5 Ways to Give Your Credit a Kick in the Pants!
By Michelle Black

Earlier this week we discussed The 5 Fastest Ways to Damage Your Credit.  If you have not reviewed this list yet, please take a moment to check out the article.  It may save you from making a detrimental mistake which could set your credit score back as much as 100 points!

However, today we will be focusing on a subject that is always much more enjoyable: Ways to improve your credit.  Since the 3 credit bureaus (Equifax, TransUnion, and Experian) all have a different system they use to determine your credit score, it is impossible to predict specifically how much any one action will change your credit score.  Still, we do know that if you heed the following advice, your credit scores cannot help but to improve with all 3 of the credit bureaus (as long as no new negative actions on your credit counteract the new positive changes):

1.  Make payments on time.
I always like to start with this recommendation because payment history is the single most important factor making up all 3 of your credit scores.  A whopping 35% of your credit score is determined by your ability to make your payments on time.  Even if you have had some recent late payments (within the past 24 months) that have damaged your credit score, if you make a plan today to start paying your current bills on time you will start to slowly dig yourself out of the hole. Plus, if you want to dig yourself out of the proverbial credit hole even faster you can check out some of the great services that HOPE has to offer.
2.  Have enough open credit cards.
It is important to have open revolving accounts (AKA credit cards) on your credit report.  Your credit score is a snapshot to potential lenders of how you pay your bills.  Therefore,  if you do not have enough open accounts, you may have low scores or even no scores at all. HOPE members, please check with your HOPE credit specialist to see if it is recommended for you to open additional credit card accounts or if you already have enough active accounts appearing on your credit report.
3.  Pay down open credit cards.
Yes, it is definitely recommended that you establish some current credit card accounts if you do not currently have enough open.  However, it is not recommended that you establish any new debt by charging up the balances on your credit cards.  If you do have balances on any of your current credit cards, especially if the balance is over 50% of your credit limit, aim to pay off your credit cards ASAP.  You could potentially see a huge increase in your credit scores by following this advice.  (Note: current HOPE members can contact us to request a HOPE Snowball Debt Payoff Worksheet for help making a plan to pay off your current debts.)
4.  Check your credit report for mistakes/erroneous information.
All 3 credit bureaus are quite notorious for making mistakes on our credit report.  Even if your credit report is in pristine condition, it is important to check your credit report 1-2 times every single year to make sure that there are no new errors being reported.  The good news is that you are legally entitled to a free credit report (minus your credit scores) every year from www.annualcreditreport.com.  Make sure to check your report with all 3 credit bureaus.
5.  Use old credit cards occasionally.
Your length of credit history makes up approximately 15% of your credit score.  This means that those older credit card accounts on your report actually help to boost your credit scores more than new accounts.  Often a creditor will automatically close a credit card account if you do not use it for a prolonged period of time due to inactivity on the account.  Solution?  Use your old credit cards several times per year for a small purchase (which you pay off immediately) in order to keep your older accounts open and active.

Don’t forget, if you or someone you know is in need of professional credit advice or assistance, we would LOVE for you to take the time to consider the services offered by the HOPE Program.  We want the opportunity to answer your questions and offer our unique expertise on all situations related to your credit report and credit scores.  There really is no such thing as a HOPEless situation! Please feel free to give us a call with any questions you may have at 704-499-9696.  We hope to hear from you soon!

Credit Cards – What Is the “Magic” Number?
By Michelle Black

Have you been thumbing through your stack of credit cards lately and wondered, “do I have too many?”  This is one of the most common credit questions I receive, so I thought I would share a little bit of insight into the matter.

The answer to the “how many credit cards should I have?” question is not necessarily the same for every person. As a general rule of thumb, it is advisable to have 3-6 open credit cards on your credit report. So, I can very easily advise that if you have less than 3 credit cards, you need more.  That being said, if you have more than 6 credit cards open right now I am NOT advising that you immediately close any accounts.  It is very important to have some professional guidance when and if you decide to close existing credit card accounts.  Closing the wrong account can potentially cause your scores to drop significantly.

If you already have 3 or more open credit card accounts is much more important to focus on your credit card balances rather than the actual number of credit card accounts you have.  Did you know that if you have a credit card with a balance that is over 50% of your credit limit then your credit scores will be lowered even if you are paying your bill on time every month?!?! This means that if you have a credit card with a $500 limit and you charge more than $250 on the card then your credit scores are affected negatively.  Your best bet is to keep all of your credit cards paid off to a zero balance.  (HOPE members have access to our “Snow Ball Effect” debt pay off plan to help begin eliminating credit card balances during their membership.)  By keeping your credit card balances at zero you also get to avoid paying those pesky interest fees and, therefore, save yourself some money!

