Good Credit vs Bad Credit: This Is What Your Score Should Be

Almost 80% of American workers live paycheck to paycheck. Are you one of them?

If a financial emergency popped up, what would happen? Odds are, you’d need to take out a loan to cover the expense, but could you even qualify for one? This all depends on how good your credit score is. 

Unsure of how your credit score ranks? Keep reading to learn the difference of a good credit vs bad credit score. 

What Is a Credit Score?

You need to understand what a credit score is before you attempt to figure out if yours is good or bad. 

A credit score is a number that ranks your creditworthiness. Your score is determined by the following factors:

• 35% – payment history
• 30% – the amount owed
• 15% – length of credit history
• 10% – mix of different types of credit
• 10% – new credit 

Are you wondering how many credit scores are there? If you see a few different credit scores, don’t panic. There are three main credit bureaus, Equifax, Experian, and TransUnion, and they can all provide different scores. 

What’s Considered Good Credit vs Bad Credit?

What is the best credit score you can get? A perfect credit score is a score of 850, but you don’t need a score that high to be considered worthy of credit. 

Excellent credit is anything above 750 while a good score ranges between 700 and 750. What is considered a fair credit score? Anything between 699 and 670 is a fair score. 

On the other hand, a bad credit score is considered anything below 669. You enter the very bad range when you hit a score below 550. If you have a bad or very bad score, it can be very hard, if not impossible, to receive a loan. 

Ways to Improve Your Score

Does your score fall into the bad credit score range? It’s okay, the number isn’t permanent. There are plenty of things you can do to improve your score over time.

The first thing you can do to improve your score is to review it and look for anything that is inaccurately reported. If you have a lot of inaccurate information or it looks like someone is using your identity, you’ll want the help of a credit repair company.  

From there, you’ll want to concentrate on the factors discussed above that make up your credit score. Make all your payments on time and try to have a mix of credit accounts. Taking out a secured credit card and making on-time payments will help your score. 

Need Help With Your Credit Score?

Now that you know what qualifies as a good credit vs bad credit score, you have a better understanding of how your score ranks. 

Does your score fall into the bad credit range and you don’t want to go through the hassle of waiting for it to improve? At US Allied Financial, we provide credit repair services and do the work for you. 

Get a free credit consultation and say goodbye to your bad credit score. 

Take control of your credit. Get out of debt and increase your credit score!

Call today to get started.

 

Can Disputing Hurt Your Credit? Here’s What You Need to Know

It’s common knowledge that it’s a good idea to occasionally check your credit report – but what do you do if you find something that doesn’t look right?

The first thing you’ll want to do is file a dispute with the credit bureau. But, can disputing hurt your credit score? And what happens when you file credit disputes?

Here’s everything you need to know.

Types of Credit Report Disputes

There are many different issues you might come across that would warrant a dispute. For example, there could be an error in the spelling of your name, your phone number, or your address. This type of clerical error won’t have any effect on your credit score even after it’s fixed.

The next type of error occurs when your report contains accounts that aren’t yours. This could occur when someone’s account ends up on your report erroneously due to them having the same or a very similar name. Accounts could also have been attributed to your credit report due to identity theft. 

You may also find that an account you’ve closed still shows as being open. An account that went to collections and was resolved may still show as being unpaid or the same account could be incorrectly listed more than once.

Other issues include incorrect account balances, inaccurate credit limits, and more. Thanks to the Fair Credit Reporting Act, credit bureaus must investigate any disputes that customers make about the validity of their credit reports.

Likely Outcomes

It’s also required under law that the bureaus investigate complaints within a “reasonable time frame,” generally within 30 days. At the end of the investigation, you’ll receive one of four outcomes.

They may declare the item found on your report “verified,” which means that it’s valid and will remain on your report. Generally, this will leave your report unchanged.

The item in question may also be “modified,” meaning that the bureau has revised certain aspects or your report. A third option is that the credit agency will delete the item, removing it completely from your file.

Lastly, the bureau may decide that your complaint has been “deemed frivolous,” and they will refuse to investigate the situation any further.

No matter what, you cannot be penalized for disputing any item on your credit report. Not only is it perfectly acceptable to review your report regularly and fix any mistakes, but it’s also highly recommended that you do it at least once a year.

So… Can Disputing Hurt Your Credit Score?

Now that we’ve reviewed types of credit report errors and possible outcomes, it’s time to look at the real question – will disputing something on your credit report hurt your score? The answer is no – filing the dispute itself will not have any impact on your credit score.

However, the results of the investigation could cause your score to go up or down. The actual impact will depend on what you disputed and the bureau’s findings. For example, if you found a late payment on your report that never happened and it is eventually removed, then your score will likely go up.

If you find an open account that was actually closed and it’s fixed, this could decrease your score if it results in a higher debt utilization. Regardless, however, it’s best that you dispute any inaccuracies to avoid them becoming a problem in the future.

