Here’s How to Clean Up Your Credit Report

If you’ve made some credit mistakes in the past, they may still be reflected on your credit report. The benefits of having a high credit score are many. But if you have some marks on your credit report, it’s likely that is what’s keeping your score from rising.

However, it won’t be an overnight process. It can take anywhere from one to six months to clean up your credit report, depending on how many disputes you need to make.

Examine Everything Closely

Completely scour your credit report to identify if there are any errors in it. You can pull a copy of your credit report for free once a year through the official AnnualCreditReport.com website. Federal law allows you to initiate a dispute with the credit bureau that’s reporting information you believe to be inaccurate. The credit bureau then has to investigate your claim and if there is an error, correct it or remove it.

Review Your Identity

This may seem like common sense, but it’s very easy to overlook. Make sure your name, address and Social Security number are correct on the report. Having an incorrect Social Security number on your credit report can lead to dire consequences.

Document, Document, Document

If you need to file a dispute, document it for your personal records. Keep any supporting documents pertaining to your dispute in a safe place, and then continue to follow up on the dispute until it is resolved. Also keep notes with dates, times and the people you spoke with at credit bureaus and lending businesses. Check your credit report again about a month later to make sure the people with whom you spoke followed through on what they said they would do.

Attempt to Remove Past-Due Accounts

If you have a past-due item on your report, try to get the creditor to remove it by asking for a goodwill removal. You can write a goodwill letter asking for a removal of a paid-up debt that at one point had a late payment. However, the creditor is under no obligation to forgive past-due payments, but some may if you’ve continued to be a customer in good standing.

As previously stated, repairing your credit report is not a fast process, but it’s worth it to take the time and make the effort to clean it up. Raising your credit score can make you more attractive to lenders and could lead to more favorable rates and offers.

Financially Fit is your home fitness guide for all things financial, provided by RCB Bank. Find money-building tips, insights and inspiration to help you improve your financial well-being at RCBbank.com/GetFit. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. With approved credit. Some restrictions apply. RCB Bank, Member FDIC.

Source:

https://www.ftc.gov/business-guidance/privacy-security/credit-reporting

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Looking to Build or Improve Your Credit Score? Try These Tips

Looking to Build or Improve Your Credit Score? Try These Tips

Your credit score plays a significant part in your financial well-being. Generally, the higher the score, the easier it is to get approved for loans or lines of credit, and you also can benefit from lower interest rates.

But a low score can make it difficult to secure credit, and the interest rates can be much higher. In essence, a credit score allows lenders to gauge how reliable you are at paying your bills. So if you don’t have a credit history, it can be harder for lenders to determine the level of risk.

A person with a higher credit score can save thousands of dollars over the course of their life than someone with a low score.

So what steps can you take if your credit is poor, or if you have no credit history? Read along and find out.

Review Your Credit Report

First things first: you need to figure out what your history shows, so you can find out if anything requires immediate attention. You can pull a copy of your credit report for free once a year through the official AnnualCreditReport.com website. Review your report to make sure everything is correct, and have any inaccurate listings removed. Federal law allows you to initiate a dispute with the credit bureau that’s reporting information you believe to be inaccurate. The credit bureau then has to investigate your claim and if there is an error, correct it or remove it.

Pay Down Your Debts

According to the Fair Issac Corporation (FICO), payment history has the biggest impact on your credit score. So avoid late payments at ALL costs. One way to avoid late payments is to set up automatic payments. Also, the more available credit you have, the higher your credit score will be. This is known as your credit utilization percentage, which refers to the portion of your credit limit that you’re using at any given time. This is the second-highest determining factor in your credit score. A good rule of thumb is to keep it under 30% of your credit limit. Once you get there, work at getting it under 10%, which is considered ideal to maximizing your credit score.

Ask for a Limit Increase

If you have credit cards, ask for a credit limit increase. If granted, this will lower your credit utilization percentage, which, as explained above, should help raise your credit score. But this is only helpful as long as you don’t use that limit increase to purchase more items.

Take Out a Personal Loan

If you’ve been using credit cards for a while and making timely payments, you should have enough credit history to qualify for a personal loan. However, this isn’t a quick fix. Personal loans can take up to a year to raise your credit score. But, it can diversify the types of credit on your credit report, and you can use your loan to prove you can consistently make payments on time.

