Tag Archives: credit repair

How many ways can credit scores cost me money? What can I do about it?

The Consumer Federation of America “(CFA) is an association of non-profit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization’s Board of Directors.[i]” The CFA studies consumer behavior and uses focus groups to follow economic trends and how public policy can affect consumers. The use of credit and the cost to consumers when they have low credit scores is a particular area of inquiry for the CFA. Creating pro-consumer policies and increasing communication and awareness about credit issues is a focus of this service organization.

The recent survey and release of findings on credit scores and the costs to consumers

The CFAs sixth annual survey of credit scores today, was released June 13, 2016. The survey findings indicate that over 80 percent of consumers do not understand some basic facts about their credit scores. The following are highlights of the survey as reported in the CFA press release:

  • Credit scores are used by mortgage lenders (88%) and credit card issuers (87%).
  • Key factors used to calculate credit scores are missed payments (91%), personal bankruptcy (86%), and high credit card balances (85%).
  • Ethnic origin is not used to calculate these scores (believed by only 12%).
  • 700 is a good credit score (81%).[ii]

The findings show that the Millennial generation have less an understanding of the credit scoring system when compared to Generation X.

What consumers do not know, can cost them money

A low credit score can affect many aspects of a consumer’s day to day life. Not only is your credit score used to determine the percentage rate you would pay on a car or home loan. The insurance rates you pay can be significantly higher than your neighbor with the higher credit score. When the insurance companies consider a consumer with a low credit score (something under 620) they figure that individual is more likely to file multiple insurance claims, and the statistics back it up.

Many people with low credit scores have more difficulty financing a home and renting is their only option. More bad news for renters with low credit scores – expect to pay a higher security deposit when renting a home or apartment. The assumption is that people with low credit scores have a hard time paying their bills, so the rental owner wants more money on deposit in case the renter with the low credit score cannot pay their rent.

Today is the day you can start learning more about credit and how to maximize yours

By reading this article and the CFA press release, you will know more about credit than many others out there. Here’s something else to be aware of, advocates for reform want more protection for consumers so their lives are not determined by credit scores. If you do some research on the Internet, you can learn how to write your local legislative representatives and tell them you want them to take better care of consumers with protection laws that prevent big companies from charging you more money due to your credit score.

Next steps in repairing, boosting and making your credit score bulletproof

Well, we can’t really make your credit rating bulletproof, but there are several ways you can improve your score and keep it there. If you are underwater on all your payments and your scores suffer every month with negative reports, a Chapter 7 or 13 bankruptcy can help you wipe out the debts you cannot pay and give you a fresh start. Rebuilding your credit is much easier when you are not behind the eight ball. We can connect you with credit repair companies who use advanced systems to wipe out negative debt and “zombie” debts that may be hurting your score. When you also consider secured credit cards, credit unions and more, you can really take control of your credit, save money and live the way you deserve!

 Joseph Wrobel, Ltd., works with clients on consumer issues including bankruptcy and they can offer additional information to find out if you qualify for Chapter 7 or 13 bankruptcy, and your options and rights under the law. The firm will also advise and assist clients with best credit repair options.   

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start.

Don’t forget to keep up with us on Facebook, Twitter, LinkedIn and Avvo, where you can read client and peer reviews!




[i] Consumer Federation of America, website, About CFA

[ii] Consumer Federation of America, 6th Annual Credit Score Survey Reveals Large Majority Know Credit Score Basics But Don’t Understand Important Details, Jun. 13, 2016 press release.

Memorial Day 2016 Chicago Bankruptcy Question and Answer Podcast with Joseph Wrobel

Chicago bankruptcy and consumer credit attorney Joseph Wrobel shares news and updates in bankruptcy law as well as business and consumer financial matters. It has been documented that financial troubles can cause all sorts of ailments, the most common of which is sleeplessness. Joseph Wrobel helps clients alleviate their anxiety created by the inability to pay bills and the embarrassment of financial distress.

