What Does Your Debt-to-Income Ratio Say About You?

Your debt-to-income (DTI) ratio is the percentage of your monthly income that you use to pay your debt and the amount of income you have left over after you have paid all of your bills. Creditors use your DTI ratio to get a better understanding of how your current debt impacts your finances and your ability to afford more debt. If your DTI ratio is too high, you could be a seen as a risky borrower. A lower DTI ratio can make you look appealing to creditors, but it can also mean that your finances are freed up to save for the future. Here is everything you need to know about your DTI and what it says about your finances.

Regularly calculating your DTI ratio is a good way to stay on top of your finances and make sure you have set a reasonable budget for yourself. In order to calculate your DTI ratio, add up all your monthly payments you make to pay off debt: credit cards, personal loans, student loans, mortgages, car loans, etc. Then you will divide this number by your gross monthly income (your income before taxes). Then you multiply this number by 100 to turn it into a percentage. So if you put $2,000 towards debts per month and your monthly income is $5,500 before taxes, your DTI ratio would be 36.37%.

What does your DTI ratio say about you?

While every lender has different criteria for what makes a good DTI ratio, these are some general guidelines for how your DTI ratio will impact your creditworthiness:

  • DTI ratio below 36%: You will likely not be considered a credit risk by almost any lender. You probably have the means to pay your debts as well as contribute to savings and investments.
  • DTI ratio between 37% and 49%: Some creditors may consider you a risky borrower, but others may be ok lending to you. You can likely pay your debts but may struggle to save money or generate wealth through investing.
  • DTI ratio above 50%: Most creditors will consider you a borrowing risk. This can make it difficult to obtain new lines of credit. You may be struggling to pay down your debts.

If you find yourself falling in the 37% to 49% range with your DTI ratio, your financial wellbeing could be at risk. This high DTI ratio can make it difficult to pay for emergency expenses or to handle sudden financial changes like a loss of income or a medical emergency. In order to lower your DTI ratio, you need to reduce your debt and/or increase your income.

The best way to get rid of debt quickly is to make more than the minimum payment every month. If you are struggling to make the minimum payments and feel like you need additional help, seeking debt management services may be the right path for you. It is better to get ahead of your debts early before they snowball into a worse situation.

If you are concerned about a high debt-to-income ratio or are struggling to pay off your debts, Veitengruber Law can help. Our debt management solutions are catered to fit your specific needs. We can help you understand your options and work towards your financial goals.

Can Co-Signing a Loan Affect Your Credit Score?

When you co-sign a loan, you have a lot to lose and little to gain. As a co-signer, you are legally responsible for repayment of the entire loan, even if the main borrower stops making payments. It is very important to ONLY co-sign with someone you trust and with whom you have open communication. In the event that the borrower stops making payments, your credit can be damaged. Luckily, Veitengruber Law has had great success helping our clients mitigate the damage caused specifically by co-signing for a borrower who left them holding the bag. The first thing we do is have our clients follow these four steps:

1. Resume Monthly Payments

If it is still possible, resume the monthly payments on the loan. The loan might be for something that does not directly benefit you in any way, but in order to protect your credit, you should make timely payments if possible. Payment history—that is, on time payments made in full—is one of the most important parts of your credit report. If your co-signer misses one or more payments, your credit score can quickly start dropping. To lessen the damage, resume payments ASAP.

2. Pay Off the Loan in Full

If you can afford it, paying off the full amount of the debt owed can actually increase your credit score. The amount of total debt you possess is another huge factor that goes into determining your credit score. The less debt you have, the more your score will increase. You can gain back points you lost for missed payments by eliminating that debt completely.

3. Talk to the Creditor

Credit reporting agencies can only report what your creditors tell them. Ask the loan company if they will work with you to limit the damage to your score. They may report your account as in good standing if you agree to pay off the debt in full, or make a plan to bring the loan current. Many creditors are willing to work with borrowers if it’s probable that they’ll get a return on their investment.