Limit Hard Inquiries

Hard inquiries can affect your credit score for anywhere from a few months to two years, according to Experian. Hard inquiries include things like applications for a new credit card, an auto loan, a mortgage and other forms of credit. The occasional hard inquiry won’t have much of an effect. But many of them in a short period of time can damage your credit score. So if you are trying to improve your credit score, avoid applying for multiple new lines of credit for awhile.

If You Rent, Make it Count

If you pay rent monthly, there are several services that allow you to get credit for those on-time payments. Search the internet for companies that will report your rent payments to the credit bureaus on your behalf, which in turn could help your credit score. Note that reporting rent payments may only affect your VantageScore credit scores, not your FICO score. Some rent-reporting companies charge a fee for this service, so read the details to know what you’re getting and possibly purchasing.

The bottom line is start now. It can take several weeks, and sometimes several months, to see a noticeable impact on your score when you start taking steps to turn it around. Improving your credit score is a good goal to have, especially if you’re planning to either apply for a loan to make a major purchase, such as a new car or home, so the sooner you start, the better you’ll be able to take advantage of the benefits of a good credit score.

Financially Fit is your home fitness guide for all things financial, provided by RCB Bank. Find money-building tips, insights and inspiration to help you improve your financial well-being at RCBbank.com/GetFit. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. With approved credit. Some restrictions apply. RCB Bank, Member FDIC.

 

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https://www.ficoscore.com/about/

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Upgrade your life: Tips to get ahead financially

Lady holding bag of money and debt

I challenge you not to accept your financial life as it is. This coming year, aim to get ahead — start an emergency fund, build your retirement savings, pay off your debt or take control of whatever money situation is causing you stress.

The key to getting ahead is to get started. Here are some tips to help you make a financial change.

Invest in you

To build your wealth, start paying yourself first. When you receive money, before you spend a penny, put some of it in your savings account or retirement fund. Set up automatic deposits and watch your savings grow with little effort.

Changing your saving habits may require changing your spending habit, but the payoff – not worrying about paying your bills, taking a trip you’ve been dreaming of and retiring on your terms – is worth it.

Stop throwing money away

Paying late fees is like pulling money out of your wallet and throwing it into the wind. Start paying down debt, beginning with the highest interest debt. Pay your bills on time. If need be, call the company and see if you can adjust your due date. Never hurts to ask and it could save you from paying late fees.

Try the 50/30/20 budget plan

Harvard bankruptcy expert Elizabeth Warren suggests splitting your monthly income into three categories:

  1. Fixed expenses – survival needs – should total no more than 50 percent of your income.
  2. Non-essentials – wants like TV, morning coffee, hair appointments – should total no more than 30 percent.
  3. Savings – emergency fund, retirement – should be 20 percent or more.

Match your spending

Have a hard time sticking to a budget? Try this. Before you spend money on something you want, first put the same amount of money in a savings jar.  You will be able to see exactly how much money you are spending, or how much you could be saving or using to pay off your debt. If you cannot afford to match your spending, you cannot afford whatever it is you want to purchase.

Live within your means

Rich people stay rich by living like they are broke. It is a matter of what you value more, instant gratification or freedom from debt and having money when you really need it.

You work hard for your money. Do not waste it on things you do not really need.

50/30/20 Plan: Elizabeth Warren and Amelia Warren Tyagi. All Your Worth: The Ultimate Lifetime Money Plan. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. RCB Bank, member FDIC.
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Best Financial Advice

Get$Fit Tip: Sweat the small stuff.

Wise Monday Advice

There is a saying that wisdom comes from listening to advice, so I asked bankers to share the best money advice they have received and the impact it has made in their lives.

No. 1: Pay attention to your small expenses.

“Spend more time thinking about $20 decisions rather than $20,000 decisions,” shares Gregg Conklin, RCB Bank lender. “You’ll make $5, $10, $20 decisions daily. These add up. Learn to be wise in how you spend and save $20, so as you build wealth, you’ll be wise in how you spend and save $20,000.”

“I received this advice from a man who immigrated to the U.S. from Holland in the 1950s,” Conklin says. “He left Holland with $20 in his pocket and taught himself English by watching Saturday matinees. He eventually owned thousands of acres of ranch land, raising cattle in Kansas.”

No. 2: Invest in your future.

