Building Credit

Facts

• 68 million people have poor credit.
• 1 in 5 people (40 million) have an error on their credit report.
• In 2018, the credit repair industry earned over 3 billion dollars.
• 79% of people who disputed errors on their credit report were successful in removing them.
• Because of the importance credit plays in our lives, everyone wants good or great credit.

Credit Score

What is consider good credit and bad credit?

One of the most well-known types of credit score are FICO Scores. These scores are used by many lenders and range from 300 to 850 points. Individuals with 800 scores or greater are considered to have the BEST credit.

• BEST credit range: 800-850
• EXCELLENT credit range: 750-799
• GOOD credit scores range: 700-749
• FAIR credit score range: 650-700
• POOR credit score range: 600-649
• BAD credit score range: 300-599

Whole Score

Repairing your credit is easy because there is a basic formula that scores are calculated by. Every person starts off with 300 points. There is a total of 550 points that is available to achieve a perfect score.

• Payment History accounts for 35% of the score of which there is a total of 192.5 maximum points.
• Credit Utilization accounts for 30% of the score of which there is a total of 165 maximum points.
• Credit History or Length of History accounts for 15% of the score of which there is a total of 82.5 maximum points.
• New Credit accounts for 10% of the score of which there is a total of 55 maximum points.
• Credit Mix accounts for 10% of the score of which there is a total of 55 maximum points.

Many credit repair companies focus solely on payment history which helps but won't give you the maximum advantage. The myCredit System has the advantage in that it addresses the whole score which includes all 5 factors. Over the next few slides, I will share with you how the myCredit System addresses all 5 factors.

Payment History

35% or 192.5 max points

Solution: Four letters

1. Debt Validation Letter

2. Method of Verification Letter

3. Violation of FCRA Rights Letter

4. Intent to Litigate Letter

There are a few other letters that can be used depending on your situation.

The solution for payment history is centered around four letters that are often called 609 letters. These letters address a consumer’s rights under Section 609 of the Fair Credit Reporting Act that states credit reporting agencies are required to only report verifiable information and provide the consumer with proof of verification if requested.

• Debt Validation letter - the FCRA states that you have a right to request that the CRA's validate that the debt that you are disputing is yours.
• Method of Verification - the FCRA states that if a CRA validates your debt, you have the right to ask them for proof of verification.
• Violation of FCRA Rights - this letter reminds the CRA that they have not provided proof of verification that was used to validate your debt. Therefore, according to the law, they must remove the debt off of your credit report.
• Intent to Litigate - this letter is the last letter sent, notifying the CRA that you have exhausted your means of disputing the debt and that they have not proven their method of verification. You are notifying them that your next course of action is to sue for violation of your FCRA rights.

This complete process could take 30 - 120 days to complete. There are additional letters in our kit that are also available. (goodwill, pay for deletion, medical bill, tax lien, etc.)

Credit Utilization

30% or 165 max points

Solution: Pay Down Revolving Debt

1. Debt Elimination

2. Increase Credit Limit

3. New Credit

Solution 1 pays down revolving debt. Solution 2 & 3 lowers credit utilization by increasing credit limit.

We are now going to tackle the area most credit repair companies ignore.

Credit Utilization counts 30% towards your credit score. This means credit utilization is almost as important as payment history.

Credit utilization is the ratio of your outstanding credit card balances to your credit card limits. It measures the amount of credit limit you are using. For example, if your balance is $300 and your credit limit is $1,000, then your credit utilization for that credit card is 30 percent.

To fix credit utilization you either pay down your revolving debts or increase your revolving credit limits. If you have bad credit, increasing credit limits may not be an option.

The major thing to understand is that revolving debt is what credit utilization is based on, not installment debt. Pay down your revolving debt and you will see an improvement in your credit utilization.

Credit History

15% or 82.5 max points

Solution: Authorized User

1. Find a relative or friend with a credit card with good history.

2. Asked to be added to their account as a authorized user.

Credit History accounts for 15% of your score. The quickest and easiest solution is to become an authorized user of someone who has a credit card with great payment history and low credit utilization.

You do not need their card to inherit their payment history. They can simply add you as an authorized user and have the card sent to them where they can destroy the card so that they are assured you cannot charge anything on their account.

New Credit

10% or 55 max points

Solution: Adding Tradelines

1. Department Store Cards

2. Secured Credit Cards

3. Rental History

4. Credit Builder Loan

Credit builder loan helps you build your credit and emergency fund simultaneously.

10% of your credit score will be based on your ability to get new credit. However, this can be a challenge if you have a low credit score.

Consider doing one of the following:

● Apply for a department store card. If your credit isn't too bad, you may be able to get approved.

● Apply for a Secured Credit Card. Put $500 - $1000 on a secured credit card and use that card to build new credit.

● Convert your rental history into credit with our Rental History credit building program.

● Get a credit builder loan. This is probably your best option. The bank opens a certificate of deposit (CD) in your name for $500 - $1000. The bank freezes the CD and charges you monthly payments until the balance is paid off. Your payments are reported to the credit bureaus. The bank unfreezes the CD once the loan has been paid.

This process helps you in two ways. First, new credit is added to your credit report with history of on time payments. Secondly, by default, you build an emergency fund.

The myCredit System provides you with an excellent lending program for the credit builder loan.

Credit Mixture

10% or 55 max points

Solution: Applying for Credit

1. Revolving Debt

2. Installment Debt

Once you complete the first 4 credit scoring factors, you will have credit mixture. 3 Active revolving to 1 installment is ideal mixture.

The final 10% of your score is credit mixture.

You must have a mixture of revolving debt (credit card) and installment debt (car, mortgage, credit builder loan).

If you complete the first four scoring factors, you will automatically have the this one complete.

The authorize user gives you the revolving debt while the credit builder loan gives you the installment debt.

OFFERING

The myCredit System offers:

● 26 DIY videos – each video is 3 – 5 minutes in length.

● 4 Rounds of Dispute Letters – these are the 609 letters and we also include other dispute letters that you may need depending on your personal circumstances.

● Income Shifting Strategy – this is what separates us from the crowd.

● Debt Elimination Software – this software gives you a debt elimination blueprint.

● Minimize Expense Calculator – this calculator helps you look for holes where you may be losing money. Plugging these holes can help you pay down your debts faster.

● Re-established credit sources – Learn where to go to find the best credit cards and best credit builder loan programs.

● Investment calculator – once your credit has been fixed and you have become debt free, the next step in financial freedom is investing.

● Business Opportunity – you can change your credit with our program, but you can change your life with the business opportunity. Earn a few hundred dollars a month or earn a full time income helping others with their credit. The choice is yours.

OR

Sign up for a Credit Builder Card below to begin building or rebuilding your credit!