Do you want to learn to boost credit scores in five minutes?
Well, on this week's Podcast, I'm gonna show you exactly how to do it!
Credit Repair isn't rocket science. All you have to do is learn your rights and take action! It's a simple process that removes inaccurate information from Credit Reports and increases Credit Scores.
You can do it yourself or hire a Credit Repair professional. Either way, the basics remain the same. Like fixing your car or doing your Taxes, investing in a pro can save you a lot of time and money, but learning how to do it yourself is cost-effective, and you acquire a valuable new skillset!
In fact, most successful Credit Repair professionals begin their journey by boosting their Scores. They decide to help their friends and family do the same. Then they turn their skills into a profitable new business.
Considering 79% of Credit Reports contain errors and 40% of Americans have scores below 700, those skills are needed now more than ever!
So, whether you do it yourself or hire a professional, the important thing is you take action toward a better Credit Score and a brighter financial future.
HOW THIS RELATES TO US
If you choose to Repair your Credit yourself, you'll need to get comfortable reviewing Credit Reports, identifying errors, and mailing dispute letters to the Credit Bureaus. And depending on the circumstances, you may need to file complaints with regulators or enlist the help of an attorney.
If you hire a Credit Repair Professional, they can handle the entire process for you, potentially achieving better results faster. But do your research and pick a reputable company. Stay away from scams promising quick fixes.
Even if you don't plan on buying a house, getting a loan, or building a Credit Repair empire any time soon, you should still be working to improve your Credit Score! A higher score means it's cheaper to borrow money. You have more purchasing power and more negotiating power with lenders.
Whenever you take out a line of credit, your repayment interest almost always depends on your Credit Score. The better your score, the lower your interest rates and the more money you save.
For example, if you apply for a mortgage and have good credit, you generally get an interest rate of 1.5% LESS than somebody with bad credit. This means on a 30-year mortgage, you save TENS of THOUSANDS.
So, now that you know the benefits of having a good Credit Score, let's talk about Credit Score GOALS and how to achieve them! If I move fast, don't worry, I put all this info in a guidebook that you can download for FREE at 7 Simple Things to Increase Your Credit Score.
THE THING TO REMEMBER
Credit Scoring is a system that lenders, creditors, and other organizations use to evaluate your creditworthiness. The most commonly used scoring model is the Fair Isaac (FICO) score, which ranges from 300 to 850.
The higher your score, the better your credit standing. Here's a breakdown of the different Credit Score ranges and how they're graded:
300 - 579 is considered POOR
580 - 669 is FAIR
670 - 739 is GOOD
740 - 799 is VERY GOOD
800 - 850 is considered EXCEPTIONAL
FICO scores are calculated using five categories, each weighing differently on your score. Payment History makes up 35% of your Credit Score, Credit Utilization or Amounts Owed is 30%, Length of Credit History is 15%, New Credit is 10%, and Credit Mix makes up 10% of your Score.
The three main Credit Bureaus, Equifax, Experian, and TransUnion, use the FICO model to build your Credit Scores. Unfortunately, they sometimes have different information, which results in three different Scores. This is also why we must dispute each error individually with the three Bureaus.
Now, you might be wondering, "Do I need a perfect 850 Credit Score?"
Well, according to recent FICO statistics, only about 1.6% of the 232 million U.S. consumers with a Credit Score have a perfect 850. It takes years of hard work to reach it and extreme discipline to maintain it.
But the truth is you don't need a perfect 850 Credit Score to achieve financial success!
According to Ethan Dornhelm, VP of FICO Scores & Predictive Analytics, "To lenders, a consumer with a score in the 800s is a sparkling applicant."
So, from the standpoint of qualifying for credit, it doesn't matter whether you have an 850 or a score just below it.
WHY THIS IS IMPORTANT
FICO scoring data shows that a 760 Credit Score is the minimum needed to be offered the best interest rates from lenders. Some experts say a Credit Score of 780 is the target to hit to get the best available rates.
