How Do I Give Free Consultations?

It’s simple guys. I use the affiliates on this website to help me pay my bills. That’s why the bigger my website gets, the more time I will have to give free consultations. Considering the credit industry being such a competitive industry, the only way to gain attention from people that really need the help is to give it to them for free.

I eventually want to start a non-profit organization that will not only offer free dispute services, but also regular credit consultations. I believe having a healthy credit report nowadays is almost as important as your own health (less stress). I understand there are “free credit counseling” services available, but after making phone calls of my own I feel the service and knowledge of credit is subpar.

I stand behind 100% of all the products and services promoted on this website. I would never recommend a horrible product or service if I wasn’t certain it worked and was useful. I’ve included enough information on this website to help you determine if these products are for you or not. Please send me an email to feedback@1on1credit.com with any comments you may have regarding any products I’ve promoted. Companies change over time just as people do and I want to know if something didn’t work out for you.

Thanks for the support! Remember, I reply to all comments and emails so feel free to send over a question and I’ll include my answer in a new blog post.

Why Does Each Credit Bureau Have A Different Score?

The answer to this question is so simple I can answer it with three words; algorithms, range, and information. It is normal to have a 5-15 point discrepancy from one credit bureau to another.

Each credit bureau has a specific proprietary algorithm they use to determine your credit score. Since each algorithm is specific and proprietary to each credit bureau, it is safe to say only a handful of people actually know the exact ingredients and properties making up your credit score. I am not one of these people, however FICO does something interesting to help everyone out. They developed their own specific scoring model they use and plug in information from the credit bureaus to give you your FICO score. Most creditors will use the FICO scoring model when you apply for credit.

The score range from each credit bureaus is different and specific. FICO scores range from 300-850. Depending on where you purchase your credit score, you may end up getting a different scoring model. The Vantage scoring model ranges from 501 – 990, but is rarely used. You will find most consumer credit reports range from 348-852.

The information each credit bureau holds on you may be different. If you auto loan with your local bank only reports to TransUnion, then it will not show up on Equifax or Experian. Creditors must register with the credit bureaus and pay subscription fees to report information on consumers. The amount of information on each credit bureau including trade lines, public records, inquiries, etc..may differ. Also, the time the information is updated with the bureaus may vary causing your reports to not be fully updated with all three credit bureaus. This will cause your score to range between the bureaus and can sometime be very dramatic.

What Are Inquiries And How Do They Affect My Score?

What is an inquiry?

An inquiry on your credit report means a creditor has accessed or reviewed your credit report. This will usually occur anytime you apply for most types of credit (secured credit lines may not always report an inquiry). Credit bureaus hold on to inquiries on your credit report for two years, it helps creditors make decisions on whether or not to extend you credit. Too many inquiries in a short period of time can cause creditors to raise red flags or deny your credit.

There are two types of inquiries; soft inquiries, and hard inquiries. Soft inquiries do not affect your credit score and are usually the result of checking your own credit or from a creditor or employer checking your credit for promotional or hiring purposes. Theres a reason you get letters in the mail saying you’re “pre-approved” for something. Hard inquiries on the other hand do affect your credit score in a negative fashion. A hard inquiry means you have attempted to obtain credit or extend your current trade lines. The credit reports that creditors see only show hard inquiries, while your typical consumer credit report shows both.

How Much Do Hard Inquiries Affect My Credit Score?

Hard inquiries do not have a devastating effect on your credit score. After one year, inquiries will no longer hurt your credit score even though they remain on there for up to two years. Too many inquiries within a year can bring your score down by around 2 to 20 points, which isn’t very significant on a scale from 300-850 (FICO Score). If you are applying for too much credit in a short period of time it can cause creditors to deny you credit. If you are applying for an auto loan, you can inquire with as many creditors as you like within a 30 day period and they will de-dupe and only count as one inquiry. The same is true when applying for a mortgage, however you have an additional 15 days.

How Long Do Items Stay On Your Credit Report?

After a specific period of time, certain derogatory items will fall of your credit report. Take note that the longer a negative item stay on your credit report the less and less it affects your score. Below I’ve included a list of how long the credit bureaus can hold on to specific items. Even though they are supposed to fall off after a specific time-frame, it doesn’t always happen. You may still need to dispute these items with the credit bureaus.

*Your State’s statute of limitations do NOT apply to your credit report.

Inquiries: 2 years
Collections: 7 years
Charge-Offs: 7 years
Late Payments: 7 years
Chapter 13 Bankruptcy: 7 years
Chapter 7 Bankruptcy: 10 years
Judgments: 7-10 years
Tax Liens: Forever if unpaid

Does Having A Good Credit Score Mean I Can Finance Anything?

No. Having a good credit score is important to obtaining financing, however a score alone will not determine your credit worthiness. There are other factors that will go into determining whether or not you get a loan.

Some factors considered in underwriting are:

Your employment length and income.
Your high credit to debt ratio.
Your debt to income ratio.
The length of your credit history.
Unique underwriting policies

These factors help determine whether or not you are likely to be able to pay back a loan. This process is done by an underwriter, but not all underwriters are human. Everyday more and more underwriters’ jobs are being replaced by computers.

What is a Good Credit Score?

There are numerous credit scoring algorithms that credit bureaus use. Some can range from 250-950, while others range from 300-850. A credit score represents one’s credit risk rating. The higher the score, the lower risk you are.

According to FICO, over 99% of all financial institutions world-wide use the Fair Isaac Corporation scoring model, better known as your FICO score. The FICO score ranges from 300-850. Both “FICO” and “300-850″ are trademarks of the Fair Isaac Corporation.

As of today, a “good” credit score would be considered a 680+. With this high of a credit score you are eligible for lower interest rates than most Americans. A 740+ would be considered a “great” credit score. This is typically where you want to be for consideration of all those ‘Zero APR for 36 months and No Down-Payment on Approved Credit’ promotions.

Getting your credit score over a 740+ will only help you defend against future credit report blemishes. One important thing to consider is that the higher your score is, the easier it is to destroy it.

If your credit score is at 600 and you make a 30 day late payment on a mortgage it may drop your score by a couple dozen points, but if you make the same late payment and your credit score is at a 850 you can expect it to drop at least twice as much. The taller your score is, the harder it falls.

Even though 680+ is considered “good” credit, you can still get financing at a lower credit score. Most retail credit cards require a 620+ score, while major bank credit cards usually require at least a 640+. You can get a mortgage with a 620, and you can get an auto loan with a horrible credit score…but be prepared for immensely high interest rates since the banks are taking a big risk on you. It’s almost as if they are paying roulette with your money. They expect a higher payout if they make riskier lending.