When you see terms like “We remove negative items off your credit report in 30 days,” it’s usually not true. Or terms like,” Increase Your Credit Score by 150 points in 30 days. A credit repair company cannot make guarantees like that because everyone’s credit profile is different. Suppose someone has bankruptcies and foreclosures then it would not be right for someone to tell them that they can make those changes. Sometimes removing negative items off your credit can hurt it, depending on what other accounts you have on your credit report that’s in good standing.
There are certain percentage factors that make up your score. 35% of your credit score is calculated by a person’s history of making their payments on time. 30% of your overall score is calculated by how much you spend every month versus how much is allowed. In other words, say that you have a Macy’s card, with a $1000.00 limit. And say that you have 2 other credit cards with a $1000.00 limit a piece on them. Then you have a line of credit for the month totaling $3,000.00. Let’s say that every month out of that $3000.00 line of credit, you usually spend about $2,900.00 of it. Then that means that you are almost maxing your cards out and spending over 90% of your available credit. The 3 credit bureaus say that in order to raise your credit score, you need to use about 16-29 percent of your limit allowed. So out of that $3000.00 credit limit, you should be spending about $500-$900 of it to have a great credit score. Most lenders look at things like this: “If you are maxing out on small amounts then you probably couldn’t handle large amounts.
15% of your credit score is calculated by how long you’ve had these accounts open.(The longer the better.) 10% of your credit score is rated by how often someone applies for new credit. Applying for too many things within a short period of time can also bring down your score. When you go and apply for loans etc. and they ask you for your social security number and run your credit, then this results in a credit inquiry on your credit report. Inquiries usually stay on your credit report up to 2 years.
The reason that I say sometimes “Removing negative items may hurt your credit score is because: let’s say that you have 8 accounts in bad standings. But these accounts were opened up from 2010 to 2012. Let’s say that you have 1 loan that you paid off in 2008 and it’s in good standing. If you hire me and I remove those 8 negative items off your credit report, then those negative items account closes and then they erase off. Then your credit score wouldn’t increase because once those items are erased, then the credit bureaus have no recent credit history of knowing how you’ve been paying your bills lately to determine anything. So depending on how many other accounts you have in good standing, once those other accounts get erased is the determining factor in improving your credit score or it actually staying the same.
Nationwide Credit Consultants, 4990 River Overlook Way, Lithonia GA 30038. Telephone:( 678) 507 9921.