Major Credit Woe

Major Credit Woe

According to Forbes magazine 7 out of 10 young adults made major credit mistakes before age 30. Sadly to say I was among this statistic. But how much does young adults really know about protecting and guarding their credit. If financial and credit management was a part of high school curriculum it could possibly reduce a friction of the credit mistake young adults make. Thinking back I don't recall discussing credit but I do remember applying for my first credit card at Macy’s at age 18. These common mistakes affect many young adults years later by either remaining on their credit report unknowingly or resulting in a high interest rate on other credit obtained later in life. 

Connect with Santasia:

Website: www.creditdonesimple.com
Twitter Handle: @mscandihill
Instagram Handle: @i_am_candihill
Facebook Handle: Santasia "Candi" Hill
Linked In: Santasia L. Hill

Collections & Charge-Offs

Collections & Charge-Offs

When it comes to charge-offs and collections both can really impact and harm your credit score. Having numerous of credit cards, high balances, and late payments affects your score negativity as well. When an account reaches the point that creditors turn your account over to a collection ion agency it has already caused your credit harm. Collection agencies are hired by creditors to collect on accounts. Most creditors turn accounts over to collection agencies when the account reaches 90-180 days past due. Collection agencies will try to collect as close to 100% of the amount owed as possible, because a percentage of the amount collected goes to the collection agency. By the account reaching a collection status it can be displayed on your credit report twice, once by the creditor and once by the collection agency. This can cause your score to drop by nearly 75 points. That's a huge drop on a credit standpoint.

If creditors determine your account is uncollectible the process of a charge off takes places and the account is closed, sold or transferred. This means the creditor will “write off” this account. However, if you ever plan to get any other credit it will be hard based off another creditor has classified you as unworthy of maintaining credit. But there are other creditors that will extend credit to you with a collection and/or charge off but the interest rate will be outrageously high. Please be smart about your credit because if you are not the cycle could repeat itself in another round of collections and another charge off. 

Santasia H~

Connect with Santasia:

Website: www.creditdonesimple.com
Twitter Handle: @mscandihill
Instagram Handle: @i_am_candihill
Facebook Handle: Santasia "Candi" Hill
Linked In: Santasia L. Hill

How credit is calculated

“How your credit score is calculated”

The most used credit scoring company is the Fair Isaac Corporation “FICO”. Over 80% of creditors use FICO scoring. Below is the breakdown and factors of what makes up your FICO score. Credit is based off several different factors however payment history makes up 35% which is why it's very important your accounts are “paid as agreed” or “paid on time”. By making only one payment late can negatively affect your credit score. A good FICO score is 750+ on a scale 300 to 850.

How credit scores are calculated

Payment History:
Accounts paid as agreed
Number of past due items
Current negative marks
Amounts owed

Secured vs unsecured 

Number of accounts with balances:
Balance to credit
Balance to loan amount

Length of credit:
Time since account opened
Time since account activity 

New Credit:
Recent credit inquires
# of inquires
Recent opened accounts
Time of recent opening

Types of credit:
Mortgage
Installment loans
Retail cards
Credit cards

Santasia H.~

Connect with Santasia:

Website: www.creditdonesimple.com
Twitter Handle: @mscandihill
Instagram Handle: @i_am_candihill
Facebook Handle: Santasia "Candi" Hill
Linked In: Santasia L. Hill

Do you know the difference between a soft inquiry and a hard inquiry?

Do you know the difference between a soft inquiry and a hard inquiry?

Soft inquiry sometimes known as soft pull, is an inquiry into your credit history that does not affect the credit score. Most times, you are not aware when a soft inquiry has taken place on your credit report. For example, the mail offerings you receive from credit card companies, loan companies, and car dealers it's likely the company has conducted a soft inquire to see if you qualify for services as well as when mortgage companies pre-approve you for a loan. Employers even sometimes use soft inquiries as a part of background check, banks verify you are who you say you are before opening your accounts by soft inquiries. Checking your own credit report, which you should do once a year is free and done as a soft inquiry. Checking your credit file, at least once a year is important for your financial future.

A hard inquiry on a credit report is different from a soft inquiry. Hard inquires does affect your credit score. Whenever you are applying to getting a new credit card or loan that company conducts a hard inquire on your credit report these hard inquires does lower your credit score by 5 points for about 6 months that stays on the your credit report for 2 years. It's very important you guard your credit from obtaining too many hard inquiries. Companies will offer 10-20% off your purchase for opening an account, it's not worth the hit of 5 points it can make on your credit report especially if you are trying to build credit or if you are in the market to make a big purchase like a home or car. Be smart about your credit.