Click/tap here to listen to the podcast

Sample questions answered in this 30-minute show:

  • Can I convert from a Chapter 7 to a Chapter 13 bankruptcy if I made the wrong filing?
  • Is there a way to stop a garnishment and get a payment plan without filing bankruptcy?
  • Will the bankruptcy trustee sell my house in order to pay off any of my debts?
  • How can I file for Chapter 7 with damaged credit and little or no student income?

Joseph Wrobel has been a practicing attorney since 1973 and has experience in a wide variety of law relating to legal matters for individuals and families. Wrobel helps clients get out of debt and get a fresh start. He is an active member in several bar associations and the Bankruptcy Panel of Pro Bono Program of the Chicago Volunteer Legal Services. After serving the U.S. Army Reserve 363rd Civil Affairs Unit, Wrobel earned a B.A. in Psychology from Northwestern University and in 1973, he earned a JD from DePaul University Law School.

Don’t forget to keep up with us on Facebook, Twitter, LinkedIn and Avvo, where you can read client and peer reviews!

Visit our Chicago Bankruptcy website online for more about the firm or call for more information at (312) 781-0996 or e-mail at JosephWrobel@ChicagoBankruptcy.com.

Understanding and improving your credit score before or after bankruptcy

Understanding how your credit score works requires knowledge about how the credit system works and how lenders use your credit score. There are three companies, Experian, Equifax and Trans Union, and they collect your credit use and payment history and calculate your credit scores. Based on several elements of your credit patterns, your scores from each agency will range from an extreme low of 200 to an extreme high of 850. The average credit score among most people is 711. When your score is 740 and higher, you will likely receive the best interest rates on credit cards and consumer loans. If however, your score is 620 and lower, approval is less likely, and when approved for a credit card or consumer loan, your interest rate will likely be much higher. The interest on a credit card or loan can vary from five to 20 percent based solely on your credit score.

Your frequency of credit use and amount of credit allowed versus used is important to your score.

There are several activities and factors that affect your credit score. The amount of open credit card and loan accounts is a factor in your score. If you have several open credit accounts you are not using, or you have not opened a new credit account in many years, your credit score can suffer. The loan balance to loan amount is another factor in your credit rating. The more you pay down a loan, the better you can affect your score. A ratio of credit offered and credit used is important, especially with credit cards. If you have a credit limit of $1,000 you should keep your monthly spending around 30 percent ($300), which is a general rule, not using your credit limit and using up all your available credit are both harmful.

Get the free copy of your credit report and challenge the errors, or use a credit repair company.

Order a free copy of your credit report and decide how to take action or hire a credit repair company to do it for you. There is a free credit-reporting website (www.AnnualCreditReport.com) you can use to generate your full credit report. Most people have some inaccuracies or wrong information on their credit report. Reviewing all the information and challenging anything that looks like an error is a quick way to increase your credit score. Additionally, there are credit repair agencies you can hire to fix your credit for you, using all their tools and knowledge.

Obtaining secured credit cards is easy, use several and pay the fixed monthly bills.

Using credit cards and loans is a great way to improve your credit score when you follow a few basic rules. Paying your credit card on time every month is imperative to demonstrating credit responsibility. The more credit cards you have in current responsible, the better your score should be. It is a good practice to pay your fixed monthly bills with a few credit cards and pay them off every month. If you recently filed for bankruptcy or do not have a credit card, the secured credit card can help you start repairing your credit immediately. When you go to a local major bank, bring $300-600, deposited into a savings account connected to a normally functioning secured credit card. You receive and pay your bill on time every month and your credit improves. The bank may refund some or all of your deposit money once you demonstrate a positive payment history. If you never pay the bill, the bank will use your deposit to pay the bill.

Joseph Wrobel Ltd., can get your debts partially or fully wiped out and help you with credit rebuilding.