It’s also important to note that since the bureau does have about 30 days to complete their investigation, these changes rarely happen overnight. If you’re planning something big – like buying a home, then you’ll want to check your report well in advance so you can get a jump on any inaccuracies you might discover.

Disputing a Charge from Your Creditor

Another, possibly more common, issue arises when you notice an incorrect charge from a creditor. You can dispute these in the same way, but the difference is that you’ll file the dispute directly with the credit provider, rather than with the reporting agency.

For example, if you notice a $200 charge on your credit card statement and you didn’t make the purchase, you’ll reach out to directly your credit card company to dispute the charge. The company will then reach out to the business that submitted the charge for verification.

While most credit bureaus don’t make any notes on your report while they’re investigating a dispute your credit card agency will typically note on our account that the charge has been disputed and is under investigation.

The credit card company is also required to let the credit reporting agencies know that a charge that’s been reported has been disputed. The creditor will usually complete the investigation within 30 to 45 days and inform you of their decision about 5 days after that. If they don’t hear back from the company that submitted the charge within that time period, they’ll usually take your word for it and remove the charge.

If the creditor finds that your dispute is valid, they’re required to provide updated information to the credit bureau right away, which will fix your credit report.

Get Help with Your Credit Report Today

Now that you know the answer to the question, “Can disputing hurt your credit score?” you understand just how important it is to review your credit report thoroughly and ensure it’s accurate.

Need some help getting your credit back under control? Contact us today to claim your free credit report consultation.

Take control of your credit. Get out of debt and increase your credit score!

Call today to get started.

 

5 Credit Score Hacks That Can Raise You to a Perfect Score

Unless your credit score is perfect, chances are you’d like to see it improve. Whether your credit score is good, mediocre, or bad, there’s room for improvement.

However, many people have no idea how to work towards a better credit score and most don’t realize there are simple things that they can do to help it get better.

There are many credit score hacks that you can apply to help improve your credit score. By applying several of them over time, you will be amazed by the increase you will soon see.

Read on to learn some credit score tips and tricks that will reward you with a better credit score in no time. It’s easier than you might think.

What Is a Credit Score, Anyway?

You have surely heard about credit scores and you may have even looked up your own. However, you may not fully understand what a credit score is or how one is calculated, and you might not know how good or bad your number actually is.

A credit score is a number that ranges from 300 to 850. Although it’s just a number, it depicts your creditworthiness based on your past credit history.

This number tells lenders how likely you are to repay loans in an efficient and timely manner. Then, based on that number, they can decide whether or not they want to lend you money or issue you a credit card.

A number of factors go into the calculation of credit scores. The number of open accounts you have, the amount of debt you currently carry, and the overall repayment history of your debts all play a part.

The better your credit score, the better chance you have of getting loans, of being issued new credit cards, and of getting a reasonable interest rate on the money you borrow or on financing for big purchases like buying a new car or a home.

The primary scoring system is FICO. This system is universal and is based on the credit score model created by the Fair Isaac Corporation in 1956. There are other methods of determining credit scores, but FICO is the most commonly used nationwide. 

What Is a Good Credit Score?

A credit score of 700 or above is considered good, and a score above 800 is ranked as excellent. According to FICO, the average credit score for Americans in 2019 was 706 – an all-time high for this measurement. 

However, there are many people out there who possess credit scores that are far below average. If yours is well below 700, you are not alone. Nearly a third of Americans have a fair or poor credit score. 

Fortunately, credit scores are fluid numbers. Just because you have a poor credit score right now does not mean you are stuck with one for life.

Credit Score Hacks to Try

There are so many different credit score hacks that you can use to improve your credit score. If you try just one or two of these, you will see some increase; if you put them all into practice, your score will improve by leaps and bounds. 

1. Pay On Time

One reason your credit score may be low to begin with is that you have missed payments or have paid your bills late. Even a few missed or late payments can have a negative effect on your score. One of the easiest ways to improve your credit is to avoid doing this ever again.

Not long ago, to pay a credit card bill, we had to write a check and send it in. As a result, many payments were late or were forgotten altogether. It’s much easier to pay on time these days; you can set up automatic bill pay so at least the minimum is paid on or before your due date through a transfer from your bank.

2. Pay Down Your Balances

If your credit cards are maxed out, or if you are using the majority of your available credit, your credit score will suffer. In fact, many experts say that if you are using more than 30% of your available credit, you’re using too much. People with the highest credit scores use under 10% of their available credit.

By paying down your balances, you will show lenders that you are responsible, and your credit score will improve in turn.

This is easier said than done, but you can do it. Instead of paying your credit card bills once a month, consider making weekly payments until your total credit is at a manageable amount.

3. Request an Increase to Your Credit Limit

If you call your lenders and ask for an increase in your credit limit, they will likely grant it. They think you will spend more money – but do the opposite. This is another way to lower your credit-to-debt ratio, which will improve your credit score.

