Credit Education

Below you will find answers to Frequently Asked Questions. If you do not see what you are looking for, please Contact us for furhter details.

Frequently Asked Questions

1What is credit?
Credit is the amount of money you borrow in the form of a loan, mortgage or credit card. The money borrowed by an individual or a company should be paid back to the lender by a fixed time in the future. You generally need to provide evidence of the ability to repay and a good credit history. If you’ve a good credit history, you can get loans at a lower interest rates.
2What is credit repair?
Credit repair is the process of clearing all negative information from your credit report. It can can be about the removal of incorrect information about your identity or details about your credit information. Repairing your credit will also help improving your credit score.
3Why do I need to repair my credit?
Your credit report is used by the creditors to determine if they can provide credit to you in the future. A bad credit history and invalid account information are a hindrance for any kind of credit requirement in the future. Negative information or bad credit history can lead lenders to turn down your loan request or you might have to pay unnecessarily high interest rates. High credit score, of course, helps you in getting credit easily and at a much lower interest rate.
4How do I get my credit report?
For best use a paid credit monitoring service to get your credit report. Please stay away from free credit monitoring services since they are not update or report accurately. we have our clients use: privacyguard.com.
5Who are credit bureaus?
There are three main credit bureaus mentioned above. These bureaus are not federal, but are profit oriented companies. These companies earn by collecting personal, professional and credit related information about you and providing these to others in return of some fees.
6What is credit score or FICO score?
A credit score is mostly used by the creditor to assess the payments and credit history of a consumer. It’s a number derived from a mathematical formula, which depends on the information mentioned in the credit report. A credit score completely helps to determine if a creditor can extend credit to a consumer. The credit score is completely based on the person’s past credit history. The higher the credit score, the more creditworthy a person shall be.
7How is credit score evaluated?
Credit score depends on your payments history, it may be late payments, collections and charge-offs. If your score is 500 or less, it’s generally said as a bad credit score; if it’s between 500-600, it can be stated as poor credit score; if your score is 600-650, it’s stated as a fair credit score.However, if your score is 650-700, it can said as a good credit score and credit score that’s more than 700 is considered as an excellent credit score.
8How does credit score affect me?
It’s your score that determines if you’ll get credit from the creditors anytime in the future. If your credit score is low or not upto the mark, you might be turned down for loan, or you can also be charged unnecessarily high interest rates.
9Will a bad credit score affect my job search?
Recession has affected Americans financial conditions badly. The result is clearly visible in the job market, which has become very competitive. Those who get a call and go through interviews might perform well, but if the background check isn’t clear, they might just lose the job. Most of the companies check the credit report of the potential applicants. If they find a history of late payments, charge - offs and collections, they think about the traits of the applicant. The applicant might not meet deadlines or be on time, or even forget to do assigned tasks. They might just think that the applicant can’t manage the responsibility of the position assigned.
10Will paying off my bills help in repairing my credit?
By paying off an old debt, you will not be able to eliminate the damage already made in the payment history. The negative impacts have already been made in the credit report.
11How can credit score be repaired legally?
There are certain procedures that credit bureaus need to follow to show accurate information on the credit report. Many times the credit bureaus fail to do this. The company that provide information about you to the credit bureau must have proper documents to prove it. If you find any incorrect information in your credit report, you can ask the credit bureau to re-verify the information and rectify it. Under the Fair Credit Reporting Act and select state laws, you are protected by your right to dispute information.
12Why should I get help from a credit repair company?
A credit repair company can help you to increase your credit score. You might not have the time, knowledge, expertise and experience to deal with credit reporting agencies. You must know your consumer laws before starting to repair your credit. It’s easier if you hand over the task to a credit repair company.
13Will my credit score improve if I fix my credit report?
If you manage to remove negative items from your credit report, your credit score will most likely increase. You need to make all your payments on time to improve your credit score. It’s not a good idea to seek credit very frequently. Whenever you wish to seek credit, an “inquiry” is mentioned in your credit report. The lenders might feel you are having financial trouble if they see too many “inquiries”. Proper management of your financial life can retain you with a good credit score.

HOW MUCH DOES BAD CREDIT COST

The cost of credit repair is small compared to the cost of living with bad credit. Below are a few examples of the cost of bad credit.

Auto/Car Loan


If you are making vehicle payments, you are most likely paying between $4,000 and $10,000 more over the course of the loan just for having credit score issues. This added interest shows up every month in a higher payment. Example:

$23,000 Vehicle Financed for 5 Years
Credit Status
High Credit Score
Slightly Damaged
Damaged
Rate
3%
9%
18%
Payment
$413
$477
$584
Interest Paid
$1,796
$5,646
$12,042


Home Loan
Damaged credit on a vehicle is nothing compared to the effect of damaged credit on a home loan. A typical home can cost between $180,000 and $300,000 more in interest of the 30 year loan, if you are buying the home with damaged credit. Example:

$120,000 home paid over 30 years
Credit Status
High Credit Score
Slightly Damaged
Damaged
Rate
7%
9%
13%
Payment
$798
$966
$1,327
Interest Paid
$167,410
$227,596
$357,878


$190,000 home paid over 30 years
Credit Status
High Credit Score
Slightly Damaged
Damaged
Rate
7%
9%
13%
Payment
$1,264
$1,529
$2,102
Interest Paid
$265,066
$360,361
$566,640


This is just a Example of different interest rates Please Contact a LiveWell Credit Specialist for current interest rates and specials*


WHAT FACTORS MAKE YOUR CREDIT SCORE

35% PAYMENT HISTORY The largest factor is your basic payment history. This is the number of unpaid bills that you have, any bills sent to collection, bankruptcies, etc. The items that are most recent have the most impact.

30% OUTSTANDING DEBT Are your credit cards maxed out? High balances, or balances close to your credit limit can negatively affect your score. Keep balances below 35% of your credit limit.

15% LENGTH OF CREDIT HISTORY How long have your accounts been open? The longer the account has been open, the better.

10% RECENT INQUIRIES Every time you apply for credit of any kind, you create an inquiry on your credit report. Multiple inquiries negatively affect your score.

10% NEW CREDIT How many current loans you have and the value of these loans. Three major bureaus dominate the market for supplying American lenders with credit scores. When you apply for credit, it does not come directly from FICO; instead each bureau has its own version with its own name.