Month: February 2018

How to Avoid Paying Mortgage Insurance

rebuilding credit

Imagine this scenario. You have found the perfect home, on the perfect street. This is going to be the place that you will set down roots and raise children with your significant other. You’re ready to purchase the home. Your mortgage broker gives you a breakdown of what you will be paying each month. You notice in the breakdown a line item titled “PMI” or Private Mortgage Insurance. This is a monthly cost that will not assist you with the interest on your loan or pay down your principal. So, how do you get rid of this expense?

What is PMI

Private Mortgage Insurance or “PMI” is not designed for your benefit. This insurance policy is designed to protect the lender from losing money if you default on your mortgage. You can avoid this payment using some of the tools that I will mention below. However, please make a careful analysis before adopting any of these methods into your mortgage borrowing strategy.

  1. You can put a 20% down payment on your home. Generally, if you put this large down payment on your home, the mortgage company will see you have something to lose if you default on your mortgage and not require a PMI policy on your loan. Please keep in mind that this can be a sizable amount. For example, if your home costs $200,000.00, you will be required to make a $40,000.00 down payment on the home to avoid PMI.
  2. If your lender is motivated to sell you a loan, the lender may offer to pay for the PMI. This situation may be market specific and may not be available in all geographical areas.
  3. If you are a military service veteran, you may qualify for a loan through the VA. These loans do not generally require a PMI policy.
  4. You may be able to provide a 10% down payment if you were to “piggyback” loans together in order to purchase your home. Most commonly, you would have an 80% first mortgage, a 10% second mortgage and a 10% down payment. Not all mortgage companies will offer or allow this option. You will need to speak with your broker to see if this is a possibility.

In closing, it is important to know the costs and obligations that you are assuming when you take a mortgage on your home. Examine your documents carefully. If you do not understand the vocabulary in the document, ask, it may save you money.

If you’re concerned that your credit isn’t good enough to begin the home buying process, learn how you can start repairing your credit here.

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Realizing Your Credit Repair Resolutions in 2018

credit repair resolutions

It’s a new year once again and resolutions abound. Maybe you’ve decided it’s time to get in shape, or to make this the year you find your dream job. If you racked up a lot of debt over the holidays, improving your credit is probably at the top of your new year’s resolutions list for 2018.

If your credit score is in the low or poor range, improving it can feel like a daunting task, but there are some major benefits to boosting your score. Among the most notable, a better score will make you eligible for lower interest rates on credit cards and loans, in turn helping you to get out from underneath all of that holiday debt. A higher credit score can also factor into many other parts of your life that you may not even be aware of — including helping you to land that job.

So if you’re ready to make better credit a reality in 2018, here are some simple steps to begin boosting your score.

Check your credit report and score

The first thing you need to do before you can begin making meaningful strides to fix your credit, is to find out exactly what’s on your credit report. You are entitled to receive a free copy of your credit report from each of the three credit bureaus annually.

Once you have copies of your credit reports, review them thoroughly and note any items that you believe are inaccurate, or any old items that you believe should have fallen off of your report by now. Anything that is inaccurate and is negatively impacting your credit will need to be addressed, and you may need to initiate a credit dispute. By getting inaccurate negative items removed from your credit report, you’ll be on your way to increasing your credit score.

With a clear picture of all of your accounts and debts, you can use this information to take additional actions to fix your credit, including:

Reducing your spending to pay down debt

Credit cards with high balances are a key factor that will have a negative impact on your credit score. That’s because your debt and credit utilization make up to 30 percent of your credit score. This means that if you have a credit card limit of $1,000 and you are using more than $300 when your lender reports your outstanding balance to the credit bureaus then your score will likely decrease. Even if you’re making your minimum payment on time, you likely won’t see your score rise. If you want your score to improve, you’ll need to find some other areas where you can cut your spending this year and apply that money to paying down high balances. If you’re not sure where to start, list your debts from lowest to highest and start by tackling your lowest-balance accounts first. When you pay off the first account, apply everything you were paying to that card or account to the next-highest balance, and so on.

Make all of your payments on time

Making your payments on time is the most important thing you can do to improve your credit. In fact, payment history accounts for up to 35 percent of your credit score. While some late payments are not reported to your credit account — say, a utility bill that gets paid a week or more late — most other accounts are. Mortgage, auto loans, and credit cards report to the credit bureaus when a payment is 30 days late. You’ll also be hit with a late fee on many accounts that aren’t paid in a timely manner. That’s just more money out of your pocket and that payment ultimately ends up costing you more in the long run.