However, you must be strong; just because you now have more credit, don’t be tempted to use it. That will get you in more hot water.

4. Don’t Close Out Old Credit Cards

You may have a lot of credit cards, and in trying to improve your credit score, it may be tempting to close out some of them. This might not be a good idea, though; if you have had some of them for a long time and have paid them down to zero, it demonstrates that you have a history of being responsible with debt. This will contribute to a better credit score down the road.

5. Just Wait

Everyone would love to see an improvement in their credit score overnight, but it doesn’t work that way. If you stick to the above tips and give it some time, you will have a better credit score in time. Be patient and stay the course, and positive results will soon follow.

More Help Is Available If You Need It

If you have tried all of the above credit score hacks and it seems that your bad credit score just won’t budge, you may need to reach out for professional help.

US Allied Financial offers credit repair assistance and works to help people achieve better credit scores every day. We would love to help you, too. Give us a call today. We look forward to hearing from you soon.

Take control of your credit. Get out of debt and increase your credit score!

Call today to get started.

 

How Much Does A Loan Affect Your Credit Score: A Simple Guide

 

Do Loans Affect Your Credit Score?

Loans are available to help you buy your dream house, drive your dream car, attend the school of your dreams and a myriad of other things you may not be able to afford on your own. How you manage your loans is critical to your financial health. How much does a loan affect your credit score? Let’s find out:

 

How Loans Can Negatively Affect Credit:

According to TheBalance.com, “How much debt you have, including the loans you take out, determines 30% of your credit score. How reliable you are at paying off that debt, known as your payment history, makes up 35% of your credit score.”

Hard Inquiry:

When you’re seeking a loan for a car or home and a lender requests to view your credit report from the three main bureaus, that’s considered a hard inquiry or hard pull. The reason they’re inquiring is to ensure you have a history of paying back loans and paying your credit card bills on time. 

According to FICO, a hard inquiry from a lender will decrease your credit score an average of 5-10 points. Depending on the type of loans you need, it could mean too many hard inquiries.

Loan Applications & Pre-Qualifying:

The first step of any home or car buying loan process is filling out an application and getting prequalified. While this is viewed as a soft pull and will not affect your credit score, the next step will. 

Prequalification comes after pre-approval, which does result in a hard inquiry, therefore impacts your credit score. Since people usually look at multiple lenders, it’s not odd to have multiple pulls in a short period of time. At the pre-approval stage, it’s important to complete all your applications within a short period of time, 14 days, as each inquiry will only be looked at as one. 

Debt-to-Income Ratio:

In addition to your credit score, your debt-to-income (DTI) ratio is an important part of your overall financial health. Your DTI compares the total amount you owe every month to the total amount you earn. While it doesn’t directly affect your credit score, it’s a piece of the financial puzzle. If you’re not paying off your loans, not only will your credit score suffer, but that balance will catch up with you. Most lenders will look at your DTI, along with your credit score and credit report when they’re deciding whether or not to offer you a loan. 

 

How Loans Can Positively Affect Credit:

Owing money isn’t always a bad thing and if managed properly, it can actually help your credit score. 

Payments Made on Time:

When you make loan payments on time, it’s a simple and great way to build your credit. In fact, according to FICO, “payment history makes up 35% of your score and is a major factor in its calculation.”

When a lender sees you’re financially responsible and have paid back what you have owed on time, it gives them peace of mind that you will pay back their loan on time.

Credit Mix:

All of the accounts that make up your credit report is called your credit mix, which determines 10% of your FICO score. While a healthy credit mix can slightly help your credit score, you shouldn’t sign up for various credit cards and loans just to increase it. Concentrate on paying the loans and credit cards that currently make up your credit mix to increase your credit score.

Credit History:

Building credit takes time but can be simple, if you stick to a plan. Any time you borrow money, pay it back on time. There are several ways to utilize your loan to build a healthier credit history.

• Becoming an authorized user on someone else’s account can help you build credit, even if you don’t spend a penny. If you trust someone, like a spouse, family member or friend that is responsible with payments, you can take advantage of this. However, if they fail to pay, it will negatively impact your credit score. 
• One of the easiest loans to qualify for is a loan that you’ve already paid off. Getting a secured credit card with a cash-secured loan is ideal for those with lower credit scores. If for some reason you don’t pay your monthly bill, your cash deposit is used as a backup and your credit score will still reflect it as paid. 

What About Personal Loans?

A personal loan is different from a loan for a car or home since it can be used for anything you need it for. Typically, personal loans have lower interest rates than credit cards, so people use them to pay off their credit card debt. 

Positives:

While you will still owe money on your personal loan, your credit cards are being paid off and that will increase your credit score. 

Negatives:

You must pay your personal loan off on time because this type of loan has a higher interest rate than home or car loans, due to the fact they don’t require any collateral. 