But whether it's 760, 780, or 800, there's one Credit Score fact everyone agrees with…the higher, the better! So no matter your Credit Score, any opportunity you have to boost it, you boost it!
WHAT YOU NEED TO KNOW
You can do a ton of Simple Things to raise your Credit Score.
First, Review Your Credit Reports and Correct all the obvious Errors. 79% of Credit Reports contain errors. So, carefully review your reports, look for inaccuracies, and dispute them immediately.
If you still need access to your Credit Reports, you can request free copies from each of the Credit Bureaus at AnnualCreditReport.com.
Start by confirming that all your personal information is up-to-date and accurate. It's unbelievable how often this is the cause of scoring issues.
Note any suspicious items that don't belong to you or duplicate accounts. Accidental duplicate accounts are a common problem for those with student loans or accounts in collections, but they also could be a sign of fraud. Investigate their cause and contact the Bureaus immediately.
Review the details of any negative items on your Credit Report, including Late Payments, Charge-Offs, Collections, and accounts listed as "Settled," "Paid Derogatory," or "Paid Charge-Off." Check them for errors.
For example, most negative items can only appear on Credit Reports for a limited time, typically 7 to 10 years. I call it the Credit Time Clock. If an item exceeds its time limit and doesn't fall off automatically, demand its removal.
Another way to Boost your Credit Score is to Get your Credit Utilization ratio below 30%.
Credit Utilization is the second most important factor in determining your Credit Score, and it's the easiest to address.
Credit Utilization refers to the amount of credit you're using compared to the total amount of credit available to you. The most common number associated with Credit Utilization is 30%.
For example, if you have a credit card with a $10,000 limit, you should only use up to $3,000 at any given time, even if you pay your account off in full each month.
If your balances exceed 30% of your credit limit, you can pay it down or request that your creditors raise your available credit limit. Do what makes the most sense for you.
Also, Pay Attention to the Length of your Credit History!
The Length of your Credit History is 15% of your Credit Score. Closing old accounts can shorten your history, hurting your score. So, keep old accounts open and use them occasionally to maintain your positive record.
If you hate credit cards as I do and don't want to use them anymore, cut them up or hide them away, but keep the account open! Don't let them do more damage by getting rid of them.
Last, if you want to Improve your Score, Apply for Credit Sparingly.
Every time you apply for new lines of credit, your report gets checked, which can harm your score. If lenders see too many applications on your report, they might see it as a sign that you're a high-risk borrower. On top of that, opening new lines of credit and accounts less than a year old can actually hurt your score!
New Credit accounts make up 10% of your Credit Score, so only apply for new lines of credit when necessary.
There's so much more to say and more ways to boost Credit Scores, but I'm already over the 5-minute mark, and you can check out the rest when you download my Free guidebook at 7 Simple Things to Increase Your Credit Score.
MY FINAL POINT
Credit Repair isn't rocket science. You can do it yourself or hire a professional, and most professionals started by doing it themselves.
But either way, all you really need to boost your Credit Score is to learn your rights and take action!
I'LL END BY SAYING...
If you still need a Credit Repair Cloud account, check it out. It's the software that most Credit Repair businesses in America run on. Sign up here for a Free Trial!
And if you'd like to change lives and grow your very own Credit Repair business, check out our Credit Hero Challenge!
It's an amazing program, and we've got another challenge starting in a few days, so grab your spot right now at CreditHeroChallenge.com!
So take care, Credit Hero!
Keep Changing Lives!
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Hey, Credit Heroes! Tax days are approaching really fast. But did you know that paying your taxes can impact your credit score? That's right. And today, I'm going to explain everything you need to know before you pay that tax bill. So you better stick around. So the big question is this, how can we take our passion for helping people with their credit and turn it into a successful business without taking loans without spending a fortune by bootstrapping it from nothing? So we can help the most people and still become highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen, and welcome to credit repair business secrets.
If this is your first time listening to my podcast, every week, I give credit repair tips and advice on bootstrapping your business from nothing. So be sure to click subscribe now and get ready to start changing lives.
