Frequently Asked Questions
1. Can I just repair my own credit instead of using your company?
2. Is credit repair legal?
3. Do you guarantee that my credit score will improve?
4. How long will the process take?
5. What does my credit score mean?
6. How does a low credit score affect my interest rate?
7. How does the underwriter view my score?
1. Can I just repair my own credit instead of using your company?
Depending on your time, patience and your perseverance, as well as the complexity of your inaccurate credit report items, you can dispute them on your own. We compare it to representing yourself in a court of law. You can do it, but it would not be the most effective way. We know how credit agencies work. We have done extensive research of consumer credit laws and credit bureau tactics that give us effective results for our clients.
Absolutely! It is your legal right to dispute items on your credit report. We exercise your legal rights pursuant to the Fair Credit Reporting Act, the Fair Credit Act, Truth in Lending Act, and Fair Debt Collection Practices Act, as well as other applicable Federal statutes. We do not participate in any illegal or unethical practices.
3. Do you guarantee that my credit score will improve?
Although we cannot guarantee your credit score will improve, we are confident in our customer service and our ability to negotiate on your behalf with the credit agencies. In almost every case, negative items are removed from our clients’ credit reports, and credit scores are increased by 50 to 100 points.
4. How long will the process take?
Most of our clients see positive results within 11 weeks.
5. What does my credit score mean?
Credit scores are comprised of five factors. Points are awarded for each component, and a high score is most favorable. The factors are listed below in order of importance.
a. Payment History- 35% Impact
Paying debt on time and in full has the greatest positive impact on your credit score. Late payments, judgments and charge-offs all have a negative impact. Missing a high payment will have a more severe impact than missing a low payment, and delinquencies that have occurred in the last two years carry more weight than older items.
b. Outstanding credit balances- 30% Impact
This factor marks the ration between the outstanding balance and available credit. Ideally, the consumer should make an effort to deep balances as close to zero as possible, and at least 10% below the available credit limits. (A balance 30% below the available credit limit is better.)
c. Credit History- 15% Impact
This portion of the credit score indicates the length of time since a particular credit line was established. A seasoned borrower will always be stronger in this area.
d. Type of Credit- 10% Impact
A mix of auto loans, credit cards and mortgages is more positive than a concentration of debt from credit cards only.
e. Inquiries- 10% Impact
This percentage of the credit score quantifies the number of inquiries made on a consumer’s credit within a six-month period. Each hard inquiry can cost from two to 25 points on a credit score, but the maximum number of inquiries that will reduce the score is ten. In other words, 11 or more inquiries within a six-month period will have no further impact on the borrower’s credit score. Note that if you run a credit report on yourself, it will have no affect on your score.
The credit score is a computerized calculation. Personal factors are not taken into consideration when a credit report is generated. It is merely a snapshot of today’s credit profile for any given borrower, and it can fluctuate dramatically within the course of a week.
There are three main credit bureaus: Experian, Equifax, and Trans Union. With a tri-merge credit report, a report contains a score from all three major bureaus, most lenders look at the mid score.
| Experian | 731 |
| Equifax | 647 |
| Trans Union | 719 |
In this case, 719 would be the mid score.
These scores represent a combination of the borrower’s credit history, employment, ability to save, and so forth. The higher your score, the better chance you have of receiving credit with a lower interest rate.
6. How does a low credit score affect my interest rate?
Lenders estimate your ability to pay back money based on your credit score. The risk factor they take on is built in to your interest rate as a financing fee. Therefore, a low credit score results in a higher interest rate, higher monthly fees, and a higher amount of interest being paid over the total life of the loan.
The following chart illustrates the difference in the amount of interest paid over the life of the same loan with three different score scenarios.
30-Year Fixed Rate with Principal Loan Amount of $250,000
FICO Score |
APR |
Monthly Payment |
Interest Paid |
Above 720 |
5.71% |
$1,453 |
$272,928 |
620 to 719 |
5.796% to 7.84% |
$1,446 to $1,807 |
$277,845 to $400,381 |
Below 620 |
8.452% to 9.234% |
$1,914 to $2,054 |
$438,957 to $489,365 |
500 and Below |
No Federal Funding |
|
|
A borrower in increases his or her credit score from 620 to 720+ can potentially save $601 per month on mortgage payments, $7,214 per year, and approximately $216,432 over the life of the 30-year loan.
When lenders review one’s credit score, it’s reviewed by an underwriter.
7. How does the underwriter view my score?
If you are considering a home purchase, it is in your best interest to make every effort to increase your credit score; especially if you know you have issues you should dealing with. It is often the case that people are not aware of bad marks on their credit record until they apply for financing for a major purchase, such as a home.
The underwriter who is making the decision as to whether or not you should get the loan you are asking for will generally look at the scores generated from all three credit reporting agencies. Typically, the score will not be the same from all three reports, and the underwriter will consider the middle score as a barometer.