The importance of the 6 Steps:
The Six Steps are important because they will encompass all 5 aspects used to calculate your credit score. Addressing just one area may provide improvement but it will only be for a short period of time. With each of these steps you will find your credit profile improving and gaining strength and soon - over time you will see a major improvement as well as long term stability.
The order of the steps are important to follow since each step builds on the previous one. You will more than likely find that some of the steps will not hold as much weight for you but this is expected. The steps are designed for review and action if need be. If each step is followed carefully you will see that you can improve your credit standing even if you have great credit!
So let's get into "The Six Steps to Credit Success"...
Step 1: Evaluate
The first step is a one on one consultation to review the information that is reporting on your credit report. Our highly trained credit consultants will review your credit report to evaluate the 5 aspects of your credit scores: Payment History, Debt Ratio, Length of Credit, New Credit, and Types of Credit.
During the evaluation we will help to find areas that your credit can improve and help determine what actions will need to be taken to be able to get you to your financial goals. This includes:
- Determining if your balances need to be paid down
- If new credit needs to be established
- If old accounts need to be used
- If you need to establish different types of credit
- Detailed review of the derogatory items reporting against you.
You will receive this FREE Credit Evaluation Report from us - even if you do not use our services!
Step 2: Establish
Your second step to credit success is to establish credit. This step is important early in the process so that the new credit will have a chance to report multiple payments while you complete the rest of the steps. During the establish step you can potentially be affecting 3 aspects of your credit scores:
- Debt Ratio - establishing new credit with large credit limits will decrease your debt ratio that affects 30% of your credit score. This alone can make a tremendous difference in your scores (but we don't want to stop there!)
- New Credit - if you have experienced credit problems 10% of your scores will be affected by re-establishing credit after the problems.
- Type of Credit - opening the right account can help the 10% of your credit score that is determined by the different types of credit you have available.
So if you need to establish credit make sure to follow the advice of your credit consultant to be sure that you get the most of your scores. Remember to keep your balances low for at least 45 days before you apply for financing, this will help to maximize your scores as well (see Credit Balances).
Credit Guys has partnered with several trusted lenders that can help you with second chance financing.
Step 3: Dispute
Your 3rd Step to Credit Success is for us to dispute the identified inaccuracies from your Credit Evaluation. The dispute process can affect your Payment History which constitutes 35% of your credit scores. During the dispute process we will look to make sure every identified account is accurate and verifiable. The Fair Credit Reporting Act tells us that if an account is inaccurate or unverifiable then it must be corrected or removed from the consumers credit report.
It is important to remember that not every derogatory item that is reporting against you is inaccurate or unverifiable and through the investigation process it may be found to be accurate.
Our average time for clients to go through the dispute process is over 4 months and we are currently seeing an average correction rate above 80% of the items disputed. Always keep in mind that every credit report is different and your results may vary - these are averages based on our previous clients.
Accurate and
verifiable information cannot be removed from a credit report and no one
(including us) can guarantee the removal of any specific item or
guarantee a specific credit score.
Step 4: Settle
The 4th Step to Credit Success is to settle outstanding derogatory debt. The reasoning for settling after Step 3 (Dispute) is so you have a list of the derogatory debt that is accurate and verifiable to settle. During this process you will talk with the creditors to see if you can reach an agreed upon amount to pay for the debt.
This step is highly overlooked and often skipped but it is also very important that you pay the debt that is owed. There may be some debt that you feel is unfair to pay but it is more unfair for it to be negatively affecting you for up to 7 years as well!
If you are in a position to settle your debt but do not have the time or emotional capacity to handle the process we do offer Debt Negotiation services to take care of this for you.
Step 5: Save
This step is our favorite one of all! At this point you have really made some tremendous headway and it is time move forward to start to reach your goals. The reason we call Step 5 Save is because sometimes it is easy to get a little short sighted in the focus of our goals and we don't step back and look at the entire picture.
Step 5 is the time to apply for financing. You are going to want to check your financing in several areas to see how much money you can save. Here are some of the areas that we recommend that you look for savings:
- Purchasing or Refinancing your home
- Purchasing or Refinancing your automobile
- Consolidating your credit cards into 1 low interest card
- Re-applying for insurance
We have seen clients save over $250 a month through this step - can you afford to not follow our 6 Steps to Credit Success?
Step 6: Equip
The final step is the long haul of the steps. Here is where you are going to focus on the long term success of your credit using the tools on this site as well as in your Personal Credit Portal provided to all our members. Setting your budget and reviewing it every 2 or 3 months will help you to maintain long term success and financial freedom.