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Our credit reports are similar to like a movie. When we are watching a movie and hit pause, it freezes that frame at that exact moments and displays an image. What you see is what you get at that exact moment. Fast forward 20 seconds and the view can be entirely different. Because accounts are constantly changing, we can never truly know what our scores are at any given time. Account balances can change, new inquiries can report, collections can be filed and late payments can post. Credit reporting is not exactly real time which means that if you use a credit card today, the new balance will not be reflected until tomorrow. Thus, no two credit reports are exactly alike. As in a movie - actors can play a good or bad role.  In general, the following script can assist with your acting scores.

FICO credit scores range between 350 and 850. We prefer if you have at least 720 to obtain preferred rates though we can assist you with 500 FICO score with FHA financing. Most lenders require that you have at least 620. If you score is below than that but you have time to improve it, here are some tips you can employ:

  1. 35 percent of your score is from your payment history. If you could only do one thing from this list - on time payment history is the key. Pay all your bills on time. One late payment can negatively affect your credit score. Creditors have to wait 30 days to report a consumer late to the credit bureaus. Never late on any account and no collections.  Also you can not have any current accounts that are marked “was 30 – 60 – 90 day late now current” All accounts need to have 100% perfect payment history. Should you have a late payment, get current as quickly as possible. The longer you pay your bills on time after having late payments, the more potential for your credit scores to improve.   
  2. 30 percent of your score is from credit utilization or how much of your available credit you use. It is calculated by dividing current balance by the credit limit i.e. $500 balance on a credit card that has $1,000 limit = 50% utilization percentage. Thus, if a credit is improperly reporting a credit limit - this can cause a significant decrease to your credit score.

    A standard dispute containing verbiage similar to the following: 

    Please update my account #XXXX to reflect, the actual credit limit, your reporting of this account with my high credit can easily be perceived as fraud and an attempt to diminish my credit rating. This improper reporting has caused me denial for credit and has caused severe financial and emotional distress. I am sure that is not your intention, and appreciate your expeditious response..

  3.  If you are maxed out on your credit cards - paying them down below 30 percent could mean a dramatic increase on your score. We can do a rapid recheck if you are on a strict timeline. 
  4. 15 percent of your score is from the length of your credit history. The older the accounts, the more points for you. Do not close unused credit cards as a short-term strategy to raise your scores. If you are unhappy with them - wait until you've completed your home financing, then close them.
  5. 10 percent of your score is from the amount of new credit you've received. Do not open several new credit cards you don't need to increase your available credit. This approval could actually backfire and actually lower your credit scores. 
  6. 10 percent of your score is from having a "healthy" mix of of credit items. Refinance HELOC into mortgage will help because HELOCs are revolving credit lines and you will be penalized if you use more than 30% of it. Adding an installment loan to the mix will also help. The bureaus will score you higher if you have an open mortgage, 3 credit cards, 1 auto loan and a small amount of other open accounts.  
  7. Review and fix mistakes on credit report immediately by writing to the credit bureaus and explain why you think a listing is in error and include any documentation to back up your claim. You may also start the process online with Transunion, Experian and Equifax The creditor must acknowledge within 30 days that they have received your complaint. The creditor should then resolve the dispute within 2 billing cycles, or less than 90 days . The creditor should also explain any actions they took to correct the error, or explain why they believe there was no error. Be forewarned that once you start the dispute process - it must be resolved with each credit bureau. We cannot use credit report with "Account in Dispute" status in it.  Contact us for free consultation. Here's a sample of a credit report and how to analyze the content.
  8. Make at least minimum payment and set up automatic bill payment. Making partial payment less than minimum amount due counts as late payment.
  9. Have five to seven bank credit cards with balances around five percent of the high credit limit, not zero, although some of the perfect credit scores had accounts that were zero. In addition, you need to have the every other credit card with at least five to ten years of history. No new account less than five years old.  No credit card, auto loan or mortgage of any type less than five years old.  Also you cannot have any hard inquiries in the last two years. A hard inquiry is when you apply for credit. A soft inquiry is when a consumer checks their credit for their own information. Create a budget. The number one reason people get into trouble with paying their bills on time is because of lack of money management. Carefully go over your income and expenses and find ways to cut down your monthly outlay. Excess funds should be used to pay down existing debts. Thus, will result in lower credit utilization (as mentioned above).
  10. Consumers need at least one bank credit card that is thirty years old or older. A thirty year old history with no late dates ever on that account.  That is a key anchor for a perfect FICO score. In a short term - you can open a checking account that is linked to your credit card. Adding a new credit and positive payment history will help your FICO score.
  11. Be careful about applying for new credit especially store/departmental credit such as Macy's, Fred Meyer etc. Store cards will not give you as many points as a bank credit card (even with just 1 store credit). Any time you apply for new credit, an inquiry is placed on your credit report. The scoring model does not favor excessive inquiries. Shop from multiple lenders within 30-day period for mortgage and auto loans as all inquiries within that 30-day time frame counts as one inquiry. All inquiries stay on your credit report for up to two years. You should limit inquiries to 7 per year.
  12. Setup automatic bill pay for fixed payment accounts such as mortgage and utility bills to avoid late or miss payments (if you are not good at monitoring your accounts).
  13. Consolidate student loans. If student loans are in default, they can be consolidated and transferred to the U.S. Department of Education. This will help tremendously.
  14. Stop applying for new credit a year before applying for financing.