Another fact about your credit card accounts that you should be aware of is how extremely important it is to make sure that your credit card is paid on time every single month.  Since 35% of our credit score is determined by our payment history it is easy to see how one single late payment can cause a huge drop in our scores.  In fact, I have seen a credit score drop as much as 100 points due to a single late payment on a credit card account!  Keeping your credit card balances at zero gives you further insurance against late payments as well.

We at HOPE would like to thank those of you who participated in our Facebook credit poll last week which asked the question “How many credit cards should I have open?” If you are not already a fan of our HOPE Facebook page we want to invite you to follow us on Facebook and/or Twitter for access to HOPE’s latest credit tips, special offers, and giveaways! Congratulations to Jill Lowe who won our credit poll contest last week and will be receiving a free professional credit analysis with a HOPE credit specialist!

If you have questions or need credit related advice, please feel free to give us a call at 704-499-9696.  Our friendly staff is waiting to hear from you and will be happy to help.

When Collection Agencies Attack!
How to Protect Yourself from Harassment

It is 10:00 pm, you are getting ready for bed after a long day of work, dinner, homework, and finally getting the kids to sleep.  The phone rings, you answer, and the voice you hear on the other line immediately causes your blood pressure to spike and your pulse to race.

Does this story sound familiar? For many Americans calls from collection agencies and creditors is an all too familiar burden.  With unemployment rates soaring, the current state of the economy, and the rising expense of every day living you may find yourself in the uncomfortable and very stressful situation of being unable to make ends meet.  However, just because you cannot afford to pay your past collection debt right now does not mean that you have to endure these harassing phone calls.  You still have the right to be treated with respect!

The good news is that the Federal Trade Commission, most States, and the Fair Debt Collection Act (FDCA) can all help to protect you from collection agency/creditor harassment.  The FDCA has very clear rules which regulate what debt collectors can and cannot do. For example, according to the FDCA, a creditor cannot:

1.  Threaten violence or threaten to harm you and/or your family in any way.
2.  Use obscene/profane language.
3.  Repeatedly use the telephone to annoy a consumer.
4.  Make false statements such as
-falsely claiming they are attorneys or government representatives
-falsely claim that you have committed a crime
-misrepresent the amount you owe
5.  Say that you will be arrested if you do not pay your debt.
-Note: There is no debtor’s prison in the United States!
6.  Call your employer.
7.  Call you before 8:00 AM or after 9:00 PM.

So, what is the secret to stopping collection calls?  There are actually several options available to you.  Here are a few:

1.  Negotiate and settle the debt.
-Once an account is paid the collection calls will, generally, stop.  However, it is very, very important to have a debt negotiations specialist (like HOPE) assist you while settling your old debt to insure that you receive the lowest settlement possible, to be sure that your credit report is updated properly to show a zero balance on your settled account, and to hold the creditor responsible to keeping his/her word and not changing the settlement terms in the middle of your negotiations process.

2.  Request for the calls to stop.

-If you simply are not financially ready or able to settle out your old debt at this time you still have rights! Many times simply mentioning the Fair Debt Collection Act will stop a creditor’s calls. Also, when a creditor calls you can:

a. Ask the caller to identify themselves.
b. Ask him/her to provide you with their agency’s address.
c. Send a certified letter to the agency asking them to stop calling.

Now, it is important to remember that while you can legally stop collection phone calls, just because the calls stop does not mean that you no longer owe the debt.  Whenever you are ready to deal with your past debt and begin working to restore your credit scores we invite you to give HOPE a call.  Our caring credit specialists can provide you with a detailed analysis of your current credit report, show you how the HOPE Program can help you to address any negative accounts on your report and work to help you achieve the healthy credit scores you desire to have.

There is truly no such thing as a hopeless situation!  HOPE has helped clients with as many as 86 collection accounts and hundreds of thousands of dollars in debt to turn their credit situation around and become homeowners!  In fact, HOPE has had over 70 graduates in the past 4 months to complete our program with credit scores healthy enough to purchase a home!  If you would like to schedule a personal credit analysis, or just learn more about the awesome membership benefits offered through HOPE, please give us a call today at 704-499-9696.  We can’t wait to hear from you!