Determine whether or not you may need to establish credit

If you haven’t established any credit accounts or just have a couple, this can also reflect negatively on your score. Credit history is used to determine future creditworthiness because it provides a record of how you’ve handled credit in the past. It accounts for 15 percent of your overall credit score. If you haven’t established credit, you may want to consider applying for a credit card that has a low limit or even a higher interest rate than you’d prefer because without credit cards you have no revolving credit account history and no utilization ratio. These cards are often easier to qualify for and, when used wisely, can help you build credit and boost your score.

Carefully select which credit applications you submit

Each time you apply for an extension of credit a hard inquiry appears on your credit report. Research which creditor will offer you the best interest rate and the most appropriate line of credit. If you have three or more hard inquiries within a 12 month period, your score will likely drop.

Settle any defaulted loans

If you have any loan or credit card defaults on your credit report, these items need to be resolved as soon as possible. Defaults, foreclosures, or bankruptcies have a severe negative impact on your score and the process for removing them can be complicated. It’s a good idea to work with a legal credit repair professional to find the best course of action for resolving these issues.

Consider enlisting the help of a reputable credit repair firm

If you’re serious about improving your credit in 2018, working with a firm that is knowledgeable and experienced in credit repair is critical to achieving that goal. Lexington Law clients saw 9 million negative items removed from their credit reports in 2016 and learned how to better control their credit. Contact us today at 1-800-608-8004 for a free credit report review and consultation.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

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Disputing a Charge on Your Credit Card

credit card dispute

Every once in a while, you might see something on your credit card statement that you don’t recognize. While it’s alarming and possibly leaves you feeling a little violated, there are steps you can take to remove it from your account. First, you’ll want to call your credit card company to let them know your card has been compromised. You can call the merchant to inform them that someone has used your card fraudulently. If they are unresponsive or unhelpful, the credit card company will likely help you remove the charges from your balance. Most credit card companies are very understanding when this happens.

For those who are actively working towards credit repair, it can be especially stressful to have this happen. There are three reasons you can legally dispute a charge on your credit card so you are not ultimately responsible for it:

Someone used your card without your permission.

As outlined in the scenario above, this may leave you feeling the more vulnerable, but there is hope. You can work with the credit card company to resolve this issue. Many credit card companies have policies on fraudulent purchases that work in the consumer’s favor.

You were billed by the company in error.

Say your cable company has charged you twice on accident. After speaking with your credit card company, you should also speak with the merchant to resolve this issue, and there may be an apology credit in your future.

The merchant won’t help you resolve an issue with what you have purchased.

Imagine you purchased something, only to take it out of the box and realize it was damaged in some way and therefore didn’t work. If the merchant refuses to exchange or refund your purchase, it’s possible to get a chargeback on your card.

Here are some things to watch out for that can affect your credit in these types of situations:

After you’ve resolved the dispute, you may want to find out if there are other accounts in your credit profile that have been compromised. As you may already know, running a hard credit inquiry may ding your credit score by a few points. That’s a far better alternative than finding out you have a fraudulent account in your name when you’re about to make a large purchase.

If you are unable to dispute the charge successfully, you may have to pay it, though it’s unlikely it will get to that point. Nonpayment would, of course, impact your credit negatively. The long-term effects of this will likely be far more costly than paying a charge you shouldn’t have to. When it comes to credit, sometimes it’s more important to think big picture. You can also consider initiating a credit report dispute.

Ultimately, if you do have to dispute a charge, make sure it’s for a good reason and in good faith. Credit card companies notice patterns of abusing the system, and it doesn’t end well for those who do.

For more information about credit repair and winning credit card disputes, contact

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5 Credit Card Perks You May Not Know You Have

credit card perks

We all see commercials for the various perks and rewards offered by various credit cards. Credit card companies offer these rewards to entice consumers to sign up. Rewards range from free trips and discounts on purchases to cash back. While it’s true that credit card companies are in the business of making money, if you use them correctly, some of these perks could put some money back in your pocket.

If you decide to get a rewards-based credit card, it’s important to understand how it works. First of all, you need to decide if the potential benefits offset any annual fee associated with the card. Next, you must make sure that you properly manage the monthly payments on the account each month in order to reap the most benefit from your rewards. For example, it’s always a good idea to pay as much of your total balance off each month as you can. Not only will this typically increase your rewards eligibility, it will also give your credit score a boost. Credit utilization accounts for 30 percent of your overall score, so keeping balances low is key to maintaining a high credit score. Ideally, you always want to keep your utilization rate under 30 percent of your total available credit.