4. Give it Time

If your credit score does take a hit from co-signing for a borrower who did not fulfill his/her end of the deal, the only way to fully repair your score is to give it time. Any missed payments will remain on your credit report for seven years no matter what you do. However, a consistent history of timely payments and low debt levels will help you improve your score as the years go by. During this time, the age of your credit will increase as well, adding more points to your overall score. By the time the incident is off your credit report, it is very possible to have a better score than ever before.

If your credit has been damaged by co-signing, Veitengruber Law can help. We understand how creditors work and can provide individualized solutions to improve your credit. A low credit score can cause a lot of stress and financial anxiety. Even if your credit is absolutely tanked and you can’t possible imagine a solution, call us. We’ve never met a credit score we couldn’t help!

I Can’t Pay my Credit Card Bill! What Should I Do?

can't pay my credit card bill

Missing just one payment on your credit card or even paying late by just a few days can result in hefty fees, added interest, and a negative impact on your credit score. If you are facing financial difficulties due to COVID-19 and struggling to pay your credit card bill(s), the best thing you can do is let your credit card company know as soon as possible. While this might seem intimidating, it doesn’t have to be. Credit card companies know financial issues arise and it is in their best interest to work with you to make sure they can get paid.

If you need to contact your credit card company to request relief, here are some important steps:

1. Let Your Credit Card Company Know ASAP

As soon as you realize you are about to be financially impacted by the coronavirus pandemic, alert your creditors. You are certainly not alone in needing help during this time and many credit card companies have implemented programs to help those who have lost income due to the pandemic. You will likely need to provide documentation to verify your current situation, but the sooner you reach out, the better your chances of being granted the help you need.

2. Ask Specific Questions About Credit Card Relief Packages

Your credit company likely already has a few options they can provide you as far as credit card relief packages. It’s important that you’re absolutely comfortable with the terms of a package before you agree to it. It is helpful to have a list of questions prepared before the call to help you stay focused. Here are some key questions:

  • If I cannot make a full payment due to issues from the coronavirus pandemic, do you have a financial relief program available?
  • What kind of fees can I expect from these options?
  • Will interest accrue if I lower or defer my monthly payments?
  • How long is the relief period?
  • Will there be an opportunity to reevaluate the relief if I am still unable to make payments at the end of the relief period?
  • What information do you report to the credit reporting agencies?
  • Will I still be able to use my credit card if I request relief?

3. Get a Copy of the Agreement

If you do decide to enroll in a financial relief program through your credit card company, you need to make sure you understand the full terms of the agreement before you sign anything. Once you agree to the terms of the relief option, you need to get a written copy of the terms for your records. Make sure you continue to look at your credit card statements each month to check for errors and to make sure your credit card company is following the rules set forth in the agreement. If anything seems amiss, you should dispute it with your credit card company as soon as you can.

If you are unable to make your credit card payments or reach an agreement with your credit card company, you still have options. We can offer debt management solutions that are specifically tailored to each client’s unique financial situation. Reach out to us if you’ve attempted to negotiate with your creditor(s) without success. Veitengruber Law can (and wants to) help.

Should I Refinance My Student Loans During a Pandemic?

refinancing your student loans

The recent trend in low interest rates has led some to refinance various loans. From home loans to student loans, refinancing has generally allowed people to reduce their interest rate and save money. But should you refinance your student loans? The answer to this question probably depends on what kind of student loan you have. Whether you have federal or private student loans, here is everything you need to know about refinancing.

Refinancing involves acquiring a new loan to pay off all or some of your existing student loan debt. With this refinancing, your student loan terms will change along with your interest rate. Depending on your payment history and your credit score, you may be eligible for a lower interest rate than you previously had, saving you money. Refinancing is not consolidation, which allows you to combine all or some of your loan together into one payment. Consolidation also allows you to change the terms of your loan to lengthier timelines that will decrease the amount you need to pay monthly. Consolidation won’t necessarily save you money, though, while refinancing likely will.

