Credit Reports

What Are Judgments & How Do They Affect Your Credit? A judgment is a court ruling stating that you legally owe money to a creditor or debt collector. While credit bureaus no longer report judgments, lenders and collection agencies still have access to court records, and unpaid judgments can still impact your financial future.   Types of Judgments That Can Affect Your Credit Civil Judgment – A court ruling that you owe money to a creditor. Default Judgment – Issued if you fail to appear in court after being sued. Vacated Judgment – A judgment that has been overturned or dismissed. Satisfied Judgment – A judgment that has been paid in full but still appears in records.   How Judgments Affect Your Financial Future Legal Consequences – A judgment can lead to wage garnishment, bank levies, or property liens. Credit & Loan Approval Issues – Lenders may still check court [...]

How Medical Collections Affect Your Credit & What’s Changing Medical bills are one of the most common reasons people end up with collections on their credit report. Even small medical debts can lower your credit score and impact loan approvals, interest rates, and financial stability.   New Medical Debt Reporting Changes (2023 Updates) 📌 Paid Medical Collections Must Be Removed: As of July 1, 2022, credit bureaus must remove paid medical debt collections from your credit report. 📌 Medical Debt Under $500 No Longer Reported: As of April 2023, medical debts under $500 are automatically removed from credit reports. 📌 Medical Debt Grace Period Extended: Unpaid medical debt must be at least 1 year old before it can appear on credit reports (previously 6 months). 🔹 These changes mean millions of people can see immediate credit score improvements! If medical debt is still on your credit report, it may be [...]

What Is a Collection & How Does It Affect Your Credit? A collection account appears on your credit report when a past-due debt is sold to a collection agency. This significantly lowers your credit score and can make it harder to get loans, mortgages, or credit cards.   Types of Collection Accounts Medical Collections – Unpaid medical bills sent to collections. Credit Card Collections – Credit card debt turned over to a collection agency. Utility & Telecom Collections – Unpaid phone, internet, or utility bills. Loan & Auto Loan Collections – Defaulted personal or auto loans. Rental & Lease Collections – Unpaid rent or lease termination fees.   How Collections Affect Your Credit Score Major Credit Score Drop – Collections can lower your score by 50-150 points. Loan & Credit Approval Issues – Lenders hesitate to approve new credit applications. Higher Interest Rates – If approved, expect higher rates on [...]

What Is a Foreclosure & How Does It Affect Your Credit? A foreclosure happens when a lender repossesses a home due to missed mortgage payments. It is one of the most damaging negative marks on a credit report and can impact home-buying ability, credit approvals, and financial stability for years.   Types of Foreclosures Judicial Foreclosure – Requires a court process, common in most states. Non-Judicial Foreclosure – Handled by lenders without court involvement, based on state laws. Voluntary Foreclosure (Deed in Lieu of Foreclosure) – Homeowner surrenders the property to the lender to avoid a formal foreclosure.   How Foreclosures Affect Your Credit Score Major Credit Score Drop – A foreclosure can lower your score by 100-250 points. Home Loan Restrictions – Most lenders require 7 years after foreclosure before approving a new mortgage. Higher Interest Rates – Even after the waiting period, lenders may charge high interest rates. [...]

What Is Bankruptcy & How Does It Affect Your Credit? Bankruptcy is a legal process that allows individuals to eliminate or restructure debt when they cannot repay their obligations. While it provides relief, it also has a severe negative impact on credit scores and remains on your credit report for up to 10 years.   Types of Bankruptcies & Their Credit Impact Chapter 7 Bankruptcy – Liquidates assets to clear unsecured debt (stays on report for 10 years). Chapter 13 Bankruptcy – Sets up a repayment plan over 3-5 years (stays on report for 7 years).   How Bankruptcy Affects Your Credit Score Major Credit Score Drop – Bankruptcy can lower your score by 100-250 points. Loan & Credit Approval Issues – Many lenders won’t approve new credit applications. Higher Interest Rates – If approved, expect extremely high rates. Security Clearance Risks – Can affect government & military job approvals. [...]

What Are Late Payments & How Do They Affect Your Credit? A late payment is reported when you miss a payment by 30 days or more. Payment history makes up 35% of your credit score, making late payments one of the most damaging factors to your credit. Late Payment Categories 30 Days Late – Minimal impact but still affects your score. 60 Days Late – More significant impact and red flag for lenders. 90+ Days Late – Major damage; can lead to charge-offs or collections.   How Late Payments Affect Your Credit Score Credit Score Drop – Late payments can lower your score by 50-180 points. Loan Approval Issues – Lenders hesitate to approve new credit. Higher Interest Rates – If approved, expect higher rates on loans & credit cards. Security Clearance Risks – Late payments can affect government & military jobs. Late payments stay on your credit report for [...]

What Is a Hard Inquiry & How Does It Affect Your Credit? A hard inquiry (hard pull) occurs when a lender checks your credit report to approve a loan, credit card, or financing request. Hard inquiries temporarily lower your credit score and remain on your report for 2 years. Types of Credit Inquiries ✔ Hard Inquiries – Impact your credit score and occur when applying for: Mortgages Auto loans Credit cards Personal loans Business financing ✔ Soft Inquiries – Do NOT impact your credit score and occur when: Checking your own credit Employers run background checks Pre-approvals for loans or credit cards   How Hard Inquiries Affect Your Credit Score Temporary Credit Score Drop – 2-5 points per inquiry. Loan Approval Impact – Too many inquiries signal high financial risk. Stay on Credit Report for 2 Years – But only impact scores for 12 months. Security Clearance Risks – Excessive [...]