Please contact National Foundation for Consumer Credit or 1-800-388-2227 for information on debt management. 


Posted by Sam Kader on July 27th, 2015 6:25 PM

Inquiries can be classified into two categories; soft and hard inquiry. A hard inquiry shows up on credit report due to transactions you have initiated such as applying for a credit card, car loan, asking for a credit limit increase, set-up utility bills and applying for a new job. These inquiries typically stay for two years. Although, many will disappear within one year. As a general rule, limit inquiries to 7 per year only.

Soft inquiries
happen when existing creditor does a maintenance review of your file, when you pull your own credit report and a promotional credit is extended to you. Soft inquiries do not affect your credit rating.  

After a bankcruptcy discharge, debts that were discharged should be reported in the same category along with "good items" as accounts that are current. They should not be reported under derogatory category.

Obtain a free credit report annually from
Free Annual Credit Report. Upon bankcruptcy discharged, establish new trade lines by secured credit card and get an auto loan.


Did you know that paying a collection account can actually reduce your score? Here’s why: credit scoring software reviews credit reports for each account’s date of last activity to determine the impact it will have on the overall credit score. When payment is made on a collection account, collection agencies update credit bureaus to reflect the account status as “Paid Collection”. When this happens, the date of last activity becomes more recent. Since the guideline for credit scoring software is the date of last activity, recent payment on a collection account damages the credit score more severely. This method of credit scoring may seem unfair, but is it possible to pay a collection and maximize your score?

The best way to handle this credit scoring dilemma is to contact the collection agency and explain that you are willing to pay off the collection account under the condition that all reporting is withdrawn from credit bureaus. Request a letter from the collector that explicitly states their agreement to delete the account upon receipt/clearance of your payment. Although not all collection agencies will delete reporting, removing all references to a collection account completely will increase your score and is certainly worth the involved effort. Collection account will stay on your credit report for  7 years. 


Within the delinquent accounts on your credit report, there is a column called “Past Due”. Credit score software penalizes you for keeping accounts past due, so Past Dues destroy a credit score. If you see an amount in this column, pay the creditor the past due amount reported.  


Charge-offs and liens do not affect your credit score when older than 24 months. Therefore, paying an older charge-off or a lien will neither help nor damage your credit score. Charge-offs and liens within the past 24 months severely damage your credit score. Paying the past due balance, in this case, is very important. In fact, if you have both charged-off accounts and collection accounts, but limited funds available, pay the past due balances first, then pay collection agencies that agree to remove all references to credit bureaus second.  


Contact all creditors that report late payments on your credit and request a good faith adjustment that removes the late payments reported on your account. Be persistent if they refuse to remove the late payments at first, and remind them that you have been a good customer that would deeply appreciate their help. Since most creditors receive calls within a call center, if the representative refuses to make a courtesy adjustment on your account, call back and try again with someone else. Persistence and politeness pays off in this scenario. If you are frustrated, rude and unclear with your request, you are making it very difficult for them to help you.  


Strive for owning 3 to 6 credit cards. You may close credit cards if they are less than 2 years old and you have over six credit cards. 15% of the score is determined by the age of the credit file. Use old credit cards once every six months to avoid it from becoming inactive and unused in credit scoring.  

For everyone else, there are standard FICO scores, which range from 300 to 850. The median is 723, meaning half of consumers score better and half score worse. The higher the number, the stronger the rating. 


Paid tax liens that have been paid, released or satisfied can be deleted from a credit report and public records within 30 days. Federal unpaid tax liens can be deleted if they have balances less than $25,000 with on time payments to the IRS.