_____________________________________________

A high credit score will open the doors for more financial opportunities but while you’re waiting for those doors to open, you can make your dreams a reality by taking out a loan and being smart about paying it back. Remember, how much your loans affect your credit score, both the good and the bad is up to you. 

If you have questions about your credit score, talk to a professional.

 

Take control of your credit. Get out of debt and increase your credit score!

Call today to get started.

 

Credit Report Inquiries And How They Impact Your Credit Score

 

It’s always a smart idea to check your credit report frequently to ensure all the information is correct. Knowing how credit report inquiries impact your credit report is important for financial success. 

Check your Credit:

The first step in this process is to check your credit score and view your credit reports. If your score is lower than you thought and the reports show erroneous information, such as a misspelled name or an inquiry you don’t recognize, it’s time to take action. 

 

Fixing these mistakes may include dispute letters and complicated online systems, therefore, it’s recommended to work with a professional who is familiar with the process of how to dispute your credit report.

 

Fair Credit Reporting Act:

The Fair Credit Reporting Act (FCRA) is a federal law to ensure the accuracy, fairness, and privacy of your information in the consumer credit bureau files. At your request, credit bureaus will initiate an investigation of any credit information that you challenge. The Fair Credit Reporting Act gives you the right to repair your credit, but it doesn’t do the job for you, hence the need to work with experts.  

 

The Difference Between Hard and Soft Inquiries:

The main difference between hard and soft inquiries on your credit report is who is requesting permission to pull this information from the credit bureaus. Let’s dig in deeper to understand the difference, as well as how credit report inquiries impact your credit report.

Hard Inquiries:

• Occurs when you apply for a new line of credit, i.e. credit card or loan
• Lenders will view your credit history on your credit report to ensure you’ll be a qualified borrower
• Referred to as “hard pull”, your information should never be pulled without your permission
• Cannot be removed unless identity theft is involved
• Will remain on your credit report for about two years
• Only impacts your credit score for less than a year

 

When you’re seeking a new credit card, you’re essentially giving permission for that lender to view your credit history so they can investigate if you’re a good candidate to borrow money from them.

If you’re seeking a loan and there are several inquiries within a 14-45 day period, you most likely will not get penalized. The bureaus realize you’ll want to compare multiple loan options from various companies.

 

However, if you’re applying for multiple credit cards in one week, the bureaus will take notice. You may be viewed as someone who doesn’t have enough money, therefore is planning on spreading out their spending on multiple credit cards with a low chance of paying them back.  

 

Hard inquiry removals can take a lot of effort and can only be removed when fraud is involved. If someone is attempting to open up credit card accounts or a loan in your name, you’ll want to take action right away. 

 

If you’re wondering how many points does a hard inquiry affect your credit score, the answer varies per person. Based on your payment history, among other factors, typically, the number is lower than five points.

How to Avoid Hard Pulls

• Don’t apply to credit cards you don’t need
• Do your homework and figure out which credit card/s make sense for you before applying
• Conduct your rate shopping for things like an auto loan or mortgage within a short amount of time
• You can freeze your credit reports, cutting off access to new inquiries and avoiding future fraud on existing accounts

Soft Inquiries:

• Occurs when you pull your own credit to check your credit score
• Generally pulled without knowledge or permission aside from your own pull
• Known as “soft pulls”, companies can inquire about your credit history, whether it’s an employer or someone looking to do a background check
• An existing credit card company may want to check up on your report to ensure you’re still a qualified borrower
• Credit card companies may pre-screen you for eligible offers based on specific criteria
• Soft inquiries don’t affect your credit score

 

Even though soft inquiries don’t have any impact on your credit score, you should always be checking in on your report from the bureaus to ensure all the information on there is valid. 

__________________________

 

Before you consider opening up a new credit card or applying for a loan, know that there are consequences to doing so. Credit report inquiries impact your credit report in various ways, especially hard pulls, so make sure it’s absolutely necessary. As always, it’s important to pay your credit card bills and loans ontime to avoid additional damage to your credit score. 

 

If you’re not sure how to evaluate your credit report to ensure all of the inquiries on it should be present or to dispute those that are foreign to you, speak to a professional credit repair company who can quickly help you navigate through the credit report waters. 

 

Take control of your credit. Get out of debt and increase your credit score!

Call today to get started.

 

Get a Mortgage With a Low Credit Score: What You Need to Know

 

Even though your credit history is less than desirable, it doesn’t mean your dreams of owning your own home can’t become a reality. Learn how to get a mortgage with a low credit score and envision yourself shaking hands to seal the deal. 

 

What’s Credit?

A credit score is primarily based on a credit report, information typically sourced from credit bureaus.

What does your credit report include?

• The number of credit card accounts you have, their borrowing limits and current outstanding balances
• The amounts of any loans you’ve taken out and how much of them you’ve paid back
• Whether your monthly payments for your accounts were made on time, late or missed altogether
• More severe financial setbacks such as mortgage foreclosures, car repossessions and bankruptcies

 

What’s Considered Bad Credit?