Okay, let's get into this as the tax deadline approaches, it's important to know how tax debt can impact your credit and your life. While taxes themselves don't directly impact credit reports. Failing to pay your tax bill or using credit to pay your tax bill can indirectly hurt your credit in significant ways. So today, I'm going to discuss how unpaid taxes can affect your credit, and how paying your taxes can also impact your credit. Now, if that sounds confusing, don't worry. It's pretty simple, and I'm gonna explain everything. Here's how this relates to us. Every year after all the tax returns are filed. About 75% of Americans receive a refund and 25% receive a bill a tax bill starts the collection process, which continues until your tax debt is paid off, or the collection period expires in 2020. The average tax debt reached over $16,000. The most common causes for tax debt included owing more than expected unfiled taxes and divorce not paying your tax bill on time can cause penalties, interest on penalties, a tax lien, and IRS levy action, or in some cases if the debt goes totally unpaid. It's even possible to get banned from traveling internationally.
So if I didn't make it clear, pay your taxes for those new to credit repair. A tax lien is a legal claim that the government places on property or assets when a tax bill is passed due. If the tax bill remains unpaid. The tax lien can become a tax levy, which is the legal seizure of your property assets bank accounts, and wages in the past tax liens and other judgments dropped credit scores by 100 points or more repaid tax liens would appear on credit reports for up to seven years and unpaid tax liens could remain on your reports indefinitely. I had a tax lien years ago, I was in showbusiness, which meant that I was out of work most of the time. But one year I actually got a whole lot of gigs. And then the next year I had no gigs and I was back to living on my credit cards. And then I got that tax bill. It was for over $20,000 which was so much money. It was more money than I could imagine having at one time and I had no money to pay for it. I didn't have a job, and that tax lead was horrible. I eventually paid it off in installments. It took a long time and it continued to haunt me for seven years. It was awful. It was embarrassing, especially anytime someone looked at my credit report. However, in 2018 federal and state tax liens and other tax-related court judgments were removed from credit reports, which is awesome.
But why did the Bureau stop including them in their reports? Well, the change was made as a result of a study by the Consumer Financial Protection Bureau which found that many tax penalties were not being accurately reported, leading to unfair negative impacts on consumers. So in 2015, to improve the accuracy of public record data collecting and reporting, the three major credit bureaus partnered with more than 30 US state attorneys general and agreed to the National Consumer Assistance Plan. Under this plan, the tax penalties and other judgments disappeared from credit reports. Hurray. But even though they no longer appear on credit reports, there's still a financial impact. Here's the thing to remember, tax penalties like liens and levies are all public records. Lenders can still find them and use them to decide your financial future. So you want to avoid tax penalties whenever possible. If you can pay your taxes on time and in full, pay them just Don't overextend yourself and go into worse debt to pay them. Here's why this is important. If you're in a position where you need to borrow money in order to pay your tax bill, that's okay. Just be extremely careful how you borrow. Or you could dig yourself into a worse financial hole. If you pay your tax bill with the wrong credit card, and you can't keep up with the high-interest rates.
The penalties for late payments can still damage your credit just like any other late payment, or if you max out your available credit in order to pay your tax bill, the high credit utilisation is going to damage your credit score. For example, it's not uncommon for one maxed-out credit card to drop a credit score of 45 points. Similarly, if you choose to pay your tax bill with a personal loan, and the repayment terms are more than you can afford, you can default fall into collections, and do even worse damage to your long term finances. In most cases, the best option for paying a tax bill and minimizing the impact that it has on your credit is to set up a payment plan with the IRS. Here's what you need to know. The IRS recommends that if you can't pay the full amount owed by the filing deadline, you should still file your tax return. pay as much as you can at the due date and request a payment plan for the remaining balance of your specific financial circumstances. determine if you qualify for a short-term payment plan which requires you to pay the full amount in 180 days or less or a long-term payment plan which requires a monthly installment agreement, you may be eligible for a short-term payment plan. If you owe less than $100,000. In combined tax penalties and interest, you may be eligible for a long term payment plan. If you owe $50,000 or less in combined tax penalties and interest and have filed all required returns. Individuals can apply for IRS payment plans@irs.gov using their online payment agreement tool or by submitting the form 9465 installment agreement request and attaching it to the front of their tax return. And I'll add all these links over there in the show notes.
