Month: May 2017

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5 Common Credit Myths

Credit Myth 1: “Going over the balances on your credit limits is okay, because after all, the credit card company authorized the purchase.” 

This myth seems like it has its origin story as a rationalization from a compulsive spender, doesn’t it? Regardless, it’s not true in any way, shape or form. What will ultimately show on your report is the amount of credit that you used versus your credit limit.

Credit Myth 2:  “As long as you pay off your credit card balances, your score will go up.”  

The reality is that if your credit card is maxed out, you’re paying on it will just affect your payment history and mostly like it will remain the same.  As you pay credit cards down, then your score will get better, as your utilization rate goes down.  But just paying on time, in and of itself, will not make your score go up.

Credit Myth 3: “Types of Credit don’t matter, it’s all the same.” 

Actually, the credit scoring system gives more weight to some types of credit providers better than it does to others.  They give better weight to an American Express than they do to a sub-prime Visa or MasterCard.  They give more weight to Visas and MasterCards by predominant national banks that they do to furniture store cards, or gas cards, or department store cards.  They feel that consumer are desperate if they can’t attain a major credit card, therefore, they give more weight to the major credit cards.

Credit Myth 4: “Paying off an old collection or charge off will increase your credit score.”  

This is a huge myth, and it’s contagious because it makes sense. Really, though, what will happen is that as soon as you pay off an old collection or charge off, the “date of last activity” becomes more recent, and therefore they get to report that item for another seven years!  As accounts get older, they affect your credit score less and less.  Now, I’m definitely not saying that you shouldn’t pay off old debts, but it’s an important detail and something to be concerned about.     

If you’re most concerned about your credit score, then paying off debts prior to obtaining any other type of loan or mortgage will certainly hurt you greatly because they will be re-aged, and it will affect it as if it just happened yesterday.  The recency of any derogative item has a great affect on how it affects your overall credit score. 

Credit Myth 5: “Using debit cards will help to build your credit.” 

Nope. This, too, is completely false.  Debit cards are just like your bank account, they do not get reported to the credit reporting agencies in any way.

At La Familia Multiservices, we will work with you to repair your bad credit and will help you raise your credit score. We really want to help people repair their credit and we do so in a very professional way that is really personable.  We will assess your credit and let you know where you currently are and where you should be. Our credit repair specialists will help you set goals and then do what we can to help motivate you to achieve those goals. 

For details regarding credit repair please call us at 305-762-1818

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Can You Build Credit with a Debit Card?

A Debit Card Cannot Help You Build Credit

Purchases made with a debit card do not help you build credit. When you use a debit card, the funds are automatically taken directly from your checking account, so it is essentially a cash purchase.

Banks do not report debit card accounts to Experian, Equifax, TransUnion, or the other credit reporting agencies.

How to Begin Building Credit

In order to build a strong credit history, you will need to demonstrate your ability to manage credit wisely. If you are just starting to establish credit and do not yet have any credit accounts, here are a few ways you can begin:

  • Apply for and open a credit card account. 
  • Consider opening a secured credit card. Most banks report secured cards to the credit reporting agencies, so you may be able to use the account to begin building credit right away.
  • Ask a family member to add you to their account as a joint account holder or an authorized user. 

To take the first steps to credit repair, please contact Roxana at 161 NE 97th Street, Miami Shores, Fl or call 305.762.1818

Source: Experian

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What Is the Highest Credit Score Possible?

The highest credit score possible depends on the credit scoring system being used. There are many different scoring systems available, and the range, or scale, can vary from one system to another. For example, some credit scoring systems may have a scale that goes up to 850, while others might go up to 900 or 950.

Try Not to Focus on Achieving a Perfect Score

It will be difficult, if not impossible, to get a perfect score because there is always some risk associated with repaying the debt as agreed, such as getting sick or having an unforeseen accident.

Credit scores reflect the information in your credit report. To get good scores, you must take care of your credit report. Instead of focusing on the number, work to maintain a good credit history. You will probably never get a perfect credit score, but that shouldn’t be your goal.

Instead, your goal should be to make your credit report as strong as possible. Doing so will ensure that all of your credit scores will qualify you for the best rates and terms offered by any lender.

For more detailed information about your Credit score and Credit repair please speak to our tax specialist by calling 305-762-1818.

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Identity theft and Credit repair

Recovering from identity theft is rarely an easy task. Victims reported in 2004 that after dealing with creditors, collectors, the credit bureaus, and law enforcement agencies, resolving the problems associated with identity theft took an average of 330 hours of work.

One of the more frustrating aspects of recovering from identity theft is often times the process of disputing the identity theft related items on your credit reports. La Familia Multiservices makes this process easier by helping you dispute these questionable negative items while you focus your attention on taking care of other matters…

For more detailed information about your identity theft and credit repair please speak to our tax specialists by calling 305-762-1818.