Learn how our Credit Repair Service Program work, and discover why Grady Financial Solutions LLC should be your one-stop shop for building and strengthening your personal finances!

Learn More About Our Credit Management Program!

What is Credit Repair and how does it work?

Credit Repair, in lamen terms, is taking your credit report from looking really bad to looking extremely good, and taking your credit score from being very low to being much higher. In other words, when you repair your credit you are doing 2 things. You are "freshening-up" your credit report so that the data on your credit report reflects positive accounts with good payment history. When your credit report reflects these positive accounts with good payment history, this in turn has a very positive effect on your credit score, meaning your score will show an increase. Typically, credit repair works by perfoming the following tasks: - reviewing your credit report for inaccurate information that was reported by a creditor to the credit reporting agencies:
- mispelling of legal name or reporting incorrect name
- mispelling of address or reporting of incorrect address number and zip code
- reporting incorrect date of birth and phone numbers
- reporting incorrect data on accounts such as wrong account number, account name, balance amounts, payment amounts, payment dates
- reporting old accounts that have reached their statute of limitations (7 years)
- reporting old hard inquiries that have reached their statute of limitations (2 years)
- reporting accounts that do not belong to you (which can be a sign of identity theft)
- reporting accounts that you did not authorize or consent to opening (creditor reporting misleading information) - draft a letter to the credit bureaus requesting an investigation for removal of inaccurate information on your credit report - follow-up with credit bureaus within 30-45 days to confirm that an investigation has been completed and inaccurate information is removed from credit report - work with current (active) creditors listed on credit report to improve account status (making on-time payments, pay down account balance) - work with creditors who may have charged-off accounts via a settlement agreement to improve the account status being reported or remove the account completely upon full payment of an old delinquent/deragatory account - freezing credit report to prevent the risk of unauthorized credit inquries or mitigate the chances of freely applying for new credit - for consumners with absolutely no credit scores or history, establish credit via a secured credit card and practice healthy spending and payment habits to boost credit score and sharpen credit history report

Why is Credit Repair Important?

To understand why credit repair is important, we must first understand what is credit and why credit is important. The term "credit" refers to the trust which allows one party (creditor) to provide money or resources to another party (debtor) under the condition that the second party will repay or reimburse the first party at a later agreed upon date. Therefore, your credit is your borrowing reputation that will let a lender know how likely you will reimburse the money or resources given to you back to them within a specific timeframe. Credit is important because it allows for you to have strong flexible spending power so that you can acquire expensive large purchases at an affordable rate and on terms that works best for your current budget and finances. Credit also paints a picture to a creditor, lender, employer, landlord, insurance companies, etc. on how responsible you are financially and your level of risk when it comes to paying back debt. So your credit plays many factors in your ability to get hired for a job that deals with sensitive information, get approved for an apartment lease or mortgage loan, and approval rates for health, home, auto, and life insurance. So if you have a pretty bad credit report that shows heavy late payment history and delinquent accounts, this in turn will have a negative effect by lowering your credit score and therefore deeming you too high of a risk to be approved for any type of financing services. Situations like this is where credit repair will prove beneficial in fixing your financial situation for the better.

Do I have a right to know what's in my credit report?

ABSOLUTELY! By law, the agencies must give you a free report annually. However those free reports do not contain scores. For credit repair scores we recommend an inexpensive credit monitoring service so that you can monitor both your credit report and credit scores from all three major reporting credit bureaus on a monthly basis.

What is a credit score?

A credit score is a number generated by a mathematical formula that is meant to predict credit worthiness. Credit scores range from 300-850. The higher your score is, the more likely you are to get approved for a loan or line of credit. The lower your score is, the less likely you are to get approved for a loan or line of credit. If you have a low credit score and you do manage to get approved for credit then your interest rate will be much higher than someone who had a good credit score and borrowed money. So, basically, having a high credit score can save thousands of dollars over the life of your mortgage, auto loan, or credit card.

What do you mean by credit score range?

800 and Higher (Excellent)

  • With a credit score in this range no lender will ever disapprove your loan application.
  • Additionally, the APR (Annual Percentage Rate) on your credit cards will be the lowest possible.
  • Achieving this excellent credit rating not only requires financial knowledge and discipline and, but also a good credit history.
  • Generally speaking, to achieve this excellent rating you must also use a substantial amount of credit on an ongoing monthly basis and always repay it ahead of time.
700 – 799 (Very Good)
  • 27% of the United States population belongs to this credit score range.
  • With this credit score range you will enjoy good rates and approved for nearly any type of credit loan or personal loan, whether unsecured or secured.
680 – 699 (Good)
  • This range is the average credit score.
  • In this range approvals are practically guaranteed but the interest rates might be marginally higher.
  • If you’re thinking about a long term loan such as a mortgage, try working to increase your credit score higher than 720 and you will be rewarded for your efforts – your long term savings will be noticeable.
620 -679 (OK or Fair)
  • Depending on what kind of loan or credit you are applying for and your credit history, you might find that the rates you are quoted aren’t best.
  • That doesn’t mean that you won’t be approved but, certain restrictions will apply to the loan’s terms.
580 – 619 (Poor)
  • With a poor credit rating you can still get an unsecured personal loan and even a mortgage, but, the terms and interest rates won’t be very appealing.
  • You’ll be required to pay more over a longer period of time because of the high interest rates.
500 – 579 (Bad)
  • With a score in this range you can get a loan but nothing even close to what you expect it to be.
  • Some people with bad credit apply for loans to consolidate debt in search for a fresh start.
  • However, if you decide to do that then proceed cautiously.
  • With a 500 credit score you need to make sure that you don’t default on payments or you’ll be making your situation worse and might head towards bankruptcy, which is not what you want.
499 and Lower (Very Bad)
  • If this is your score range you need serious and professional assistance with how you handle your credit.
  • You’re making too many credit blunders and they will only get worse if you don’t take positive action.
  • If you are thinking of a loan then keep in mind that if you do find a sub-prime lender (which won’t be easy), the rates will be very high and the terms will be very strict.
  • We recommend that you fix your credit and only then move on to applying for a loan.

