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Tracy Becker
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Learn more about FICO credit scores!
For professionals that serve those purchasing real estate or seeking financing we know firsthand how confusing and frustrating credit and scoring can be. W
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What is a "consumer dispute statement" on credit reports?  Can it increase/decrease credit scores and interfere with loan approval?

When an individual decides to review their credit and attempt to work on improving it they either challenge the validity of the credit history with the bureaus or directly with the creditor. This process may cause consumer dispute statements (CDS's) to appear on credit. Initially, when a negative account is disputed it will be taken out of the score formula or be calculated differently for a period. This change in calculation can cause increases in credit scores until verification by the creditor and the credit bureau is complete. The same applies to good accounts but scores can drop.
 
When the initial verification is complete the account will be corrected or verified as accurate. If the consumer continues to dispute the account a notation that the consumer disagrees/disputes the account is placed on the credit report. This can continue to alter the score and removal is more complicated.
 
Most loans will not be approved by a lender or will be kicked into manual underwriting if a CDS is pending or unresolved on credit.  Most loan professionals (LP's) are aware that a CDS can inhibit their ability to get a loan closed but may not realize the reasoning behind it.
 
Lenders want to price loans correctly with the true level of risk reflected. An accurate score prior to pricing and extending financing is of primary concern which is why these CDS's  can be important.
 
A quality credit repair company will explain this to LP's when changes to a client's credit are complete.  They will also advise the LP when new reports can be pulled for credit score accuracy.  By conferring with the LP they remove CDS's that can cause issues for approval and  give the green light for all to advance forward with loan application.  Unfortunately, there are many dispute factory type credit repair companies and even consumers that randomly dispute with no strategy into how these dispute notations will impact loan approval and successful timing of a closing.

If you need any credit advice or feedback feel free to reach out to North Shore Advisory, Inc. Credit Repair Experts.
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How do personal and business credit scores and indexes vary?

Although they are both extremely important, here are some differences between personal and business credit that many fail to realize:

For personal credit, FICO scores are the leading score in the consumer banking and scoring world. FICO scores can reflect the history of credit profile for many years with the last 5-6 years of delinquencies impacting the score the most. On the other hand, with business credit Dun & Bradstreet credit scores may reflect delinquencies, but it is not the date of the delinquency that matters most it is the amount of debt owed plus the delinquency that would be meaningful to how the scores fluctuate and show greater risk.

FICO scores will clearly show each creditor name and account number where as Dun & Bradstreet trade lines do not reveal the name or account number of the creditor. If you have a problem with a delinquency posted on your D&B report it could be very difficult to find out which creditor posted the misinformation.

For a lender to review your personal credit you must give your consent. Anyone can pull a Dun & Bradstreet credit report on a business without consent.

FICO scores do not reveal the income or financial status on the credit reports. Dun & Bradstreet will report current financials if the information is public or if the business requests they be reported.
Many businesses are harmed because they don't realize these differences. Since anyone can review business credit reports without getting consent from the company it is very important to keep current credit at its best. Potential lenders, vendors, and accounts could be evaluating credit and making decisions that will impact the profits and success of a company.
How do personal and business credit scores and indexes vary?

Although they are both extremely important, here are some differences between personal and business credit that many fail to realize:

For personal credit, FICO scores are the leading score in the consumer banking and scoring world. FICO scores can reflect the history of credit profile for many years with the last 5-6 years of delinquencies impacting the score the most. On the other hand, with business credit Dun & Bradstreet credit scores may reflect delinquencies, but it is not the date of the delinquency that matters most it is the amount of debt owed plus the delinquency that would be meaningful to how the scores fluctuate and show greater risk.

FICO scores will clearly show each creditor name and account number where as Dun & Bradstreet trade lines do not reveal the name or account number of the creditor. If you have a problem with a delinquency posted on your D&B report it could be very difficult to find out which creditor posted the misinformation.

For a lender to review your personal credit you must give your consent. Anyone can pull a Dun & Bradstreet credit report on a business without consent.

