Credit 101 Part 6 – Filing a Complaint

October 5, 2015 by · Leave a Comment 

This is part 6 in a series of videos on basics of credit, which is Credit 101. What are my avenues of recourse? Where do I file a complaint? How do I challenge this information? Dispute to the credit bureaus and more is explained. This is something that should be taught in high school. A brief explanation of credit. Interview between Adam Villaneda and Cesar Marrufo. Elite Financial, LLC credit repair in Yucaipa, California. Learn how to fix your bad credit report and position yourself to purchase a home. I do NOT own rights to this music and am not claiming that I do.

10 reasons you can’t get credit

October 1, 2015 by · Leave a Comment 

10 reasons you can’t get credit

When an application is turned down, you should know why. Here are some of the common reasons, and what you should do next.

If you’ve never been rejected for credit, count yourself fortunate. Somewhere between 25% and 35% of credit card applications are typically approved, “depending upon the pricing value proposition and other factors,” according to Robert Hammer, the president of R.K. Hammer and Associates, a consultant to the card industry.

With some issuers, the approval rate may be a mere 10% or so.

If you’re not turned down for credit, you may be told instead that you didn’t qualify for the best rate. Either way, if a credit score (or credit-based insurance score) was used in the decision, you must be told the main factors that contributed to your score.

Deciphering those reasons can be maddening, though. “What do you mean, I have no recent revolving balances?” Or, “So it says my account balances are too high. What does ‘too high’ mean anyway?”

Here’s a guide to some of the main reasons you may be turned down — and what you can do about them.

Keep in mind that these are just some of the factors that may be used to evaluate your credit. Not all of them will apply in all situations, and there may be variations on these as well.


‘Proportion of balances to credit limits is too high on bank revolving or other revolving accounts’

What it means: The score likely looks at your total available credit limits and compares them with your outstanding balances, individually and in the aggregate. The greater the percentage of your available credit that you are using, the greater the impact on your scores.

What you can do about it: Focus on paying down balances that are close to the credit limits as quickly as possible. What about transferring a balance from a maxed-out card to one with a smaller balance? While that might help, it’s not likely, since you still have just as much debt as before (another factor).

‘Amount owed on accounts is too high’

What it means: This factor may look at your debt in comparison with that of other consumers, and if your debt is higher than optimal, it could show up as a reason why you weren’t approved.

What you can do about it: This one is particularly frustrating because you probably have no idea how much debt is too much, nor do you know which balances to try to pay down first. Typically, though, you’ll get the most bang for your buck, credit-wise, by focusing first on paying down your credit cards with balances that are closest to the limits.

‘Too many recent inquiries in the past 12 months’

What it means: This reason appears when your credit report indicates a high number of credit applications (inquiries) within the past year. But not all are counted the same. Checking your own credit reports doesn’t count; nor do promotional inquiries, inquiries from employer and insurance companies, and account reviews by your current creditors. The impact of inquiries on your credit will vary, depending on your overall credit profile, but the typical inquiry can be expected to affect your score by about five points.

What you can do about it: This reason is more likely to appear when you have a limited credit history or strong credit, simply because there are fewer other significant negative factors affecting your scores. But it doesn’t hurt to lay low for a while. Avoid opening new retail cards. While inquiries resulting from shopping for a mortgage, student loan or auto loan aren’t as likely to hurt your score as the same number of inquiries for credit cards, limit your applications to a short period of time, such as 14 days.

‘Level of delinquency on accounts’

What it means: Delinquency refers to payments that were late. The general rule of thumb is that the further you fall behind, the greater the impact on your credit scores.

What you can do about it: If the information is inaccurate, you can dispute it. If it’s correct, you’re going to have to live with it for a while; usually up to seven years. Focus on making your current payments on time. If cash is tight, remember that all you have to do is make the minimum payment on time to avoid a delinquency on your report.

‘Time since delinquency is too recent or unknown’

What it means: Recent late payments will have a greater impact on your score than older late payments. Typically, delinquencies within a year or two will hurt your scores the most. If an account was delinquent a while ago but the credit report doesn’t indicate the date, this factor can pop up as well.