Credit Bureaus - Here's how you can contact each credit bureau:

Equifax: 800-685-1111,
Experian: 888-397-3742,
TransUnion: 800-888-4213, 

Each bureau credit score should be close to one another. However, sometimes they are not and there are several reasons for this. The first reason is not all creditors report the same information at the same time to each agency and creditors are not required to report to all credit bureaus.
The 2nd reason is each credit bureau uses its own customized version of the FICO credit scoring model developed specifically for that agency and its data. Thus, the results may differ. The 3rd reason is some information may not follow the individual completely due due to different names because of marriage or variations in their name or different addresses. That's why it's imperative that you must check your credit report at least once a year.  


Credit myths

Myth: Once you have credit problems, your credit score will not improve for seven years.
You can improve your credit score over a shorter time period. Most recent entries to your report carry more weight than old ones.

When paid, the bad debt will go away.
Bad debts, charge-offs and late payments can stay on your credit report for at least seven years. But you can provide an explanation of your situation in a limited space on future credit reports.

Myth: If you catch up on your late payments, it won't show up on your credit report.
Fact: Your credit report must show that you are caught up, but will also show that you were late.

Myth: If you have a good FICO score, one late payment won't hurt it.
Fact: A first-time delinquency can drag down your score by at least 100 points. The later the payment, the more the damage.

Myth: You have to pay to fix errors on your credit report.
Fact: Nobody needs to pay to fix errors. Contact the credit bureau that created the report and work with the bureau to erase mistakes. The process usually takes abut 1 billing cycle to complete. If you can't wait - we can assist you with 
service that could help expedite the process.

Myth: You will be penalized for checking your credit report.
Fact: People can check their credit report or score as many times as they want without hurting their credit rating. When shopping for a mortgage, your credit can be checked multiple times in a 30-day period without penalty.

Myth: You should close as many credit cards as possible before applying for a mortgage.
Fact: Having credit cards open does not harm your credit score and can even help if they are in good standing. Having them maxed out hurts.

Myth: It will take seven years to improve credit.
Fact: Most negative items will remain on your credit report for up to seven years, as long as they are accurate, verifiable, and actually occurred within that period of time.  Of course, many items are NOT accurately reported, and are not verifiable. Therefore they can be removed.

Myth: Foreclosure or bankruptcy permanently hurts your credit score.

Fact: Foreclosure will remain for seven years and Bankruptcy Chapter 7 will remain for a decade and Bankruptcy Chapter 13 will remain for seven years. In both cases - the bankruptcy will remain in the public records section for 10 years. You can buy again in as little as 2 years depending on your circumstances.

Myth: The credit bureaus are government agencies.

Fact: Credit bureaus are for profit companies. They collect data to sell to lenders and providers and ARE NOT affiliated with the government. They are governed under Federal Trade Commission.


Posted by Sam Kader on April 19th, 2014 1:30 PM

What is Rapid ReCheck?

A premium service that assist borrowers who have erroneous and derogatory information on their credit files that may be negatively affecting their FICO scores or if borrowers want to accelerate payoff information on their accounts. Our credit vendor can assist in expediting corrections to credit files at the bureau level. After corrections are made, files are re-accessed in order to obtain an updated credit score. Files are corrected and credit scores updated within 3 - 4 business days (instead of 30 days). 

What is the Rapid ReCheck process?

The consumer must contact the creditor to obtain supporting documentation for the requested change. We will provide copies of this documentation to our credit vendor - CREDCO. CREDCO then verifies the documentation and forwards to the bureau(s) for the profile to be updated. The bureaus notify CREDCO when the file is updated and CREDCO pulls a new report to receive the updated score and releases the new file to us.

What documentation is required to process a Rapid ReCheck?

The bureaus require letters from the creditors or certified court documents. These documents do not have to be originals, but must be verifiable. The letters must include the creditor name, address, phone number and a contact name. Consumers must contact the creditors in questions directly to obtain the documentation.

How much does one change in a credit profile affect the score?

In general - paying off credit cards/trade lines and removing derogatory remarks will increase your score (all else the same). However, due to the multiple factors involved in determining a credit score and the dynamic on-line nature of credit scoring, it is impossible to determine how much one change will affect a score.

If derogatory information is removed from a report, will the score automatically increase?

In most cases - Yes. However, it is also possible that a score will not change and it may even decrease. Scores are not based solely on derogatory information. Other factors such as length of credit history, types of credit in use and the pursuit of new credit are also considered. The analysis of the credit profile can include one or more of these mitigating factors, which may change in conjunction with the derogatory information in question.

