open your mind, and get ready to learn.

Maintaining the proper mix of accounts

For optimal credit, you will want to have the proper mix the following account types. Too many of some types of credit will hurt your credit scores.

Mortgage Accounts (Ideal 1-2 accounts): Having at least one mortgage account will be an advantage to your credit. If you have not yet purchased a home, this gives you something to work toward.

Installment Loans (Ideal 1-3 accounts): Installment loans such as auto loans are good, but you don’t want to have more than a couple of them. Owning too many auto loans or other personal installment loans can cause you to look over-leveraged. There are also other types of installment loans that are not as valuable for your credit such as easy credit loans for furniture, household goods, etc. These may be a good way for someone with little to no credit to establish credit, but they are not the best way to obtain the best scores.

Revolving Accounts – Credit Cards / Store Cards (Ideal 3-5 accounts): This category of account has a great deal of variance among the type of credit cards and store credit obtained. Major credit cards are more valuable to your credit than department store cards. You should shoot to have no more than about 3-5 of these type of accounts. The lower-end credit accounts such as mail-order catalogs are not looked at favorably by lenders. As with any low-end credit accounts, the more high-end accounts you have the less they hurt you.

With all the above, the more seasoned the accounts are the more weight they carry to affect your credit score. And when it comes to credit cards and store credit, you want to be sure that you keep your revolving balances below 50% of the available limit to maximize your credit. Be sure to keep in mind that once you cancel a good account, it will only remain on your credit for two years. If you cancel a seasoned account and it falls off your credit, your scores will most likely drop.

Follow this blue print to create the perfect credit profile.

Jon Ochs has over 12 years experience in the credit and debt industry and is the founder and CEO of NCA Credit Repair, one of the most trusted and respected Credit Report Repair companies in the nation. Get more information about credit repair and debt settlement.

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Can you buy a higher credit score by purchasing seasoned trade-lines? This questions seems to come up more and more these days. The answer to this is a bit complicated, so let me see if I can give a simple easy to understand answer.

Purchasing a seasoned trade-line is the process of paying a monthly fee for having your name added as an authorized user to a seasoned credit account for the purpose of getting that seasoned account to report on your credit report. The goal of doing this is to add a good trade-line to your credit that will boost your credit scores. 

Pros of paying for and adding seasoned trade-lines:Over the past this practice has been somewhat successful for those who already have good, clean credit, and just need a small boost in their credit scores to obtain financing they are currently seeking. You can add the trade-line(s), pay for them just long enough to get your financing, then stop paying for them and let them fall off your reports. Although this seems to be a simple and easy solution, there are some considerations that make this not so great.

Cons of paying for and adding seasoned trade-lines:  There are several problems with using seasoned trade-lines that have now raised the brows of the credit bureaus as well as federal officials. Although there is nothing illegal about adding another person to your account, the biggest problem is in how these seasoned trade-lines are being sold. As I mentioned above, they are only appropriate for someone with already good clean credit, yet there are hundreds of companies on the Internet selling trade-lines as a method of credit repair. Buying seasoned trade-line when you have derogatory trade-lines on your credit will do little to nothing to boost your credit. In fact, it is a ridiculous waste of your money. With the cost of these trade-lines ranging from several hundred to several thousand per month per trade-line, it is not an effective solution for 99% of those who seek them. The other issue is that there are now changes underway by the credit bureaus to not include authorized user accounts in the credit scoring model. This will completely negate the effectiveness of seasoned trade-lines altogether.

The bottom line: For those seeking to improve their credit, there are far better, less costly, and more effective ways to accomplish this. For some great tips, visit our credit repair articles area. In addition, if you have bad credit and are in need of credit repair, there is no company that does it better than NCA Credit Repair. Call them today and get a free consultation and make the decision for yourself.

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Over the past few years, debt settlement has become a hugely recognized method of getting out from under a large amount of debt ($10,000 or more). Keep in mind that this program is strictly for those who are in financial distress only. If you find yourself in a position where you can no longer make your minimum payments, a debt settlement program can set you up with a new structured monthly payment of about 1/2 of your current minimums. That payment goes into a trust account managed by a debt settlement firm and continues to build a balance over time. As the trust funds accrue, those funds are used to settle your accounts one at a time for significantly less than what is owed.

The most common question that people have is why would a creditor settle for less than what is owed. First of all, yes they do and they do it every day. The reason is because if you are truly in financial distress and the debt settlement attorney has done a good job of getting that information across, the creditors understand that taking a fraction of what is owed is better than getting nothing at all. It is also more financially sound for creditors to take some money and call it good, than spend more money trying to pursue you when you may not have the means to pay.  There are also some more intricate details at play here when your accounts are sold to collections for about 15-30% of the balance owed on the account. Now the collection company is pursuing you for the entire balance, but even if they settle the account with you for 20-50%, they make a nice profit. Yes, you read that right… you settle the account for less than you owe and the collection company makes a profit! 

If you are interested in getting a quote for a debt settlement program, here is a link to the company we recommend. They have been in the industry for a long time and have a spotless record with hundreds of happy clients. Recommended Debt Settlement Company.

In summary, a debt settlement program can be your best option if you find yourself falling behind on your bills unable to catch up. A good debt settlement program can get you out of debt in about 2-4 years.

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There is a brand new company just recently launched that provides your FICO score free. Yes, I said free credit scores. What’s the catch?… Well, the only catch is that they display applicable advertising to you when you log in to view your credit score. They will even email you a credit score update every month for free. Signup is completely free, and after signing up, I was pleasantly surprised that I did not receive a ton of marketing emails. In fact, I only received 1 email from them with my account login.

Although they only give you one single FICO score, it is very helpful in monitoring your credit. Especially those that wish to monitor the progress of their credit repair services with NCA Credit Repair.

You can find the link to this new service called Credit Karma on our Additional Credit Resources page.

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