What data is used to determine my credit score?

35% - Payment History 30% - Debt Ratio 15% - Length of Credit History 10% - Types of Credit 10% - Number of Credit Inquiries The percentages in this chart show how important each of the categories is in determining your credit score. We will help you to remove negative items from your payment history. We will also show you how to maximize your debt ratio score, even if paying off credit cards is not an option.

What type of information do credit bureaus collect and sell?

Credit bureaus collect and sell four basic types of information:

  • Identification and employment information
    • Your name, birth date, Social Security number, employer, and spouse’s name are routinely recorded in your credit report. They may also provide information about your employment history, home ownership, income, and previous address, if a creditor requests this type of information.
  • Public record information
    • Events that are a matter of public record, such as bankruptcies, foreclosures, or tax liens, may appear in your report.
  • Inquiries
    • CRAs must maintain a record of all creditors who have asked for your credit history within the past year. It is generally beneficial to keep the number of inquires as low as possible.
  • Payment history
    • Your accounts with different creditors are listed, along with the balances, high balances, and outstanding balances. Related events, such as referral of an overdue account to a collection agency, charge off accounts or other delinquencies may also be noted.

How does a credit bureau determine my score?

Credit scoring models are complex and often vary among creditors and for different types of credit. If one factor changes, your score may change — but improvement generally depends on how that factor relates to other factors considered by the model. Scoring models generally evaluate the following types of information in your credit report: Do you pay your bills on time? Payment history is a major factor in credit scoring. If you have paid bills late, have collections, or declared bankruptcy, these events will not reflect well in your credit score. Do you have a long credit history? Generally speaking, the longer your history of holding accounts is, the more trusted you will be as a borrower. Have you applied for credit recently? If you have many recent inquires this can be construed as being negative by the credit reporting agencies. Only apply for credit when you really want it. What is your outstanding debt? It is important that you are not using all of your available credit. If all of your credit cards are maxed out, your scores will reflect that you are not managing your debt wisely.

What is the secret to a high credit score?

  1. Always pay your bills on time!
  2. Don’t close old accounts!
  3. Don’t apply for any new credit!
  4. Don’t ever use more than 30% of your available credit on each credit card!

What happens if I am denied credit, or don't get the terms I want?

If you are denied credit, the Equal Credit Opportunity Act requires that the creditor give you a notice that tells you the specific reasons your application was rejected or the fact that you have the right to learn the reasons if you ask within 60 days. Indefinite and vague reasons for denial are illegal, so ask the creditor to be specific.

  • Acceptable reasons include:
    • “Your income was low” or “You haven’t been employed long enough.”
  • Unacceptable reasons include:
    • “You didn’t meet our minimum standards” or “You didn’t receive enough points on our credit scoring system.”
If a creditor says you were denied credit because you are too near your credit limits on your charge cards or you have too many credit card accounts, you may want to reapply after paying down your balances or closing some accounts. Credit scoring systems consider updated information and change over time. If you’ve been denied credit, or didn’t get the rate or credit terms you want, ask the creditor if a credit scoring system was used. If so, ask what characteristics or factors were used in that system, and the best ways to improve your application. If you get credit, ask the creditor whether you are getting the best rate and terms available and, if not, why. If you are not offered the best rate available because of inaccuracies in your credit report, be sure to dispute the inaccurate information in your credit report.

How can I get started in increasing my credit score?

Following these 7 steps will increase your credit score in a short and timely manner! We will assist you with all of these steps!

  • Order fresh new copies of your credit reports from all 3 bureaus: Equifax, Experian and TransUnion.
  • Correct all inaccuracies on your Credit Reports
  • If you have any negative marks on your credit report, negotiate with the creditor or lender to remove it.
  • Pay all credit cards and any revolving credit down to below 30% of the available credit line.
  • Do not close your old credit card accounts.
  • Avoid applying for new credit.
  • Have at least three revolving credit lines and one active (or paid) installment loan listed on your Credit Report.
THROUGHOUT THIS PROCESS, ALWAYS REMEMBER: It takes up to 30 Days for any of these items to get reported and often longer to reflect on your Credit History Reports. Very often we must write a series of letters challenging the credit bureaus. Each time we must allow them 30 days to respond. It can feel like a slow process, but hang in there, because it does work and the end result will save you a tremendous amount of money.