Santasia H~

Connect with Santasia:

Website: www.creditdonesimple.com
Twitter Handle: @mscandihill
Instagram Handle: @i_am_candihill
Facebook Handle: Santasia "Candi" Hill
Linked In: Santasia L. Hill

Fraud Alerts Are Great

Fraud Alerts Are Great

Placing a fraud alert on your credit report cuts down on identity theft and alerts you when your credit is pulled. A fraud alert is free. You must provide proof of your identity. Contact Equifax, Experian, and Transunion. The company you call must tell the other companies about your alert. When an alert is on your file it's harder for you to fall a victim of identity thief. This alert requires business to verify your identity before any credit is issued in your name. Businesses will contact you possibly by phone; be sure your contact information is correct when setting up your alert. The initial alert will remain on your credit file for 90 days. You will have to renew the fraud alert after 90 days.

Connect with Santasia:

Website: www.creditdonesimple.com
Twitter Handle: @mscandihill
Instagram Handle: @I_am_candihill
Facebook Handle: Santasia "Candi" Hill
Linked In: Santasia L. Hill

Dispute Sample Letter

Dispute Sample Letter

[Your Name]
[Your Address]
[Your City, State, Zip Code]

[Date]

Complaint Department
[Company Name]
[Street Address]
[City, State, Zip Code]

Dear Sir or Madam:

I am writing to dispute the following information in my file. I have circled the items I dispute on the attached copy of the report I received.

This item [identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.] is [inaccurate or incomplete] because [describe what is inaccurate or incomplete and why]. I am requesting that the item be removed [or request another specific change] to correct the information.

Enclosed are copies of [use this sentence if applicable and describe any enclosed documentation, such as payment records and court documents] supporting my position. Please reinvestigate this [these] matter[s] and [delete or correct] the disputed item[s] as soon as possible.

Sincerely, 
Your name

Enclosures: [List what you are enclosing.]

Connect with Santasia:

Website: www.creditdonesimple.com
Twitter Handle: @mscandihill
Instagram Handle: @I_am_candihill
Facebook Handle: Santasia "Candi" Hill
Linked In: Santasia L. Hill

Know Your Rights

Know Your Rights

Know your credit rights...how many of us actually read that information that comes along with your credit file. It's important information that can make a difference. Listed below are a few of those important facts.

You must be told if information in your file has been used against you. If you are denied for credit, insurance, or employment – you must be give the name, address, and phone number of the agency that provided the information. 

You have the right to know what is in your file. You may request and obtain all the information about you in the files of a consumer reporting agency. (Identification may be required) 

You have the right to ask for a credit score. (Cost varies depending on credit agency)

You have the right to dispute incomplete or inaccurate information. Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information. Inaccurate, incomplete or unverifiable information must be removed or corrected, usually within 30 days. However, a consumer reporting agency may continue to report information it has verified as accurate.
Consumer reporting agencies may not report outdated negative information. In most cases, a consumer reporting agency may not report negative information that is more than seven years old, or bankruptcies that are more than 10 years old.

Access to your file is limited. A consumer reporting agency may provide information about you only to people with a valid need -- usually to consider an application with a creditor, insurer, employer, or landlords. You must give your consent for reports to be provided to employers. A consumer reporting agency may not give out information about you to your employer, or a potential employer, without your written consent given to the employer.

You may limit “prescreened” offers of credit and insurance you get based on information in your credit report.

You may seek damages from violators. If a consumer reporting agency, or, in some cases, a user of consumer reports or a furnisher of information to a consumer reporting agency violates the FCRA, you may be able to sue in state or federal court.

Identity theft victims and active duty military personnel have additional rights.

Connect with Santasia:

Website: www.creditdonesimple.com
Twitter Handle: @mscandihill
Instagram Handle: @I_am_candihill
Facebook Handle: Santasia "Candi" Hill
Linked In: Santasia L. Hill

January is National Financial Wellness Month

January is National Financial Wellness Month

Start your year off on the right foot…It is National Financial Wellness Month and the perfect time for a fresh start. Breaking old financial routines and creating innovative routines that will allow you to make better financial decisions. Get to know your credit on a deeper level. January is a great time to get your finances in order by following these simple steps.

1. Request your FREE credit report(s) from www.annualcreditreport.com. Be sure to request your credit file from each credit bureau (Equifax, Experian, and Transunion).
Each credit bureau could report different information. 
2. Review your credit report thoroughly
3. Dispute any inaccuracies

Connect with Santasia:

Website: www.creditdonesimple.com
Twitter Handle: @mscandihill
Instagram Handle: @I_am_candihill
Facebook Handle: Santasia "Candi" Hill
Linked In: Santasia L. Hill