So long as you manage your credit card accounts responsibly, there are many benefits to taking advantage of rewards. Let’s take a look at 5 lesser-known credit card perks you may not realize you’re eligible for:

  1. Admission discounts

    Different credit card companies have relationships and agreements with different businesses. This can work to your advantage if there are rewards or discounts for things like restaurants, movies, or museums. For example, in January, Bank of America announced that it was offering free admission to 200 museums across the country this year. The deal grants free entry to participating museums on the first weekend of the month for cardholders.

  2. Product protection

    Many cards offer additional protection on purchases made with their card. One of the more popular perks credit cards are offering these days is cell phone protection coverage. Chase and Wells Fargo each offer up to $600 in damage coverage if customers use one of their cards to pay their cellular bill each month. Considering that cell phones are one of our most costly investments — a new iPhone X averages $1,000 — this is an attractive perk for many.

  3. Reimbursements on price differences

    Discover, Capital One, Citi, and Chase each offer different types of “price protection.” This is a perk that reimburses cardholders when price differences occur within a certain amount of time on a product they’ve purchased with the card. The timeframes range from 30 to 60 days and these cards will issue the difference in price to the cardholder.

  4. Presales and special access to events

    American Express is perhaps the most prominent card offering this perk. Cardholders are eligible for presales on all types of events, including concerts, live shows, and sporting events. They’re also eligible for VIP experiences and other perks at significantly discounted rates.

  5. Cashback matches

    Discover is currently offering a cashback match on everything cardholders get at the end of their first year. While this is an extremely attractive perk, be sure to consider whether or not the benefits of opening a new card outweigh the impact of adding a new credit account to your name.

If you want to learn more about your existing credit card perks, or if you’re considering getting a new rewards-based card, it’s always best to inquire with the company. Most credit card companies list out their rewards and stipulations on their website. You can also call and talk to someone that can walk you through some of the benefits.

If you’d like to learn more about how to manage your existing credit card debt in order to improve your credit score or to become eligible some of these perks, Lexington Law can help. Call us today at 1-800-608-8004 for a free credit report review.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

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How Disputing Information on Your Credit Report Affects Your Credit

credit dispute

Every once in a while you might see something on your credit report that you don’t recognize. For those who are actively working towards credit repair, it can be especially stressful to have this happen. While it’s alarming and possibly leaves you feeling a little violated, there are steps you can take to dispute it.

Then, of course, you may also want to dispute information on your credit report that is just plain erroneous or incorrect. Here are some examples of things you can dispute on your credit report:

  • Incorrect personal information: names, addresses, dates, and more can be reported incorrectly to credit bureaus. Wrong spellings of names should also be corrected.
  • Unfamiliar accounts: bank accounts, credit cards, loans, and others may also be incorrectly reported and may show up on your credit report. When this happens, you should take immediate action.
  • Incorrectly reported accounts. Sometimes things can be reported as open when they have been closed, or vice versa. These types of mistakes can be disputed.

How to dispute incorrect credit items

This will depend mostly on the credit bureau, of which there are three major ones: Experian, Equifax, and Transunion. They usually share information, so if you dispute with one bureau you may see changes to your report from another. You should work directly with each one if you see something on your credit report that isn’t accurate. You can also learn more about the disputing process on their individual websites.

The cost of disputing items

Filing a dispute will not change your credit score. The results of a dispute, however, can change your credit report, depending on the nature of the dispute. If you report incorrect spellings of names or addresses, this usually has no impact on your credit.

If you dispute something that changes for the better, it may stay on your credit report indefinitely. If you dispute something and it changes to a negative item, it could stay on your credit report for up to seven years. After that period of time, however, it should fall off of your report. For the most part, people tend to only report things that impact their credit negatively, so there’s a good chance that you may experience a slight increase in your credit score following a successful dispute.

If you disagree with the outcome of your dispute, you can take further action:

  1. Find out who reported the information and contact them. You may still be able to change the outcome.
  2. Add a statement of dispute. While this will not change the outcome of your original dispute, it can help you down the road when potential lenders or creditors review your credit history.
  3. Dispute again with relevant information. If you discover new information related to the disputed item, you have the option to dispute again with more supporting documentation.

If you need more assistance with your credit repair or credit dispute, contact Lexington Law at

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