Based on the FICO ® Score range of 300 to 850, a credit score below 669 is considered to be either fair or bad. 

When you have bad credit, it can be much harder to secure a loan for a house. However, it’s not impossible, and the good news is there are several options available to getting you closer to that handshake. Get educated and learn how to buy a house with bad credit. 

 

Can There be Mistakes in Your Credit History?

It’s not uncommon for there to be mistakes on your credit report. In fact, one in five people has an error on at least one of their three credit reports, as reported by the Federal Trade Commission. 

Take a look at your credit reports and dispute charges. 

• You may discover information about a credit card you never had on one or all three of your credit reports
• You may find a misspelling of your name on the list of alternative names you have gone by
• You may see late payment information for a credit line that was never paid late
• You may see a line of credit still listed as open when you have closed it

It’s recommended to speak to a credit expert to help you navigate through your report and the credit bureaus, when you believe there are errors. Fixing any issues the credit bureaus are reporting can make a huge difference when applying for a mortgage. 

 

What Are Steps for Increasing Your Credit Score?

• The first step is understanding the factors that go into your credit score 
• The second step is hard work and patience

If you pay down your debts, regularly pay your bills on time, and keep the same line of credit open for several years, you’ll see your score go up. 

 

What Are Alternative Options to Traditional Loans?

The reality is when you’re known to the financial world as having bad credit, you don’t have the positive payment history for lenders to trust that you’ll pay them back. Therefore, the worse your credit score, the higher your finance charges will be. 

 

You can get a mortgage with a low credit score and there are several alternative lending companies out there who can make it happen.There are low credit score mortgage lenders and several government-sponsored agencies that can help you secure a home loan when traditional options are not an option due to bad credit. 

FHA Loans

FHA stands for the Federal Housing Administration. The minimum credit score to quality for this type of loan is 500. If you have a limited amount of money to use as a down payment, an FHA loan will work well for you, since you may only be responsible for a 10% down payment. 

VA Loans

The U.S. Department of Veteran Affairs offers loans for active or retired military who may be going through financial struggles. According to their website, 90% of VA-backed loans are made with no down payment.

USDA Loans

USDA loans were created by the United States Department of Agriculture (USDA) to improve the quality of life in American rural communities. These loans don’t require a down payment and have low, fixed interest rates, so very beneficial for someone with low credit. 

Fannie Mae HomeReady Program

This loan program offers financing with as low as 3% down for borrowers with low credit scores due to a limited credit history. 

____________________________________

 

These programs understand people experience financial struggles and make choices that can lead them down a path of debt. Talk to a financial expert to understand your options and discover the best path to get you there. 

 

A great resource to keep handy is the Affordability Calculator, which takes your annual income, your ideal down payment you can afford, any monthly debts to consider, your credit score and your zip code and provides you with the cost of a home you can afford. 

 

It also gives you your DTI, which is your Debt-To-Income, your “minimum monthly debt divided by your gross monthly income. The lower your DTI, the more you can borrow and the more options you’ll have.”

 

• Understand your credit score
• Work on increasing your credit score
• Discover any mistakes on your credit report
• Start getting yourself out of credit card debt
• Take advantage of government programs to get a mortgage with a low credit score

 

Just because you have bad credit, doesn’t mean you’re a bad person. Now that you know how to get a mortgage with a low credit score, you’re on your way to getting the keys to your dream home.

 

Take control of your credit. Get out of debt and increase your credit score!

Call today to get started.

 

Start Driving: How to Apply for a Car Loan in 7 Simple Steps

 

A shocking $1.2 trillion — that’s the total outstanding balances of all auto loans in the US in 2020.

A major reason for this is that new vehicles in the US now cost almost $38,000 on average. Only very few people can afford to shell out that kind of money in one go, so most car buyers rely on auto loans.

As such, if you’re part of the majority, it’s best to familiarize yourself with the steps on how to apply for a car loan. This way, you can boost your chances of getting a “YES!” from an auto loan lender.

Ready to drive home that dream car without straining your finances on an expensive car loan? Then let’s get right into it!

1. Determine Where Your Credit Score Really Stands

If your credit report contains “mistakes”, lenders will consider you high-risk. They may either charge you with higher interest rates or grant you a loan that’s less than what you apply for. Worse, they may not extend credit to you at all.

The thing is, “potentially material errors” on credit reports affect as many as 20% of people in the US. 5% of credit reports even have such serious errors that they affect the person’s ability to get credit!

That’s why the first step on how to apply for an auto loan is to get a copy of your credit report. You can get it for free once a year from any of the three major credit reporting bureaus. You’d only need to give your complete name, address, birth date, and social security info.

Once you have the report, scrutinize it to ensure that everything in it is factual. Even a single mistake that implies you missed a payment on a loan can affect your credit score. This, in turn, can land you in any of the situations we mentioned above.