It's important to note that setting up an IRS payment plan does not trigger any reports to the credit bureaus so you're safe there. Also when a payment plan is requested. with certain exceptions, the IRS is generally prohibited from laughing and the IRS's time to collect is suspended or prolonged while an installment agreement is pending. If you're concerned about your credit score during tax season, I recommend that you turn to a credit repair professional with experience as a tax preparer. And if you're a credit repair professional, I recommend contacting your clients and explaining how they can protect their credit as they pay their taxes. Here's my final point. Your taxes may not affect your credit report directly, but their indirect impact can be serious. So if you receive a tax bill, don't ignore it. Take action immediately. Don't let it become a crippling tax debt, contact the IRS to determine the best payment option and avoid falling into a worse financial trap.
And just a reminder, this podcast is brought to you by Credit Hero Score. Credit Hero Score is the only credit monitoring service that integrates directly with the Credit Repair Cloud get instant access to your credit reports and scores by signing up for a seven-day trial for only $1 Sign up right now at creditheroscore.com.
And now for my favorite part of the episode. Every week I feature one of our credit heroes inside our credit repair cloud Facebook community so that you can see firsthand what real people are doing as they run and grow their businesses. And today's spotlight is on Nan Sita I reserve a man's seat has posed caught my eye because there's a picture of a brand new Bentley in it. She explained that she took her client from a credit score of five hundred to seven hundred and now he has his dream car. Then Sita said this client only used cash. He really did not understand the concept of credit. He was the only client that stayed with me for more than six months because he didn't listen. And one day I woke up and shows violence and told him either you listen and follow or I will drop you. Well. Not only did he listen, but he closed on his first home last month got approved for an AmEx, and bought that new Bentley. Now that is a true credit hero. She is changing lives and turning dreams into reality. And then Sita Keep up the great work and keep posting your wins.
And I'll end by saying you If you still need a Credit Repair Cloud account, check it out. It's software that most credit repair businesses in America run on. Just sign up for a 30-day free trial at creditrepaircloud.com/freetrial. And if you'd like to change lives and grow your credit repair business, check out our credit hero challenge. It's a live experience that has helped tonnes of credit heroes to get certified in disputing and to gain confidence as they run their credit repair business on a solid foundation. So they can change a whole lot of lives and make a great living in the process. We're starting the next challenge very soon. So you want to join before the door is closed, or you're gonna have a long wait until the next one. So sign up right now at creditherochallenge.com. If you're finding value in the things that I share on this podcast, click below to subscribe and follow.
Also, give me a five-star review or share the show and help me to change more lives. If you'd like to read the show notes, they're posted on my blog. If you have a question or comment, drop it down below because I read each and every one of them, and I would love to hear from you. And I'll respond as soon as I can. If you want to learn more about how court judgments affect your credit, check out my episode secrets to removing court judgments. So take care credit hero and keep changing lives.
Hey everybody, it's Daniel again. And really quick, I'd like to invite you to join what I believe is the best thing we have ever created inside the credit repair cloud community. And it is a challenge that we call the credit hero challenge if you're just planning out your business, or you're just getting started, and you dream of having a successful business of your own. So you can quit your nine-to-five and fire your boss and have financial freedom or so you can add another revenue stream to your existing business. If that's your dream, you need to get into this challenge. We created this challenge to help you to create and launch your very own credit repair business to build a proper foundation for a really successful business. This challenge is going to help you to understand the strategy, the tactics, and all the things you need to be successful at credit repair. It really is the greatest thing we have ever built, and it will change your life. So I recommend you do it right now. Stop everything pause this audio go online and go to creditherochallenge.com That's creditherochallenge.com and join the next challenge. And there's a challenge that starts in just a few days. So go get started right now at creditherochallenge.com
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