FICO scores do not reveal the income or financial status on the credit reports. Dun & Bradstreet will report current financials if the information is public or if the business requests they be reported.
Many businesses are harmed because they don't realize these differences. Since anyone can review business credit reports without getting consent from the company it is very important to keep current credit at its best. Potential lenders, vendors, and accounts could be evaluating credit and making decisions that will impact the profits and success of a company.
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How Your Credit Score Can Prevent You from Opening a Small Business http://tmblr.co/Z0_BPx1nGJZCR 
How Your Credit Score Can Prevent You from Opening a Small Business Having a good credit score can help obtain a variety of things such as a mortgage for a home, better credit cards, and better...
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Credit Scores Can Make a Big Difference with Mortgages

As you probably know, having a good credit score can open the door to all sorts of opportunities, like the ability to finance everything from a car to your own business. One of the biggest ways healthy credit makes a difference is through mortgages. Having solid credit can allow people to purchase their dream home and get a better rate that could translate into hundreds of thousands of dollars in savings. 

Almost every mortgage bank will asses a borrower’s likelihood to repay a loan through their FICO score. The best rates for mortgages go to people with scores of at least 760. As your score goes down rates will go up, and eventually mortgages get outright denied if scores fail to meet a certain threshold depending on the loan. 

Here’s a hypothetical example that shows credit’s impact: 

Let’s say you have great credit and want to apply for a mortgage. According to FICO, with scores of 760 or better, the average interest rate is 3.56%. So if you applied for a $600,000 30-year fixed-rate mortgage your monthly payment would be $2,714. 

However, if your credit score was 100 points lower, the average interest rate would be 4.18%. At this point your monthly payment would jump up to $2,927. Compared to before, you would now end up paying $2,556 more per year, or over $75,000 more over 30 years. 

Even worse, if your score was in the low 600’s the average interest rate would be 5.15%. Compared to someone with a 760+ score, you would end up paying $203,400 more over the life of the loan! 

However, there’s no need to panic if you don’t know about your credit. The first key to good credit is understanding how it works. 

Here are the five factors that impact scores: 

• Payment history: It is factored by how timely you pay your bills, whether you have any past bills due/bills in collection, or if you’ve declared bankruptcy. 

• Credit utilization: It is factored by the balances you’re carrying on your credit cards compared to the limit on those cards. To have the best scores, you should be using less than 10% of the total and individual limits on your credit. 

• Length of credit history: It is based on the average age of the credit you have open. 

• New Credit: This reflects the number of credit card and other loan accounts you've opened, as well as any inquiries made about your credit recently. Having many hard inquires (or pulls on your credit score by others) can lower your score. 

• Types of Credit Used: This takes into account the different types of credit on your file. Having a variety of types of credit can sometimes help boost your score. 

You should also read my other articles on credit to get a better understanding of it (see them here: https://www.linkedin.com/today/author/36444445). Then you can take moves to correct your score. It’s a very good idea to speak with a reputable credit restoration company to assist with boosting your score. Using the right company can help you navigate the credit maze and see results in 20-50 days. 
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The holiday season is here! With that comes gift shopping which without care can lead to poor credit scores.

At this time of year we are all so used to hearing the same old song from the department store clerk singing the words, "If you open a store card today you will get an extra 30% off of your purchase".  Well that sounds great but is it really?  Let's take a look.
 
 
Not only does opening a new credit card cause a third party credit review which can drops credit scores but it also impacts your average age of credit making it younger.  Younger credit means higher risk and a drop in credit scores.  If a mortgage applicant is at a 740 credit score and two new accounts are opened during Holiday shopping the 740 score could drop over 50 points.  Depending on the loan amount the difference between a 740 credit score and a 690 credit score could be hundreds and thousands of dollars more over the life of a 30 year loan.   It may also mean a rejection.  To recover back to the original average age of credit could take years.  Be sure to share this with your loan applicants or potential home buyers so they are aware before they start opening new credit cards.
                                                               
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Building Diversified Credit Accounts on Credit Reports can Increase Scores

Most credit scoring systems define our level of risk to a lender by reviewing both our payment patterns and our ability to manage credit. From the information gathered by the three major credit bureaus a score is then formulated for each bureau. Most mortgage lenders take the middle number of the three credit scores and it becomes the indicator of the borrowers risk level. The categories of accounts we can add that make up a credit score are Revolving, Installment, and Mortgages. Revolving credit account balances such as credit cards, overdraft on a checking account, and certain types of lines of credit have the most dynamic influence on scores. The closer the outstanding balance gets to the limit the more the scores can drop. Because this type of credit allows the borrower to decide how much they will charge (up to the limit) and what payment they will make (no less than the minimums) the lender has a clearer view of an individual’s ability to manage credit. Installment credit which can include student loans or car loans or leases has a set monthly payment and needs less decision making or management skill. This is also the case for most Mortgage credit. Therefore, high mortgage or installment debt ratios have less of an impact on credit scores than do revolving credit ratios. Mortgages are the hardest type of credit to qualify for and more points are added to scores once these types of loans become seasoned. Seasoned credit is over one or two years old.