What you can do about it: The good news is that as time passes, these delinquencies will carry less weight, especially when you are paying current bills on time. But the date is important here. If an inaccurate date (or no date) is reported for a charge-off or collection account, for example, make sure you dispute that with the credit-reporting agency.|

‘Serious delinquency, derogatory public record or collection filed’

What it means: This can mean that your credit report includes a bankruptcy, judgment, tax lien or collection account. Bankruptcy remains on your report 10 years from the date you file (seven years for a completed Chapter 13). Paid judgments can be reported for seven years, but unpaid judgments can stay even longer. Paid tax liens are removed seven years after being paid, but unpaid tax liens can remain on your report indefinitely. Collection accounts may be reported for seven years and 180 days from the date you first fell behind with the original creditor, leading up to the account being turned over to collections.

What you can do about it: If the information is accurate, this is also a matter of biding your time and making sure you have as many positive credit references currently reporting as possible. (A secured card may be an option if you can’t qualify for a regular credit card.) And while paying a collection, judgment or tax lien won’t likely change this factor in the short run, it could result in the public-record item being removed from your report sooner and protect you from being sued for a debt, which could result in additional judgments or collections on your credit reports. If dates are incorrectly reported or payments are not being reported — not uncommon with collection accounts — dispute them.

‘No recent revolving balances (or no recent bank card balances)’

What it means: This reason may appear when your credit report doesn’t include any revolving accounts (usually credit cards), or when all your credit cards closed or are no longer being reported. If you have open credit cards, it may also appear when there are no balances on those accounts.


What you can do about it: Don’t worry. This doesn’t mean you have to have debt to have good credit. As long as you use your cards from time to time, this shouldn’t be a problem. But if you are avoiding credit cards altogether, you’ll have a tough time getting a top credit score. Get a credit card and use it occasionally — even a secured card — pay it in full and on time, and you should be fine.

‘Lack of recent installment loan information’

What it means: Your mortgage was paid off years ago. You pay cash for your cars. You don’t have any outstanding student loans. Guess what? The fact that you’re ultra-responsible here doesn’t help your credit scores.

What you can do about it: The strongest credit scores go to those with a mix of different types of accounts. Does that mean you have to rush out and take out a loan? No. But next time you go to buy a car, you may want to find out if you qualify for 0% financing or a low-rate loan. Or you may want to see if you can get a low-rate personal loan to consolidate some higher-rate credit card debt. On the other hand, don’t go overboard. You don’t want to pay a lot in extra interest charges.

‘Too few accounts currently paid as agreed’

What it means: This reason appears when your credit report does not show enough accounts paid on time relative to the number of accounts with late payments. But if you haven’t been late with payments, this reason most likely means that you need more accounts reported on your file as “paid as agreed.”

What you can do about it: You may want to think about adding a current credit reference, or even a couple of them over time. If you’re having trouble getting approved for a credit card or personal loan, consider a secured card.

‘Too many consumer finance company accounts’

What it means: Consumer finance companies make relatively small personal loans, usually limited to a several thousand dollars, and quite often at interest rates higher than those on most credit cards. Consumers who rely heavily on consumer finance company accounts tend to be riskier to lenders than consumers without such accounts.

What you can do about it: Paying off these types of accounts will not improve your credit immediately, but it’s still a good idea to pay them off as soon as you can, since the interest rates are probably high. Next time you need to borrow, try first to get a standard personal loan through a social-lending website, for example, or from your bank or credit union.


By Gerri Detweiler,


Will a wage garnishment affect your credit score?

September 30, 2015 by · Leave a Comment 

Will a wage garnishment affect your credit score?

A wage garnishment, which results after a court order says a lender can obtain money a borrower owes by going through the borrower’s employer, won’t show up on your credit report and therefore, won’t impact your credit score.

“Garnishments do not have a direct impact on your credit scores because they are not picked up by the credit bureaus and placed on credit files,” John Ulzheimer, president of consumer education for, tells MainStreet.