If you do find inaccurate entries in your report, be sure to dispute these negative items. Only after the reporting bureau has corrected these errors should you apply for an auto loan.

2. Give Your Credit Score a Boost

In the second quarter of 2019, US consumers had an average FICO score of 703. Lenders look at this as a “good” credit score, and anything higher is even better.

The bad news is, the 700 + credit score average applies only to people aged 50 and older. Most people younger than 50 have scores of less than 700. Scores under 670 can either be “fair” or “poor”, either of which can affect your ability to get credit.

If your credit score doesn’t hit the 700 (or even the 670) mark, you may not qualify for an auto loan. Lenders may still extend you credit but in exchange for a much higher interest rate.

So, let’s say that your credit report is accurate and it shows that you have a less-than-stellar score. In this case, it’s best to repair your credit score first before you apply for a car loan. A good starting point is to pay off your credit card debts.

The point is, the fewer debts you have, the more budget you have for car loan payments. As such, lenders may look at you more favorably and respond by giving you a good deal on your car loan.

3. Find Out As Much As You Can About Your Preferred Car

As you’re doing what you can to boost your chances of auto loan approval, do your homework on the car you want to buy. Start by checking the manufacturer’s suggested retail price and its current market value. If you’re thinking of going pre-owned, be sure to use auto appraisal tools to get a grasp of the model’s market value.

This is a key step on how to buy a car as it lets you confirm the model’s affordability and if it can really fit your budget. It also allows you to determine how much you need to borrow from a car loan lender.

4. Time to Compare Your Auto Loan Options

From national banks to local credit unions, these are some of your options when it comes to car loan lenders. All of them, however, charge different interest rates and offer varying loan terms. Even a small 0.5% difference in interest rate can make or break your ability to repay your auto loan.

That said, compare as many car loan offers as you can first to find out which lenders have competitive rates. If you have been a good client of a local bank for years, check if they can finance your car purchase. As a loyal customer, they may grant you a low-interest auto loan.

5. Obtain Pre-Approvals

Once you have a list of potential lenders, you can now apply for loan pre-approval. Pre-approvals are different from “pre-qualifications”. Pre-approvals require “hard” credit checks, while the latter only requires “soft” credit checks.

Now, a soft credit check sounds safer, doesn’t it? Yes, but it will only give you an estimate of the rates you may expect. Meaning, the quoted rate isn’t guaranteed, so you’re still at risk of rate markups.

Whereas pre-approvals give you more specific figures of the rates you may expect. If you meet the rest of the requirements, your interest rate will be as close as possible to the pre-quoted rate.

6. No Room for Hesitation With Negotiations

Go through your pre-approval options and narrow them down even further. It’s best to have at least three lenders on your list of potential financiers.

From here, you can start negotiating with each lender. If you do have the budget, tell them that you’re willing to put a down payment on the car you want to buy. Doing so means you’re serious about buying and it also means that the lender will shell out less for your loan.

A down payment also works on your behalf as it means you’ll take on a smaller amount of loan. This, in turn, translates to reduced interest payments, making your loan more affordable.

7. Send Your Loan Applications In

At this point, all that’s left for you to do is to complete all the requirements of the loan. From here, it’s all just a waiting game to hear back from the lenders. Although some may get back to you in a few hours, others may need a few days.

Follow These Steps on How to Apply for a Car Loan Now

There you have it, all the must-follow steps on how to apply for a car loan and have better chances of approval. Your credit score is one of the most important factors here, so be sure it’s in good condition. Otherwise, you may end up getting disappointed, or worse, having your score go even lower.

If you find errors in your credit report, know that we can help you start the dispute process. Please don’t hesitate to give us a call now so we can help rectify these reporting mistakes.

 

Take control of your credit. Get out of debt and increase your credit score!

Call today to get started.

 

What Is Credit Restoration and How Does It Work?

 

Your credit score is more important than you may even realize. If you have problems with your credit, you’ll find it difficult or impossible to get a loan, but that’s not the only issue. You’ll likely run into many other problems like issues with renting an apartment, getting auto insurance, taking out a cell phone plan, or even being hired! 

Luckily, if you’ve had issues with your credit in the past, all is not lost. One popular option for turning things around is credit restoration.

What is credit restoration? And how does credit restoration work? Keep reading to learn more!

Credit Restoration 101

First things first – what is credit restoration? It’s simply a set of strategies that you can implement to help raise your credit score. In general, it involves verifying the information on your credit report and disputing any inaccuracies. It also involves taking steps to negate derogatory information included in your reports, like late or missed payments and defaults.

It’s important to note that credit restoration is not the same as credit counseling or debt settlement. Credit restoration doesn’t involve negotiating with your creditors to pay down your debts. Rather, it’s focused on bringing up your credit score.

The 4 Most Effective Credit Restoration Strategies

Taking the right actions, at the right time, is the key to restoring your credit. Here are a few of the most effective strategies.