Why does CREDCO charge for Rapid ReCheck?

The bureaus charge us for the accelerated file maintenance service and for re-pulling the credit report after the file is updated. In addition, since this is an entirely manual process, there are significant labor costs. The cost is $30 per account/trade line per credit bureau. 

Posted by Sam Kader on October 7th, 2013 6:28 PM

Most people can tell you pretty much to the penny how much their mortgage or rent is every month. They can tell you how much they pay each month for their car loan. However, they have no clue what percentage of their income should be allocated towards housing or transportation. Many simply don't know.

Budgeting using percentages help you increase savings, repay and reduce debt, prevent impulse spending, distinguish between a need and a want and identify expenses that can be reduced. 

Following is a sample guidelines of budget allocations (including comfortable or affordable ranges):

  1. Personal debt (credit cards, personal loans), 14 percent, with a range of 10 percent to 20 percent.
  2. Housing, 27 percent. Range: 20 percent to 35 percent.
  3. Food, 21 percent. Range: 15 percent to 30 percent.
  4. Transportation (including car loan, insurance, gas, etc.), 8 percent. Range: 6 percent to 20 percent.
  5. Utilities, 6 percent. Range: 4 percent to 7 percent.
  6. Clothing, 4 percent. Range: 3 percent to 10 percent.
  7. Miscellaneous (travel, child care, entertainment, gifts), 1 percent. Range: 1 percent to 4 percent.
  8. Savings, 7 percent. Range: 5 percent to 9 percent.
  9. Insurance (health, life, disability), 6 percent. Range: 4 percent to 6 percent.
  10. Personal care, 3 percent. Range: 2 percent to 4 percent.
  11. Health (prescriptions, eye care, dental), 3 percent. Range: 2 percent to 8 percent.

Keep in mind these percentages and line items are just guidelines. They help you establish a barometer. The range and categories will depend on a lot of factors, whether you're married, have children or live in a high-cost area. If 60 percent of your income is spent on housing, transportation and food, you've got to make the remaining 40 percent work by refiguring the percentages.

Everyone is different, and each one of us have a percentage for each item. 

Additional tips:

  1. People who are 50 or better should save an additional "catch-up" amount i.e additional $5,000 a year in 401(k)s.
  2. Save automatically to retirement savings.
  3. Cut small expenses.
  4. Trim big expenses.
  5. Stop using credit cards. If you've arrangged to have some recurring charges automatically billed to your credit card, switch it to a debit card.
  6. Compare rates amongst existing credit card companies.
  7. Consider a home-equity line with lower rate and tax-deductible.
  8. Pay-off cards with the highest interest rate first and pay more than the minimum.
  9. Do not tap into your retirement account if you are under 59.5 years old.

If you end up with credit card debts:

  1. Do save money while repaying debt
  2. Do automate payments on recurring bills
  3. Do pay in cash or certain purchases or use debit card.
  4. Do find the best interest rate.
  5. Do read the fine print
  6. Do pay on time every time.
  7. Do remember that borrowed money is not free.
  8. Don't borrow money frivolously.
  9. Don't borrow money without telling your spouse.
  10. Don't carry credit card balances.
  11. Don't borrow money more than you can affford.



Posted by Sam Kader on January 11th, 2009 11:21 PM

According to the Better Business Bureau:

  • Debt collectors may not contact you before 8:00 AM and after 9:00 PM and they may not contact you at work if you tell them that your employer disapproves.
  • Typically stature of limitations is between three to six years. Debts older than that cannot be collected. Check the date of your debt. Paying even a small portion of an expired debt may reaffirm the debt and trigger the obligation to repay it in full.
  • In general, collectors cannot contact you after you write a letter to the collection agency telling it to stop.
  • Collectors cannot contact your friends, relatives, employer and other except to find out where you live.
  • Collectors are not allowed to harass you. No use of profane language, threats of harm to you or your reputation.
  • Collectors cannot make false statements such as you will be arrested.
  • Request verification of the debt. If there has been an indentity theft - police report is required.
  • If you have a lawyer, then communication should be directed to the attorney.

Debt collectors have access to your credit files. They can check if you have bought a new home, have cable services or have recent purchases on credit. Bottom line - COMMUNICATE with bill collectors even your respond is you can't pay right now.



Posted by Sam Kader on March 10th, 2008 12:29 AM



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