Age of credit is a factor used by the score formula and the older the average age of credit the better it is for credit scores. However, timing of applying for and opening new credit is key. Make sure you are opening new accounts years in advance of applying for a loan to give enough time for accounts to season and add points to scores. By opening many accounts in a short period of time scores can plummet due to reducing the average age of credit substantially.

When building a new business, the first 5 years are critical to a firm’s success and usually there is little or no profit. Some businesses are able to get financing based on their receivables but this may be at a high cost. In most cases if the business owner has excellent personal and business credit they can get the necessary credit related financial tools at lower pricing.
Of course if accounts are paid late or not paid at all credit scores will also drop dramatically. Collection accounts, late payments, and other delinquencies will reduce credit scores and outweigh positive credit building.

Aside from this it can be of great value to have one of our credit experts review any credit report challenges you come across. Getting the right feedback or help can be essential to the success of loan approval as well as good customer service. We are always available and well equipped to give individuals/business owners insight into what strategy would deliver the highest credit scores.
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The Experian Credit Bureau Hacking Is Not Just A One Time Event
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Will Closing Your Amex Business Platinum Card Hurt Your Personal Credit or Business Credit Scores and Indexes?

This is a good question. Usually Amex posts credit cards to personal credit reports even if they are business credit cards. To be certain you can pull a copy of your personal credit reports before taking any action. To get a free copy annually go to the annual credit report site. If the card is on the report it can impact your credit scores in a few ways. If it is not on your credit report and you close it there will be no impact to your personal or business credit. Business credit reports do not usually report American Express credit cards as a trade line.

Here are a few ways closing your card can hurt you if it appears on your personal credit report:

Balance to limit (B2L) ratios on revolving credit have weight on credit scores. Revolving credit is classified as most credit cards, over drafts on checking accounts, and some lines of credit. Both individual & aggregate B2L ratios impact credit scores. For example, if your total limits are 100k and your total balance is 50k you are at a 50% B2L ratio. The closer the balances inch up to aggregate and individual limits the more your scores drop. High balances on revolving credit reflect a borrower’s higher risk to lenders and creditors. Statistics show that consumers with high B2L ratios on revolving credit are much more likely to default. If the card you are closing is in the revolving credit category you are reducing your aggregate limit which will reduce your ability to charge without altering scores.
 
In our last example, if the 50k card was closed with the 100k aggregate limit the 50k balance would become a 100% B2L ratio & the scores would plummet. Scores can drop hundreds of points if B2L ratios on revolving credit are maxed out. There are some Amex cards that are not considered revolving credit. The way to find out is to get a copy of your FICO scores and see what category it is listed in when you view the account. If it says "Open" it is not included in the revolving category & will not impact the B2L ratios as much. If it say "REV" or revolving then it will cause score drops when balances are high.

Another negative to closing credit is that you may lose an old account that is adding to the average age of your credit scores. Average age of credit is another factor that can benefit scores. As your average age of credit gets older, more points are added to your score. Since "practice makes perfect" as a credit card holder extra points are given for those with many years of credit management. Once an account closes it can be removed after two years of inactivity. If an old account drops off your credit it can make the average age of your credit younger and reduce scores. Before you close the account check the date it was opened which is listed on the credit report. If it is an older account you will have to consider the potential cost to scores.
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Tracy Becker

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How Credit Scores Can Make a Big Difference with Mortgages

As you probably know, having a good credit score can open the door to all sorts of opportunities, like the ability to finance everything from a car to your own business. One of the biggest ways healthy credit makes a difference is through mortgages. Having solid credit can allow people to purchase their dream home and get a better rate that could translate into hundreds of thousands of dollars in savings. 