1. Removing Credit Report Errors

The number one thing to do is to make sure that your credit report is accurate. If there’s any fraudulent activity that shows up – like accounts you never opened – then this can obviously have a negative impact on your credit score.

You can check your own reports and work directly with the credit reporting agencies to resolve this. However, you may have more luck working with a company that provides professional credit restoration services.

These companies are well-versed in exactly what needs to happen to remove inaccurate information from your reports and may be able to get you better results. If nothing else, outsourcing this important task can save you a lot of time and effort.

Just be careful when you’re choosing the company you’ll work with. There are a lot of credit repair scams out there, so do your research and make sure the company you’re considering using is reputable.

2. Making On-Time Payments

Your credit score is meant to be an indication of how risky it is for a lender to give you money. Lenders want to know that you’re going to pay them back when you’re supposed to and that you’re not going to default on your loan.

This is one of the reasons why on-time payments play a major role in determining your credit score. Making late payments is a HUGE deal!

Although you can’t change the past, the one thing you can do is make sure that you always make at least the minimum payment before the due date from this moment forward. One easy way to do this is to set up automatic payments (just make sure you have enough money in the bank to cover them!).

Start making your payments on time right now and you’ll begin seeing your score inch up after a couple of months.

3. Lowering Your Credit Utilization

Another factor that impacts your credit score is your “credit utilization.” This is basically the amount you currently owe compared to how much total credit you have. A low ratio, meaning you have much more credit available than you’re using, is better for your score.

If accounts with outstanding balances are listed on your report that don’t belong to you, this will obviously increase your utilization ratio. This is one of the reasons why fixing your report is always a critical first step.

Beyond that, it’s a good idea to start paying down your balances as much as you can. Consider picking up a side gig or selling some stuff you no longer need and using that money to make some larger payments towards the debt you owe. The quicker you can bring this down, the faster your credit report will climb.

4. Ongoing Monitoring  

When you’re working hard to raise your credit score, it’s important that you keep an eye on it. This will help you see what’s working and give you the chance to quickly make changes if your score starts going in the wrong direction.

It’s a good idea to sign up for credit alerts so you’re immediately aware when things happen that will impact your score. You may also consider identity protection monitoring, particularly if you’ve already had fraudulent information end up on your credit report.

At U.S. Allied Financial, we provide all of these services as well as a monthly credit score analysis that will help you see exactly what is and isn’t working so you can make positive changes as quickly as possible.

Need credit counseling? We can take care of that for you too!

Start Repairing Your Credit Today!

Credit restoration can completely change your life – and, the best part is, you don’t have to do it alone! Get in touch with us today to learn more about the services we offer and how they can help you turn your financial life back around.  

Get started with your free credit consultation today!

 

Take control of your credit. Get out of debt and increase your credit score!

Call today to get started.

 

How To Quickly Lower Interest Rates

If interest rates and credit card debt are raining down on you, it’s time to make a change. With a little knowledge and confidence, you can quickly lower interest rates and won’t need to the stress of caring around that umbrella anymore.

What Is an Interest Rate:

Interest is how much someone charges you to borrow their money. With credit cards, if you pay your balance in full every month, there is no interest accrued. If you don’t, you need to pay an additional fee on top of what is owed, known as interest.

 

Different credit card companies have different interest rates and you need to put in some time to understand what a good credit card interest rate is for you. 

What Is APR:

The interest rate on your credit card is expressed as an APR, which stands for Annual Percentage Rate. The rate you are given is based on your credit score, which is a summary of your credit history. 

 

If you pay your credit card bills in full every month, you’ll never have to worry about paying APR. 

What Is Credit Card Utilization:

Credit card utilization is the percentage of credit limit you’re using every month. If your balances are paid in full every month, you won’t accrue any interest charges and your credit utilization rate will be low. It’s recommended keeping your utilization score under 30%.

How Does It All Work:

Every month, your credit card company decides what an acceptable minimum payment is to remain in good standing with them. Keep in mind his minimum payment comes with a penalty, which is the interest you are being charged in addition to what you’ve spent on that card. While it won’t affect your credit score, minimum payments will extend your debt and cost you more in the long run.

If you decide not to pay your bill at all, it will impact your credit score and you’ll accrue late fees. Skipping a bill is never a good option. 

Evaluate Your Current Situation:

When you sit down and review all your credit card statements, it can be overwhelming. Luckily, there are methods to quickly lowering your interest rates.  

• Educating yourself and doing some research should be your first step to financial freedom
• Looking at your card statements to find out what percentage of interest you’re currently paying is important knowledge
• Researching to see what competitors are offering will be a great tool for you 

 

The knowledge you’ve gained from investigating your situation will come in very handy while negotiating with your credit card company. It’s very possible to lower your rates with a simple conversation, but you need to come prepared.

Switch Your Method of Payment:

If you’re discovering you’re spending more than you can afford, especially month after month, swapping out your credit card for a debit card is a smart move. This means the money you spend comes right out of your checking account instead of you having to borrow it. 