If you take advantage of the bankruptcy laws and discharge some or all of your debt, your credit card companies adjust the status of those debts and should reflect the new amount owed, if anything, but the credit reporting agencies do not always reflect the discharge. Joseph Wrobel, Ltd. has relationships with credit repair experts who can help challenge credit errors, assist in the clean up, and credit rate increase process. It is important to remember that good credit has less to do with what happened before the bankruptcy and everything to do with how you use and build credit afterwards.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can “Like” the firm’s Facebook page and “Follow” Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney today.

Credit scores, cards and reports: What you might not know

Credit cards and our credit scores have become parts of our lives and daily business to the extent that losing them can paralyze people experiencing financial hardship. Financial troubles leading people towards a bankruptcy filing are not always the individual’s fault. A divorce, injury or job loss can happen and leave good people in peril with their credit scores and credit cards. There is a saying among bankruptcy attorneys – what happens after the bankruptcy is more important than what brings the client to seek bankruptcy in the first place. There are plenty of options to restore credit and the ability to make online payments. Do not give up and throw in the towel or go off the grid because creditors suggest that if you file bankruptcy you will never be able to swipe a tank of gas or cover an emergency expense.

Why is credit important and why do we need credit and debit cards to pay?

Fair or unfair as it may seem, the American system of issuing credit is what keeps the economy moving. Do you remember the problems our country experienced at the beginning of the recession? One of the biggest problems was failure and refusal of banks to issue credit for consumer goods, homes, cars, and to businesses with fixed expenses. The method of payment nowadays is plastic. We pay our bills online and over the phone using debit and credit cards. When was the last time you went to a local utility to pay with cash or check? The reality is that it is easier and sometimes only possible to pay using plastic. People considering bankruptcy should know there are easy alternatives to what we often think about when talking about credit and debit cards.

Filing for bankruptcy in most cases will not affect most people’s checking accounts and the debit cards used to pay for bills and daily expenses. If however, the account is overdrawn and no payment is made, the account can be sent to collections and opening a new account could be difficult. An alternative is the pre-paid debit cards now offered by many banks. They work just like a traditional checking account based debit card. A difference can be that the pre-paid cards, just like gift cards, prevent the user from overdrawing the account. Prepaid debit cards holders can access their accounts online, deposit, withdraw funds, and continue despite credit and bank account options.

Pre-paid credit cards, also known as secured credit cards, are similar to prepaid debit cards with the exception that the applicant prepays a certain amount (often under $500) and that money is held in a separate savings account. The card is “secured” by the deposit and the use may proceed to use the card just like a regular credit card and pay the monthly bills. If the bill is not paid, the deposit is forfeited. A major benefit of the pre-paid credit card is the positive effect on the credit score. If the person is in a bankruptcy and some of the immediate financial pressure is off, it is easier to use the pre-paid credit card for common monthly bills. As the credit card is used and paid in a responsible manner the credit score should improve.

Getting back on track can also include challenges to inaccuracies on credit reports.

In cases where damage to credit scores are a provable fault of another, the damage to the credit score can be translated to a specific dollar amount using a credit damage expert who prepares a report for court hearings where the credit damage is at issue. There are also credit repair companies who, for a reasonable fee, help people find and attack inaccurate marks on a credit report including something referred to as “zombie debt,” which often indicates collection amounts that are frequently bundled and sold among collection companies. Note that debt repayment companies offer different services and it is important to get the right answers before making important decisions that can affect the future.

How can Joseph Wrobel help?

Joseph Wrobel and the attorneys at Joseph Wrobel, Ltd. have relationships and can help clients with everything from stopping harassing collector calls to helping clients get new forms of debit and credit cards to keep moving and paying bills as well as attack bad credit report marks and scores.

If you want to learn more about bankruptcy and credit management, contact an attorney at Joseph Wrobel, Ltd. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need legal assistance, please call Joseph Wrobel, Ltd. by dialing (312) 781-0996 to talk to an attorney.