Every year at tax refund time we have many clients wisely choose to  invest part of their tax refund check towards achieving a healthy credit report. Wouldn’t you love for 2011 to be the year when you finally reach the higher credit scores you desire? Wouldn’t it be wonderful if 2011 was the year when you were finally able to stop those pesky collection calls and possibly even become a homeowner?

HOPE would love the opportunity to help you reach your goals! You can join the ranks of the 70+ HOPE graduates who have completed the program with credit scores healthy enough to purchase a home in just the last 4 months! Call or email us today to schedule your own personal, no obligation credit analysis with one of our credit experts to see if the HOPE Program is right for you. We can’t wait to hear from you soon!

Check out our article in the December issue of At Home Magazine! You can pick up a copy of At Home Magazine at your local Harris Teeter, BP gas station, or Lowes Food Store as well.

Credit Myths Exposed!
Part 2
By Michelle Black

Last month we discussed 3 very common credit myths and the impact they can have upon your credit report.  Since there are so many credit myths, and since this is such an important subject, we will continue our article this month on the same theme.  Misconceptions about credit and following bad advice can damage your credit score and could even cost you thousands of dollars.  We encourage you to educate yourself regarding credit, take control of your financial future, and don’t let yourself fall victim to any the common credit myths listed below.

Credit Myth #1:  I shouldn’t check my credit too often because too many inquiries can lower my credit score.

The Truth:  You can personally check your credit report with no negative impact.  You are even entitled to a free credit report every year at www.annualcreditreport.com.  This is called a “soft” credit pull.  A “hard” credit pull happens when a lender pulls your credit to see if you qualify for a loan.  “Soft” pulls do not affect your credit score; however, “hard” pulls typically cost you 1-5 points and affect your credit score for approximately 6 months.  So, while it is fine to check your own credit report often (HOPE recommends checking your credit 1-2 times per year), it can damage your score if your credit is pulled by a lender too often.

Credit Myth #2:  One late payment won’t hurt my credit score.

The Truth:  Payment history is actually the #1 factor used by the credit bureaus to determine your credit scores.  Late payments can have a huge impact upon your credit scores.  To give you an example, several years ago we had a HOPE client whom we had helped to clean up his credit report to the point where he could qualify for a great interest rate on his home loan.  He was moving to North Carolina at the time.  During the busyness of moving he forgot to make a $15 credit card payment.  When his credit report was pulled later that month for his mortgage application his scores had dropped over 100 points!  Thankfully, we were able to walk him through talking to his credit card company in order to request that the late payment date be removed due to the circumstances.  Once the late was removed his scores recovered and he was still able to purchase his home.

Credit Myth #3:  Once a collection account is paid the account will be erased from my credit report.

The Truth:  Paying a collection account won’t automatically make the red mark on your credit report go away.  In fact, a paid collection account can remain on your credit report for up to 7 years.  Often times the creditor never bothers to update your credit report to reflect a $0 balance after receiving payment for a collection account.  It is always best to use a professional debt negotiator, like HOPE, to make sure that your paid collection accounts are updated on your credit report properly and promptly.

Credit Myth #4:  It’s best to work on cleaning my own credit report because all credit repair companies are scams.

The Truth:  “Credit repair” has a bad name, for a good reason.  Most credit repair programs are incomplete and, while they may help improve your credit report somewhat, they almost never help you to achieve a completely healthy credit status.  It’s always best to work with a credit education program like HOPE which provides negotiations and personal credit advice in addition to the dispute services provided by your average “credit repair” company.

Also, everyone has the legal right to work on their own credit report.  If you encounter a company that tries to misinform you regarding your rights, you should run the other way!  Still, please keep in mind that while you are legally able to work on your own credit report it is usually best to have a professional to assist you when cleaning up past credit issues.  You are legally allowed to represent yourself in a court of law as well; however, most of us would prefer to have an attorney represent us in order to ensure we receive the best result possible.  Repairing your credit follows the same principle.

If you have credit issues or low credit scores which are keeping you from achieving your goals of homeownership or financial freedom please give us a call!  HOPE can proudly announce that we have had over 70 graduates in the past 4 months alone to complete our program with credit scores healthy enough to qualify for a home loan!  You can overcome the credit problems you are facing too and we would love to help you achieve a wonderful success story of your own!  Please visit us online at www.HOPE4USA.com or call 704-499-9696 today for more information or to schedule your personal credit analysis with a HOPE Credit Specialist. We can’t wait to hear from you!