An Experian spokesperson also confirmed with MainStreet that the credit bureau does not receive information about wage garnishments.

“Although garnishment proceedings are a matter of public court record, they are not reported on Equifax consumer credit files,” a spokesperson from Equifax also told MainStreet.

But that doesn’t mean it won’t send up a red flag to lenders that you can’t pay back your debts and shouldn’t qualify for a loan.

“Garnishments aren’t a secret to prospective lenders,” Ulzheimer says. “Applications for things like mortgages will usually ask for obligations and liabilities, and you’ll have to disclose the fact that your wages are being garnished.”

By Jeanine Skowronski

What determines your credit score?

September 29, 2015 by · 1 Comment 

FICO Scores are calculated from a wide variety of different credit data in your credit report. This data can be grouped into five categories as outlined below. The percentages reflect how important each of the categories is in determining your score. These percentages are based on the importance of the five categories for the general population. The importance of these categories may vary for particular groups – for example, people who have not been using credit long might find less importance on amounts owed and greater importance on payment history. Paying your bills on time and paying down account balances are the top two factors that can help or hurt your credit score regardless of who you are and what your credit situation is! Here’s a breakdown of how your credit score is calculated:

• 10 % Types of Credit Used
• 10% New Credit
• 15% Length of Credit History
• 30% Amounts Owed
• 35% Payment History

Knowing and more importantly understanding these figures can help a great amount towards getting your credit score back on track. Follow us on Twitter and Facebook.

Why credit scores are different

September 17, 2015 by · Leave a Comment 

Why credit scores are different

Many consumers go beyond getting their free annual credit report from the nationwide credit reporting agencies, Equifax, Experian and TransUnion. These consumers pay for monthly subscriptions to a credit monitoring service with the goal of knowing their credit score at any point in time and receiving alerts when someone uses their personal information or accesses their credit history. It takes many people by surprise when they purchase credit scores just before applying for credit only to find the lender’s credit score disclosure does not match. Why is that the case, and what can you do?

What Credit Scores Tell Consumers and Lenders
Credit monitoring services and nationwide credit reporting agencies make money by selling credit scores to consumers, lenders and other businesses that use credit scores for decision-making. You, as a buyer, borrower or consumer, can buy educational credit scores from a credit monitoring service. Educational credit scores help you prepare to apply for loans, manage your debts and eliminate fraud or identity theft. Mortgage lenders, auto loan companies, credit card providers, insurance companies, landlords and employers buy credit scores from credit reporting agencies. Credit scores help them determine if you will pay your bill on time, in full, every month; predict if and when you might fall delinquent on your accounts; or evaluate if and when you are likely to default on your credit obligations. Whatever they’re being used for, credit scores should be based on the same information for both lender and customer, so why are scores from different sources so different? Two reasons credit scores differ are discrepancies in reporting methods and different scoring models.

Issues with Reporting Methods
Common discrepancies in reporting methods include:

  • Consistency – not all data furnishers give information to all credit reporting agencies.
  • Timing – data furnishers may provide the same information to all agencies but at different time schedules.
  • Accuracy – changing personal information, i.e. names or addresses, has to be matched to the correct credit file.
  • Privacy – Credit reporting agencies do not cross-share details on inquiries and information with each other.

Lenders and other creditors can choose what information to report, when to report it and which agencies to report to. Some lenders report monthly to all three agencies. Other creditors, like collection agencies, may report quarterly or only when there is activity on your account. Some agencies only report to a single credit reporting agency. A one-week difference in reporting information to the agencies could make a difference in your score from each one. Since reporting agencies do not cross share information with each other, the report and score you buy may not contain the same information that the lender report and score contains.

Scoring Models
Each credit reporting or monitoring agency uses a different method to calculate your score. They base these calculations on complex mathematic, statistical or algorithmic models. Scoring models are proprietary systems and are protected by trademarks, patents and copyrights.