“Pay your obligations first, invest in your future second, indulge in non-essentials last,” shares Emily Dake, RCB Bank loan document specialist. “My grandparents taught me to see money as a tool that could guarantee future comfort. If I buy something, I want to walk away having gained something permanent such as knowledge, an experience or an asset.”

No. 3: Build an emergency fund.

“Build up a savings to cover at least three months worth of bills,” says Jessica Hamman, RCB Bank eServices. “After having ER surgery, I was without a paycheck. No savings and no paycheck can quickly put you behind on bills. It took three times as long to get caught up as it did to get behind.”

No. 4: Learn Rule 72.

Rule 72 will help you better understand the power of compounding interest over time,” shares Brad Ward, RCB Bank lender. “Take the number 72 and divide it by the annual rate of interest that your money is earning to determine the number of years it will take for your money to roughly double.”

No. 5: Pay yourself like a bill.

“Put money into a savings account directly from your paycheck so you don’t have time to spend it,” says Kim Harrison, RCB Bank loan assistant. “Since I started doing this I have been able to steadily save, and I was able to use part of it to buy my first house this year.”

No: 6: Start young.

“Early in my career, I was told about the value of saving now for retirement later,” says Jenna Louderback, vice president, eServices. “Putting that advice to work at a young age has paid off as I have watched my investments grow immensely over the years. Starting as early as possible has put me ahead of the game for my retirement plans.”

Invest in yourself. RCBbank.com/GetFit
You’re future self will thank you.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB, RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151.
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Your financial footprint leaves a trace

Feet with scale showing FICO score

By Jocelyn Wood, RCB Bank

Do you know your credit score? A good score matters if you want to want to qualify for lower loan interest rates. It may also improve your chances for lower fees on insurance premiums, like home and auto for example.

It’s important to understand a credit report and a credit score are two different things.

Your credit report is a compilation of credit-related information.

  • Identifying information like name, address, birthdate, Social Security Number.
  • Credit accounts, payment history, current and past loans, etc.
  • Credit inquiries – who has accessed your report within the last couple years.
  • Public records & collections – overdue debt from collection agencies, wage garnishment, liens, foreclosures, etc.

The information in your report provides a story of how well you manage your credit and debt and influences a lender’s decision to loan you money?

Your credit score is a matrix of your credit report – a 3-digit number, ranging from 300-850.

FICO® Scores are most widely used.

I asked Lender Jake Dwyer, AVP at RCB Bank, what is the easiest way to maintain a good financial footprint?

“The biggest influence on your credit score is payment history,” Dwyer said. “A record of ongoing, on-time payments will help your credit. Basically, pay your bills on time and keep your credit card balances low.”

Your credit score is generally calculated based on five factors, revealed in your credit report:

  • Payment history
  • Amounts owed on credit and debt
  • Length of credit history
  • New credit
  • Types of credit used

“Lenders want to know you can afford to make your monthly payments,” Dwyer said. “Owing too much debt, carrying high balances on your credit cards and having too many credit accounts opened at one time are high risk factors. We want to see a long history of you responsibly managing a variety of credit, like student loan, credit card and mortgage.”

He also mentioned your credit score reflects your risk at the time it was pulled. It can change depending on your credit behavior.

“The best way to repair your credit is to pay off your debts,” said Dwyer. “Pay your credit card bill in full each month. Don’t spend what you can’t pay. Lenders want to see responsible money management and self-control.”

The first step to improving your credit is to know what is in your credit report.

Request a copy of your credit report at annualcreditreport.com. Federal law allows you one free report annually from each credit reporting agency: Equifax, Experian and TransUnion.

Ask your lender for tips on how to improve your score, or give Jake Dwyer a call at 918.259.1342.

Source: Fair Isaac Corporation (FICO), myfico.com. FICO® Score does not factor in income, length of employment, alimony or child support payment and other things that lenders may consider when determining loan qualification. Having little payment history or only new credit can result in a lower FICO® Score. It is not always from missed payments or maxed-out credit cards. Talk to your lender for details. Learn more about FICO® Score at myfico.com
Opinions expressed above are the personal opinions of Jake Dwyer, AVP, Loans, NMLS #1413664, and meant for generic illustration purposes only. RCB Bank NMLS #798151. Member FDIC and Equal Housing Lender.
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