Frequently Asked Questions

  • Secured Credit Cards are an excellent way to establish (or re-establish) your credit. They require lesser scrutiny due to the security deposit being paid upfront. If you can maintain the card with regular transactions and timely payments, it gets added to your credit report and effectively improves your credit score. As long as you maintain credit balances below the security threshold, chances for the account to be sent for collection are also less.
  • Though many “credit repair” companies may claim so, the truth is: there is no overnight solution to improving your credit score. Calculating credit scores is a complicated process, and even the fastest measures may take months to reflect. Start by checking your credit report for errors. The next step is to pay down your credit balances to lower your credit utilization ratio. Settle accounts that are in collections and make your delinquent accounts current. With these changes, you can see significant improvement in your credit score in 30-90 days. Learn More.
  • Different lenders use credit scores from various agencies to evaluate your creditworthiness. There is no universal magic number that can take you across the threshold. A 660+ score on the FICO scale is generally considered good, but that is no guarantee of acceptance. The lenders try to judge you by your sense of responsibility and your capacity to pay the mortgage on time. A higher credit score can only indicate better pay-off terms for your mortgage, but it’s the lender who accepts/rejects your application.
  • Your credit score is the culmination of all loans and credits that you borrow from others (lenders). This is not the case for overdrafts. Debit cards pull money from checking accounts. So even if you spend more than your account balance, you are not practically borrowing money from anyone. You may incur an overdraft fee, but it doesn’t impact your credit score in any way.
  • The trick to building your credit reputation from scratch is to start small. Do not jump to buying a house or leasing a car with zero credit. You could become an authorized user of an existing credit account, like a family member’s credit card. Apply for a secured credit card, which has lesser scrutiny in terms of credit score. Build your credit score gradually by paying utility and cell phone bills from your account every month. Improve your credit score by enrolling in our Reset Your Debt program.

  • Usually once a month or when your lender provides new information to the credit report agencies. The credit bureaus operate on 30-day cycles.
  • Contrary to popular belief, most credit reports do not contain the holder’s credit score. To check your credit score, refer to places like your credit cards, loans, and other debt instruments. Check their monthly/quarterly/yearly statements. Major credit rating agencies also allow you to purchase your credit score directly. Or there are plenty of online tools that can do it for a minimum fee or for free. Beware of scams.
  • Payment history is the most weighted factor (35%) in determining your credit score. Even one late payment can hurt it badly. Other factors that affect it are credit utilization ratio (30%), the length of your credit history (15%), your current credit portfolio mix (10%), the number of newly opened credit accounts (10%), and hard inquiries connected to them. Foreclosures, bankruptcy, repossession, charge-offs, and settled accounts can also negatively impact your credit score. Learn More
  • Firstly, there is no one universal number to quantify the credibility of potential finance applicants. Different Credit Rating Agencies (CRA) evaluate credit risks through complex formulas involving multiple criteria varying from payment history, credit utilization, affordability, electoral roll registration, and many more. FICO designates 850 (100%) as the “perfect” score, and anything above 700 is considered “good.”