There are three types of credit scores that credit providers purchase:

  • Generic scores – predict general payment performance
  • Industry scores – predict performance on specific type of credit
  • Custom scores – predict performance by company’s customer base

Generic credit scores are used by credit monitoring services to educate you, the consumer. You can use a credit monitoring service to learn how to get your score from what it is today to where you need it to be in the future. You can also use this service find out how late payments, opening new accounts or paying off debts may change your scores over time. Again, these are educational items and there is no guarantee you will achieve a certain score at any time.
Industry credit scores tell, for example, car lenders how you have paid your car loan, but that score may be different from a mortgage or credit card score. If you have had an automobile repossession, your auto industry score may be low in comparison to your mortgage industry score if you have never had mortgage delinquencies. Lenders may have their own in-house system to calculate a custom score based on their specific credit products and customer base. These scores often rank you in comparison to other customers and may work more like a grading curve than a general purpose credit score.

Take an Active Role in Providing Your Own Credit Information
You cannot control what credit scores you or a lender will get at any time, but you can know what information is in your credit file and keep it up to date. Make sure your name, address, birth date, Social Security number and employment information are current and correct. If you have a common name make sure other people’s information is not in your credit report. If you have received collection agency notices, check for reporting with the original creditor. Duplicate items can affect your credit score. When you correct or dispute an item, make sure you do it with all three bureaus, Equifax, Experian and TransUnion.

The Bottom Line
Finally, educate yourself about the different types of credit scores, credit reporting agencies and credit monitoring services in the market. Visit their websites to learn about their scores and services. Here is a list of providers most often used by consumers and industry.

CreditXpert Score Affinion
Experian PLUS Score Experian
Equifax Credit Score Equifax
FICO Score EquifaxFICO
VantageScore TransUnionVertrue

Original Article



5 Questions to Ask Before Your Apply for Credit

September 16, 2015 by · Leave a Comment 

The 5 Credit Questions You Should Ask Before Your Next Application

I was going to write a “do these 5 things before the end of the year” article for this week but I’m sure you’re being overrun with those right now.  So, in lieu of “piling on,” I figured I’d give you something more practical and something that can save you a boatload of money.  Before you fill out your next job, credit or insurance application, be sure to ask the appropriate questions from this list.

“Mr. Credit Card Issuer, do you report credit limits to the credit bureaus?”

Missing credit limits can lead to lower credit scores and some credit card issuers do not report your credit limits.  The problem used to be much worse years ago, when Capital One used to withhold credit limits on their accounts.  They started reporting limits in 2007 and have largely been forgiven for withholding the important data.  There are, however, still some cards where limits won’t be reported.  The so-called “no limit” cards don’t report limits and charge cards don’t report limits.

This is important because the credit limit (as reported on your credit file) is denominator in the “revolving debt utilization” calculation.  And, if it’s missing, the “highest balance ever” figure is used in lieu of the limit.  If the highest balance ever figure isn’t as high as the credit limit, and it generally isn’t unless you’ve maxed out your card, then your utilization percentage will be higher, and your credit score could be lower.  So, asking the question up front could save your scores.  Here’s a really damaging example…

Credit Limit – $10,000

High Balance – $1,000

Current Balance – $900

In that example the REAL utilization is 9% ($900/$10,000), not bad at all.  But, if that limit were missing then the utilization would be 90% ($900/$1,000), which is terrible.   This measurement is taken on a line item (card by card) basis AND an aggregate (all cards) basis, so there’s no escaping the damage.

“Mr. Employer, do you review credit reports when you screen potential employees?”

Employers are allowed, in most states, to review your credit reports as part of employment screening.  They’re required by law to get your permission to do so.  It still is a good idea to ask up front if they intend to do so.

Millions of American’s credit is in the tank these days:  35% of the population has FICO scores under 650 and while scores are NOT used by employers (reports yes, scores no), the data underlying a 650 (and below) score isn’t flattering, which means that 35% of the population has poor credit.  The worst thing that could happen would be to not get a job, or waste time and energy pursuing one, if your credit is going to disqualify you for consideration.

