Avoid Bruising Your FICO Score

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A FICO or credit score can range from between 300 to 850 points, with 780 and above being excellent, and 600 or lower dismal. While it may seem there is plenty of space with which to keep a score afloat, most credit card users find that it’s the tiny mistakes that sink a FICO score. 

Never pay late

The biggest way to ding your credit score is by missing a payment. A payment becomes delinquent if it’s between 30 to 60 days late. According to the Motley Fool, a payment that is 90 days late can damage your score as much as filing for bankruptcy. Your payment history is the most important component of your credit score. Any late payments on current loans like a mortgage count against your score. Even a long-past delinquent bill that has been transferred to collections can harm an otherwise adequate score and cost you 100 points on your FICO score. 

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Five Free Credit Repair Tools

shutterstock_154843046Credit health is illusive without the proper tools. In addition to our services, there are several preemptive and free ways to get serious about financial improvement in the New Year. Begin by taking advantage of the following resources. They will help you on the path to stability.

  1. Credit reports. Thanks to the Fair Credit Reporting Act (FCRA), every person is entitled to free annual copies of their credit reports from the major bureaus—TransUnion, Experian and Equifax.

Credit repair fix: Review your reports carefully, highlighting any information that is incorrect, outdated or suspicious. Clean credit requires correct information, and identifying the errors is the first step.

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What Affects Your Credit? Divorce.

The attorneys at Lexington Law Firm are experienced and can help you move forward with your credit situation. One of those credit situations may be divorce — which can be devastating to your credit. Contact Lexington Law Firm today to find out how we can help you with your credit situation.

 

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What Affects Credit? Identity Theft.

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How Does Health Care Reform Affect my Medical Bills?

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Under the Affordable Care Act, most Americans were required to register and obtain health care insurance by January 2014. For those who did not or have not registered for health insurance, a tax penalty of 1% or $95.00, whichever was greater was assessed for the 2014 tax year. This penalty will be increased to2.5% or $695, whichever is greater, for the 2016 tax year.

First, insurers are required to cover the costs of regular checkups and screenings for cholesterol and blood pressure. These check-ups and screenings are to be delivered with no out of pocket costs to you. Potentially giving you a savings in relation to your annual health care costs.

Second, depending on your household annual income, you may qualify for subsidies to assist you in purchasing insurance (from a monthly tax credit) from one of the companies in the marketplace. Additionally, your co-pays and deductible may be reduced.

Third, if you are under 30 and reasonably healthy, you could elect to purchase a health care plan designed to cover a catastrophic medical emergency such as injuries incurred in a serious car accident. This could lower your monthly premium. However, you should be wary in electing this type of coverage because it may not cover treatment for other types of illness or disease.

Fourth, under the Affordable Care Act, if you have a family with children, insurers are required to cover preventative care for those children such as annual checkups, pediatric vision screenings and immunizations. This is medical cost savings to you. Additionally, if you have children over 19 but younger than 26, you can maintain them on your policy. This could be a cost savings to these children at a sensitive time in their lives when they may be in school or beginning a career.

In conclusion, although there are benefits under health care reform, it is important to remember that the Affordable Care Act will only help you obtain and in some cases receive some financial benefit from your insurance policy. In many cases, you will still be subject to medical debt if you do not elect the appropriate type of coverage. It is important in all cases to be aware of not only the cost of the policy but also what the deductible is under the policy. A high deductible may put you in a precarious financial position if you have a catastrophic or long-term illness.

 

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Medical Bill Myths and How They Can Affect Your Credit

How Medical Bills Affect Your Credit

The Link Between Hospital Stays and Credit Scores

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Identity Theft’s Impact On Your Credit Score

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Identity theft is a crime that has a substantial impact on the victim. If you experience identity theft, the consequences can have rippling effects that may follow you for the rest of your life.

According to the Insurance Information Institute, identity theft is unfortunately a fairly common type of crime. The state of Florida reported the highest number of complaints at 38,982 in 2014. The top five states for cybercrime in 2014 that led to identity theft included:

  • California
  • Florida
  • Texas
  • New York
  • Pennsylvania

Awareness of the crime and knowing how to react will help you protect yourself against the repercussions of identity theft.

Identity theft scars your credit score

According to Experian, your credit history dictates your ability to qualify for loans. Essentially, it works as a report card for your financial responsibility, and lenders look at it to decide whether you are a risky borrower.

If you have a high score, not only will you qualify for mortgages, lines of credit and other loans, but you will also likely have a low interest rate, which will save you a great deal of money over the life of the loan. When a credit score is low, a consumer may face rejection and impossibly high interest rates that can burden personal finances.

Excellent credit usually sits at or above 720, while a score below 620 is a red flag for lenders. About 35 percent of a credit score is based on whether you pay your bills on time. Another 35 percent is determined by the balance-to-limit ratio on your credit card bills or loans. Only 15 percent of the score accounts for the age of the credit history, and mixed credit make up 10 percent of the final score. Another 10 percent accounts for the number of inquiries from creditors. So each time you attempt to open a new line of credit, your credit score is impacted.

When you fall victim to identity theft, your credit score also falls. Typically, a criminal will open accounts, apply for new loans or lines of credit under the name of their victims, and then not pay the bills. When this happens, credit scores plummet. Credit inquiries also impact your score and bring it down by a few points each time a lender checks your credit report.

In addition, Good Financial Cents noted criminals might open a wireless plan or pay for a home utility bill with your personal information but without paying the bills. Unfortunately, this will lead to negative items appearing on your credit report.

Your information may wind up being turned over to collections due to the unpaid debt accrued by a criminal who stole your identity. 

React to identity theft

When you realize you are a victim to this crime, the key is to react swiftly to minimize the damage. Ensure that you notify police of this crime and file a report right away. This is a serious crime and when disputing various negative items on your credit report, a police report will be critical in building a case to present to creditors and the credit bureaus.

Keep an eye on your credit score regularly. If you notice a significant drop, it may be due to identity theft. The Consumer Finance Protection Bureau also noted you should contact the credit bureau as soon as you notice inaccurate information present on your report. You will also want to contact and cancel all credit accounts that have been compromised by thieves.

Whatever you do following identity theft, make sure you document each step you’ve taken to present to the creditors and credit bureaus and continue down a more prosperous financial future.

Prevent identity theft

One of the best ways to eliminate your risk of identity theft harming your credit score is to become aware of this type of crime. Knowing the serious side effects of identity theft and how it can impact your life will encourage you to prevent it.

Lexington Law Firm provided some simple tips for preventing identity theft, such as not carrying around a Social Security card or passport, and not revealing a PIN or other personal information. Even your birthday can be used against you.

Whenever you receive mail, always shred the documents so your information cannot be compromised. Criminals can easily gather mail and use the information to open new lines of credit that may damage your credit score. If you do not already own a paper shredder, consider investing in one.

Monitoring your credit score regularly is another way to protect yourself against this crime. If you notice any suspicious activity, react quickly. The faster you do this, the less identity theft can impact your financial situation and credit score.

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About Lexington Law Firm’s Identity Theft Focus Track

Identity Theft and the Holidays

5 Steps to Protect Yourself from Identity Theft during College

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