Almost every mortgage bank will asses a borrower’s likelihood to repay a loan through their FICO score. The best rates for mortgages go to people with scores of at least 760. As your score goes down rates will go up, and eventually mortgages get outright denied if scores fail to meet a certain threshold depending on the loan. 

Here’s a hypothetical example that shows credit’s impact: 

Let’s say you have great credit and want to apply for a mortgage. According to FICO, with scores of 760 or better, the average interest rate is 3.56%. So if you applied for a $600,000 30-year fixed-rate mortgage your monthly payment would be $2,714. 

However, if your credit score was 100 points lower, the average interest rate would be 4.18%. At this point your monthly payment would jump up to $2,927. Compared to before, you would now end up paying $2,556 more per year, or over $75,000 more over 30 years. 

Even worse, if your score was in the low 600’s the average interest rate would be 5.15%. Compared to someone with a 760+ score, you would end up paying $203,400 more over the life of the loan! 

However, there’s no need to panic if you don’t know about your credit. The first key to good credit is understanding how it works. 

Here are the five factors that impact scores: 

• Payment history: It is factored by how timely you pay your bills, whether you have any past bills due/bills in collection, or if you’ve declared bankruptcy. 

• Credit utilization: It is factored by the balances you’re carrying on your credit cards compared to the limit on those cards. To have the best scores, you should be using less than 10% of the total and individual limits on your credit. 

• Length of credit history: It is based on the average age of the credit you have open. 

• New Credit: This reflects the number of credit card and other loan accounts you've opened, as well as any inquiries made about your credit recently. Having many hard inquires (or pulls on your credit score by others) can lower your score. 

• Types of Credit Used: This takes into account the different types of credit on your file. Having a variety of types of credit can sometimes help boost your score. 

You should also read my other articles on credit to get a better understanding of it (see them here:https://www.linkedin.com/today/author/36444445). Then you can take moves to correct your score. It’s a very good idea to speak with a reputable credit restoration company to assist with boosting your score. Using the right company can help you navigate the credit maze and see results in 20-50 days. 
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Owner and founder of North Shore Advisory Services, Inc. Study, analyze, decipher personal & business credit and scoring systems. Share knowledge with professionals about scoring systems and credit to provide them with cutting edge information for their clients. Have and continue to increase/improve credit scores dramatically (40-280 points) for consumers & companies to help them save in interest on loans, lines, leases, etc. Lead clients to present themselves in the most attractive light to lenders and creditors for varied types of financial products.
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Credit, Leadership, Public Speaking, Mortgage Lending, Negotiation, Social media, Loans, Customer Service, Management, Sales, Credit Analysis, Strategy, Fiance, Credit Scoring, Problem Solving, Team Leadership, Sales, and more
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Tracy Becker, Fico Pro
Introduction
For almost 25 years, I have owned and operated a Credit Education and Restoration Company. With an intense desire to help individuals/businesses reach their credit goals I have developed and cultivated an impeccable reputation and level of success. My company is known in the banking, real estate, accounting, & financial industry for our boutique style credit repair services which are second to none. Our credit improvement process has manifested results in as little as 20-40 days with increases as much as 40-150 points. With close to 25 years of credit expertise and experience in business, rest assured that with our programs clients will be getting the services of an expert staff committed to working towards their credit goals. We will use our vast experience to tailor a strategy which will offer the best possibility of producing results. North Shore Advisory, Inc. does not outsource personal information to third parties or offer any type of financing as many companies do. And because we stand by our record of excellence, we don't bill for personal credit repair for simply trying. We only bill for items we improve or remove. That's our guarantee.

I enjoy Public Speaking across the country where I educate bankers, CPA's, realtor's, financial planners, and all kinds of professionals, helping them find solutions to credit problems. I am a Certified Fico Professional and trained as a Credit Expert Witness with expertise in personal and business credit. I have published two books most recently, "Credit Score Power". I am also consistently interviewed for both national Television & major news publications where I regularly write/contribute. I am “The Credit Coach” for “Eye on Real Estate” a popular WOR710 AM radio show as well as the credit coach for Douglas Elliman.

Contact me: tracy@northshoreadvisory.com
And listen to me twice per month on the "Eye on Real Estate" radio show with host Dottie Herman CEO and President of Douglas Elliman: http://lnkd.in/wFT_Jh
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