Knowing in advance will give you the opportunity to work on your explanation.  And, if your report contains damaging errors, it will give you time to get them corrected.  And if the company is hiring for multiple positions, it might even allow you to choose a role that is “credit free.”

“Mr. Lender (or Insurance Company), which credit bureau do you use?”

Why would you want to know this before you applied for a loan or insurance?  The answer is very simple: strategic applying.  If you knew that your FICO score from Equifax was 700 and your FICO score from TransUnion was 645, and you knew the lender used TransUnion for their credit reports… wouldn’t you want to maybe find a lender who used Equifax?

You would be more likely to get approved, and more likely to get approved with better terms.  Many consumers assume that lenders won’t tell them what credit bureau they use.  Some don’t, but some do.  It’s not a matter of national security for Joe’s Bank to tell you that they use Equifax for their credit reports.  They might even tell you what minimum score they require to approve the type of loan you’re interested in.  Arming yourself with this information can save you the embarrassment of a denial AND the potential damage of the wasted credit inquiry.

“Mr. Lender, what score exactly are you using?”

This is different than knowing what minimum score your lender requires for an approval.  This is finding out what VERSION of score they’re using.  There are many different versions of the FICO scoring software and not all lenders are using the most current version, to your detriment.

The newest version of the FICO score is still called, unofficially, FICO08.  This version does NOT count collections that have an original balance of less than $100.  This version also scores low risk consumers higher than older versions.  Point being, if you’re a good borrower, you REALLY want your lender to use the 08 version.

You can’t force your lender to use this version and the entire mortgage industry is still years behind when it comes to adopting newer scoring models.  Fannie Mae and Freddie Mac (that’s about 70% of all mortgages today) are still using older, much older, versions that were built well before the credit crisis.  There are lenders who are using current scoring versions and you should take your business to them.

“Mr. Lender (or Insurance Company), what is the minimum score required to get approved at the best rate?”

In July 2011, the FACS (Fair Access to Credit Scores) Act goes into effect.  And boy, oh boy, am I counting the days! This law requires lenders and insurance companies and anyone else who uses a credit score to make a decision about you, to give you, for free, the actual score they used if they declined you.

This will lead to a new era of score transparency. Within a few months we should have enough data to put together tables for every lender and insurance company that answers the above question.  If XYZ Bank declines you at 647, it won’t be a secret any longer.  Point being, we’ll be able to cobble together a really good understanding of minimum score requirements.

So don’t be shy the next time you’re about to fill out that application.  Asking one or two questions can save you money on a loan, save you some embarrassment and make you sound like a well-informed consumer.

By John Ulzheimer for Mint:

Credit 101 Step 2 – Credit Scores

September 11, 2015 by · Leave a Comment 

This is part 2 in a series of videos on basics of credit, that is Credit 101. What is a credit score? How do we explain the algorithm that makes up a credit score or FICO score? This is something that should be taught in high school. A brief explanation of credit scores. Interview between Adam Villaneda and Cesar Marrufo. Elite Financial, LLC credit repair in Yucaipa, California (Moreno Valley). Learn how to fix your bad credit report and position yourself to purchase a home.


September 9, 2015 by · Leave a Comment 


Credit has the ability to make some consumers cringe. The whole industry and online forums are filled with previous truths that are now a myth and it can seem daunting to try it on your own. But if you take the process and break it up, it’s actually pretty simple. Here is a breakdown of what we do behind the curtain and how you can help yourself become a better credit expert.

1)     ANALYZE – First things first…How can you know where you are going if you don’t know where you currently are? Obtain a credit report through the 3 major credit bureaus (Experian, Trans Union and Equifax). Analyze your credit report for key derogatory items and look for erroneous, disputable and/or obsolete credit information.

2)     DISPUTE – This is the fun part (for me), the part where you get to be heard. Voice your frustration out in a calm and assertive manner (Kinda like dog training right?) Dispute key derogatory items for erroneous, disputable and/or obsolete credit information at each credit bureau. This should be done in a letter form and snail mailed to each bureau. NEVER dispute online!