A word of caution: while it is absolutely possible to refinance federal student loans, it is not necessarily advisable to do so. Because there is no federal process through which to refinance your loans, you will have to go through a private lender. Utilizing a private lender may very well get you a lower interest rate and save you money in the long run. Federal loans, however, come with benefits. Government loans offer income-based repayment plans, forbearance options, and forgiveness programs. You will not have access to these programs if you refinance through a private lender.

The best way to decide if you should refinance your federal student loans is to look at your potential savings. Check your credit score to see which lenders might be the best fit. Make sure you pre-qualify and try to determine what your interest rate would be. The prequalification process can also help you compare loan offers without negatively impacting your credit score.

It’s important not to solely focus on how much refinancing will save you month to month. You should also look into your overall savings and how quickly you could pay off the loan. Another option is to look into employer loan assistance. You may be surprised at what your employer offers. If you are looking for a job, try negotiating this into your benefits package.

Refinancing is not the only option for decreasing your monthly student loan payment or the time you spend paying back your loan. You can make extra payments or pay more than you owe each month to reduce the principal of your loan quicker and save on interest. Many lenders offer auto pay discounts. The savings you earn from these discounts can go towards extra payments on your loans.

While everyone wants to save money, take stock on whether or not saving money on your federal loans by refinancing is the right move for your specific situation. There are many different approaches to eliminating student loan debt as quickly as possible. If you are looking for help with debt management solutions, Veitengruber Law can help.

What Does Buying a House Do to Your Credit Score?

credit repair

In the months—or even years—leading up to a home purchase, most people spend a lot of time focused on their credit score. Your credit score influences your ability to acquire a mortgage and the interest rate you will pay on that mortgage. After you are settled in your new home, you might notice that your credit score moves around a bit.

In fact, changes to your credit score are likely to start with the credit inquiries that come with applying for mortgages. During the pre-approval process, lenders pull your credit report. This will alert the credit scoring algorithm that you are looking for a new line of credit, which will cause a small drop in your overall score. One way to limit the impact of this effect is to apply with several different banks or lending companies for pre-approval within a two-week period. This way, the algorithm will register an inquiry, but it won’t be as impactful as many inquiries over the course of several months.

While the pre-approval process of applying for a mortgage will decrease your credit a few points, the action of borrowing the money for your mortgage will cost you even more points—especially if this is your first home loan. The major increase in your total debt will cause a drop in your score, typically by a few points. The good news is installment debts like a mortgage will cause less of a score decrease than credit cards or other revolving debts.

Despite some slight decreases to your credit score, there is a silver lining to gaining a mortgage (besides your new home!). If this is your first mortgage, the addition of this kind of debt to your credit profile can be a good thing. 10% of your credit score is determined by your overall credit mix. The more debt variety you have, the better off you’ll be in terms of your credit score. In fact, after the initial dip from the credit inquiries and the adding of a new account, you might find that your credit score rebounds higher than ever before!

You can continue to improve your score quickly by consistently making your mortgage payments on time and in full. Within a few months of regular payments, your credit score will more than likely be higher than it was before you purchased a home.

When you are purchasing a home, especially if it is for the first time, you need to be prepared for your credit score to drop. The good news is this is a temporary decrease that is easy to correct up to and beyond your pre-mortgage credit score. Knowing what to expect once your home is purchased can save you anxiety and allow you to enjoy your home purchase without regrets.

5 Mistakes to Avoid After NJ Bankruptcy

NJ bankruptcy

After your NJ bankruptcy, a common concern is how to re-establish your credit score. The real challenge is creating new financial habits so you don’t find yourself back in the same hole all over again. At Veitengruber Law, our holistic approach to financial health means our job doesn’t end after the bankruptcy is closed. We work with you to repair your credit and create healthier financial habits.

 

Top Mistakes to Avoid After a Bankruptcy Discharge:

 

1 – Ignoring your credit report

When rebuilding your credit subsequent to a bankruptcy discharge or reorganization, you will want to be very attentive to your credit report. Your creditors are supposed to report any discharged debts included in the bankruptcy to the credit bureaus. These reports should show a zero balance and include a note indicating the debt has been discharged. It is crucial to follow-up on this and ensure that all creditors are reporting to credit bureaus correctly. If discharged debt is being wrongly reported—as either a charge-off or an open account—late or missed payments can continue to show up on your credit. This can further damage your score and make it more difficult for you to get new credit.