 

Cash is also a good option since you can’t purchase an item that costs $100 if you only have $75 in your pocket. 

 

When figuring out how to lower interest rates, changing up your method of payment is an easy solution.

Build Your Credit:

Having good credit unlocks many doors, so if yours is not very impressive, it’s time to repair your bad credit. Organically, this takes time, however, if there are any mistakes on your report, you can partner with a professional to quickly remove them.

 

A good tip is to either start paying off your smaller balances or to try and make one large payment on a higher debt. Obviously paying your bills on time is a very simple way to improve your credit score. 

Remember, the best interest rates are reserved for those with good credit, so use that as a motivator. 

Reach out to Credit Card Companies:

Once you feel you’ve done your homework and tried to raise your credit score on your own, it’s time to ask for a lower interest rate.

 

• Ensure to have everything you need in front of you to make your case, as everything needs to be based on fact
• If you hear, “No”, ask to speak to a manager and don’t get discouraged right away 
• Bring a good attitude with you as it will go a long way
• Mention deals from competitors as they may not want to lose your business

 

After you’ve exhausted all your options with your current credit card company, and they’re unwilling to lower your rates, it could be time to move on. 

 

Here’s a great site to help you find the best credit cards based on your specific needs. There are a ton out there and many have no balance transfer offers. 

Taking these steps will lower your interest rates and open up many doors. It will feel great knowing you worked hard to create better financial health for yourself.

 

We can help you fix your credit today!

Call today to get started.

 

Quickest Ways to Pay off Credit Card Debt

Credit card debt is no joke, as it can impact future loans for large purchases, such as a car and a house. If you find yourself receiving multiple letters and calls from the credit card companies or even collectors because you owe money that you borrowed, it’s time to figure out the quickest way to pay off your credit card debt. Take control of your finances and start putting the pieces of your financial future back together.  

What Is a Credit Score?

A credit score is primarily based on a credit report which is information typically sourced from credit bureaus. Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. In other words, if you are known to make late credit card payments or not at all, no one is going to trust that you will pay for future cards or loans.

Based on the FICO ® Score range of 300 to 850, a credit score below 669 is considered to be either fair or bad. If you’re tired of getting denied, tired of collection agencies calling you, it’s time to raise your credit score. Paying off your credit card debt will get you on the path for financial success.

Know What You Owe

The first step to digging yourself out of debts you owe is to gain a comprehensive understanding of what you actually owe. This may take some investigating, calls to the credit card companies, a look at your credit report and more, so patience is a must. 

The whole process can be very overwhelming but all your hard work will pay off. When you compile all of your information, it’s important not to panic. While the number may look very high and be quite surprising, there are easy ways to get through the process and professionals that can help guide you.

Ensure Your Credit Report Is Correct

It’s not uncommon for there to be questionable information on your credit report. You may discover someone made a mistake, whether it was the credit card company or the credit bureaus. 

It’s imperative to have this wrong information taken off your report. While you can do this on your own, it is recommended to turn to a professional and reputable credit repair company who has the experience, the relationships and the knowledge to get the job done.

Remember This Is Not a Permanent Situation

With assistance from the experts and a commitment to paying off your credit card debt, there will be an end in site. Whether your lack of payments have scarred your credit report or there was an error, doing something about it is the first step in changing your habits.

Take pride in the fact you’re doing the right thing by paying off your credit card debt. As humans, perfection doesn’t exist. We can only learn from our past mistakes to make changes for a better future.

It’s Time To Get Educated

Leaving a balance on your credit cards, which most people think will be beneficial, will actually damage your credit score.

Experian, one of the top three credit reporting agencies tells us that, “You should never carry a balance of more than 30 percent of your credit limit on any one card or in total. The lower your balances, the better it will be for your credit scores.”

If you can’t make the monthly minimum payments, have multiple credit cards that are overdue and seem to be over your head, there are two effective strategies for paying off debt. 

Debt Avalanche vs. Debt Snowball:

The debt avalanche method is a repayment plan where you make the minimum payments on all your debt, while the remaining money goes to the debt with the highest interest rate. The idea is to eventually work your way down.

The advantage of the debt avalanche method is that it lowers the amount of interest you pay over time since you are targeting the highest interest paying debt. This also allows you to pay off your debt quicker.

With the debt snowball method, you pay off your bills from smallest to largest, regardless of the interest. When the smallest debt is paid in full, you roll the money you were paying on that debt into the next balance, working your way up.

The advantage of the debt snowball is that it helps build motivation for debt repayment and you can see your progress quickly.

If you stick with a plan that’s right for you, you can pay off debt fast. You’re the only one in charge of your finances so taking control will empower you in all aspects of your life. Now that you have all the pieces to your financial puzzle, you can put them together and get back on track quickly. 

 

 

We can help you fix your credit today!

Call today to get started.