3)     ADD (or Maintain) CREDIT – Now, this step is where a lot of consumers get lost. The common question here is “How am I supposed to get credit if my credit stinks!” I have written about this topic several times (HINT= See our website). Almost all credit files with high credit scores have something in common…Open, active credit accounts. This step is CRUCIAL in the process. Focus on obtaining new credit or managing the credit you have open in a proactive way. (HINT= I have written articles on managing credit as well)

4)     DIRECT CONTACT – In order to streamline the process, you can also go straight to the source. Contact the original creditor who is reporting the key derogatory information. The same process that is happening through the credit bureaus can happen at each creditor level as well. This step should only be done when a simple credit bureau dispute.


Now, there is a ‘hidden’ 5th step. That is, repeat step 1-2 as needed until you get the desired result. If you are unable to reach your desired result, step 4 will help. In all cases it is extremely important to remember to keep detailed notes and dates, names and numbers for future reference. If you find that you simply don’t have the time, are frustrated with the process or you know someone who needs help with this, simply call our office (909) 570-9048.

p.s. For a copy of “5 SECRETS THE CREDIT BUREAUS DON’T WANT YOU TO KNOW” contact me directly.

Credit 101 Part 4 The Credit Bureaus

September 4, 2015 by · 1 Comment 

This is part 4 in a series of videos on basics of credit, which is Credit 101. What are the credit bureaus? Who are the credit bureaus? This is something that should be taught in high school. A brief explanation of credit. Interview between Adam Villaneda and Cesar Marrufo. Elite Financial, LLC credit repair in Yucaipa, California. Learn how to fix your bad credit report and position yourself to purchase a home.

Medical Bills Hurting Your Credit Score

September 3, 2015 by · 1 Comment 

Interesting article I found on NY Times about how collection accounts can ruin credit scores. I see this very often. In many instances, consumers have health insurance and a co-pay was billed and the client was not notified appropriately. The end results was a drop in credit scores, hours wasted on the phone and money spent to just make it go away. It is an unfortunate fact of the credit reporting industry. Read on…


Paying your medical bills is becoming more complicated, particularly as more patients become responsible for a greater share of their medical costs. And often, hospitals and other providers are turning over bills more quickly to collection agencies.

The problem, as my article on Saturday outlines, is that medical bills can be riddled with errors. Or, it may just take you many months and phone calls to figure out how much you’re really obligated to pay, or why your insurer is dragging its feet. But if you take too long to untangle the mess, it could end up hurting your credit score. If a medical provider hires a collection agency to collect the money on its behalf, credit experts said there’s nothing stopping them from reporting the delinquency to the big credit reporting bureaus. Debt collection experts said that it was ultimately up to the medical provider to determine when the debt got reported.

A consumer has 30 days to dispute the debt (from the time the debt collector initially reaches out to them) with the collector. And if the consumer disputes the cost, the collector is supposed to “cease collection of the debt” until the collector can verify the debt with, say, a copy of a judgment. “That would seem to include notice to the credit bureaus,” said Robert J. Hobbs, deputy director at the National Consumer Law Center and author of “Fair Debt Collection” (National Consumer Law Center, 1987). But “it’s a gray area of whether that is actually a collection effort.”

The Consumer Data Industry Association, a trade group for the big credit bureaus, said that consumers could also request to have the debt deleted from their credit report if the debt was invalid. But as we’ve reported before, disputing errors is not always an easy process.

“You’ve got this mishmash of consumer protection laws that might provide some protection, but aren’t specifically designed to protect consumers against medical billing problems,” said Gerri Detweiler, a credit expert with “We’ve given collection agencies a lot of power to harm consumers’ credit reports due to medical problems, without proper checks and balances.”

The article also discusses legislation that would erase medical debt from credit reports within 45 days of being settled or paid. Supporters of the bill said it would help people whose credit scores were unfairly damaged, while critics argued that it would undermine the value of credit reports because it does not distinguish between people who were truly delinquent and those who were the victims of billing errors or other mistakes.

Has your credit score been damaged by medical bills? What do you think of the legislation? Please share your experience in the comment section below.


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