How to quickly improve your credit rating if you find yourself in a debt hole or scammers have taken out loans in your name

If you don’t know where to start living in the USA, take out a loan. No jokes! A credit rating is the financial calling card of any American resident. It determines how we are viewed by banks, landlords and, in some cases, employers. To build a good credit history, it is advisable to take out several types of loans from different banks. The main rule is that what is borrowed must be returned on time.

Photo: iStock.com/MCCAIG

You can end up on the list of debtors and those with a very low credit rating not only because of irresponsibility or forgetfulness. Often people fall into debt due to job loss, unexpected illness, or the actions of scammers. But whatever the reason, something needs to be done about the disastrous result. About, how to quickly increase your credit rating and cope with debts, ForumDaily spoke with Natalya Dokim, a specialist in debt settlement and credit rating restoration at the company My Credit Score 750.

What credit rating is considered good?

Let's start with the basics: a credit score is a three-digit number that reflects your financial reliability and responsibility in the eyes of the American banking system. It is influenced by many factors, but in general, the more actively you use credit and repay debts on time, the higher your credit score will be.

Check your credit score for free can on Credit Karma website. How to interpret what you see there? It's quite simple. Points are divided into five groups:

• 800-850 - exceptional credit rating. This is the highest level, and if you saw such numbers in your account, you can be proud of yourself. By the way, 23% of US residents have such a credit rating.
• 740-799 - very good.
• 670-739 - good.
• 580-669 - satisfactory. It's like getting a C grade in school. Not critical, but not particularly good either.
• 300-579 - bad. 16% of Americans have this rating; it’s difficult for them apply for a loan и rent a house.

If you find yourself in the last two categories, sign up for a free consultation with Natalia Dokim! She will analyze your situation and suggest ways to deal with debts и improve your credit rating.

Why is it important

Credit rating in the USA They check not only in banks. Do you want to rent an apartment? Provide the homeowner with a credit score. And if it's low, you may be asked to pay several months in advance or look for other housing. Do you want to work with money? Show your employer your credit score. If it turns out to be below average, you will have to look for other employment options.

These three numbers are even more important when trying to take out a loan from an American bank. The interest rate on a mortgage in the US or on a car loan directly depends on your credit rating - the higher it is, the lower the rate will be and the less you will pay for using the bank’s money.

The table below shows the average interest rate for a 30-year mortgage as of March 2024.

If you don't think the difference between 8,3% and 6,7% is that big, let's calculate it in real dollars.

For example, you looked at a house for $300 thousand, paid 20% of the amount, and took out a mortgage for the remaining $240 thousand.

If you have a low credit score and an interest rate of 8,267%, you will pay $2070 each month and pay $410 in interest by the end of the loan term.

And if you have an exceptional credit score, the mortgage will have a rate of 6,678%. The monthly payment will be $1809 and the total interest will be $316.

That is, thanks to a good credit rating, you will save $93. With this money you can make repairs or buy a couple of cars.

Calculate approximate monthly mortgage payments will help calculator from Bankrate.

When buying a car on credit the same system works.

What ruins your credit rating?

The short answer is debts and late payments incurred by you or attributed to you by mistake or due to fraudsters.

How to write off credit card debt

Most often, people are dragged into the abyss of credit card debt. A large credit limit gives a false sense of financial security, because you can pay off the debt in installments. But interest accrues, debt grows, and paying off the loan in installments turns into an endless quest.

Credit debt over $20 thousand is not only overwhelming, but also puts you in a position where, by making only the minimum payments, you will be able to pay off the debt no earlier than in 20 years. And this is even if you are lucky enough not to lose your job or get sick during all this time .

But you don’t have to drag yourself into a debt quest with minimal payments. There is a law that allows write off credit card debts.

“There is a federal law that protects debtors, and that's not bankruptcy. I may find errors on your credit card statements. In this situation, the credit card company has a limited time to correct the error. And if she violates this deadline, and therefore the federal law, in most cases she will lose the right to collect the overdue debt,” explained Natalya Dokim.

Few consumer protection specialists know how to correctly navigate such issues, so sign up for free consultation to Natalia Dokim to find out if you are eligible to participate in this program that helps cancel credit card debt.

Medical debt and credit score

It's not just debts to the bank that threaten your credit rating. If you don't pay medical or utility bills for a long time, they can also ruin your financial reputation.

“Hospitals do not themselves report customer debts to credit bureaus. That is, if you resolve the issue quickly, the debt will not affect your credit score. But if you delay, the debt will be handed over to collectors, and they will definitely report it to the credit bureau,” said Natalya Dokim.

Although there are nuances, much depends on the amount and duration of the medical debt. In general, this is an individual question, and it is better to discuss your specific situation with a specialist. Natalya Dokim provides free 15-minute consultations.

Photo: iStock.com/anyaberkut

Identity theft

The most frightening and unpleasant reason for a bad credit rating is identity theft. Fraudsters can issue loans in your name, and you won’t even know about it, at least for some time.

Ukrainian Dima Solovey visited the United States several years ago under the Work and Travel program. He only used a debit card, and then closed all his accounts and left for his homeland. A couple of years later, Dima won a green card and returned to the United States, where he tried to get a credit card. But the bank, citing “serious debt and too many open credit accounts,” refused him.

It turns out that the fraudster stole Dima’s personal data during his previous stay in America and issued several loans to him for almost $15 thousand.

You can find out how Dima's story ended here, but believe me, sometimes it can be much worse.

“When we think about identity theft, we often imagine hackers breaking into our accounts or stealing our personal information. However, the disturbing reality is that identity theft often occurs in families, especially between parents and children or spouses. In particular, this type of theft is common during a divorce, especially if one spouse is awaiting a green card. In such delicate situations, victims of identity theft often feel completely helpless,” said Natalya Dokim.

It is difficult to even imagine what an emotional roller coaster a person goes through when he finds himself in a difficult financial situation due to the vile act of a loved one whom he considered his support and support.

Natalya Dokim will find a way out of this delicate situation, will get rid of debtsarising due to the actions of the spouse, and will refer you to an immigration lawyer specializing in such cases - he will help get a green card based on financial violence. Sign up with Natalya Dokim at free consultation for debt repayment and credit repair.

As you can see, survive in America without a credit rating it is possible, but it is not easy. A good credit score opens the way to cheap loans and profitable rental housing. So keep your finances in order and aim for a credit score above 670. And if anything goes wrong, contact Natalia Dokim from My Credit Score 750 — she will teach you how to deal with debt and improve your credit rating, or she will take over this task entirely.

Read also on ForumDaily:

Four unforgivable mistakes immigrants make to the United States

Six ways to cut your medical bill in the US

Living on credit: Americans' debts have exceeded a trillion dollars and continue to grow

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