2 – Applying for multiple new credit lines

It can be tempting after bankruptcy to rush out and apply for a gaggle of credit cards or loans in an attempt to quickly repair credit. However, it is important to give your credit score time to rebound before applying for new credit. The impact of a bankruptcy is strongest in the first year after filing, although it can stay on (and affect) your credit report for up to ten years. Instead of rushing into opening several credit lines at once, be patient and take the time to research your best options.

3 – Failing to read the fine print

When you do start applying for credit cards, it is important to remember that not all credit cards are created equally. Some credit cards will be more helpful to those rebuilding post-bankruptcy. A secured card, for instance, allows you to deposit cash as collateral up front to create a line of credit. That way, you are not able to charge more than your initial deposit. With any card you choose, it is important to read the fine print of your terms to make sure the card will work in your favor.

4 – Falling for credit repair scams

Many unethical “credit repair companies” make big promises about performing miracles to improve credit scores, but they rarely ever deliver the results promised. These companies rely on misinformation to scam those that don’t know much about how credit works. Some of their tactics may even be illegal. Keep in mind that if something seems too good to be true, it probably is.

5 – Making things too complicated

Ultimately, when it comes to rebuilding your credit after bankruptcy, you need to go back to the basics. What bad habits caused you to file for bankruptcy in the first place? An unflinching assessment of your spending habits will help you determine which factors led to the bankruptcy and determine where you need to make changes. Figure out what your credit-bingeing triggers are and work toward setting spending limits for yourself. Simple things like making on time payments, keeping debt to a minimum, and sticking to a healthy budget are excellent foundations of any financial strategy and will get you on the road to financial health quickly.

You’ve been through the hard-fought financial battle of bankruptcy and come out victorious on the other side. Now is the time to think positively about your financial future. Rebuilding your credit after bankruptcy takes time and patience, but you can use the knowledge and financial savvy you’ve learned along the way to move forward to a brighter future. Veitengruber Law is here to help. We are skilled in advising clients and creating easy-to-follow strategies to rebuild credit. Call for your free consultation today.

Getting Nowhere with Your Debts? You Need a Debt Resolution Plan!

Debt Resolution

If you find yourself burdened with unmanageable credit card debt and struggling to make minimum payments each month, Veitengruber Law’s debt resolution services may be the perfect option for you. Following a debt resolution plan can be an effective strategy for anyone who has experienced a financial hardship like divorce, job loss, a significant reduction in household income, or medical debt resulting from serious accident or illness. Our team is experienced in debt management solutions and creating effective debt resolution plans.

George Veitengruber is an attorney with a strong focus on finances. All of our team members understand the personal heartache people can experience from overwhelming debt. We work toward real and appropriate solutions that provide relief and peace of mind for our clients. We will sit down with you to review your income and expenses and evaluate your debt to get a blueprint of your finances. No two people have the same debt issues and there is no one-size-fits-all solution to debt issues. We provide individualized advice for each client. Bankruptcy is not the only option for people seeking debt relief, and we will never push you into bankruptcy if that is not your best option.

Debt resolution can be an excellent alternative to bankruptcy or debt settlement. After we sit down with you to get a clear understanding of your financial situation, we can create a comprehensive budget that will allow you to get a handle on your debt. We will also use that budget to negotiate with creditors on your behalf. We will work to settle on new payment terms with each individual creditor, negotiating to eliminate penalties, reduce interest rates, and secure lowered monthly payments. The goal of a debt resolution plan is to resolve your debts for less than what you owe on your outstanding balance and to create a payment plan you can more easily manage.

There are some major incentives to working with an attorney to create a debt resolution plan over other debt settlement services or trying to manage debt alone. While your overall score will still likely drop at least slightly, our debt resolution services have the potential to limit damage to your credit score. Because you can continue to pay creditors throughout the negotiation process, there is little opportunity for late payments to further decrease your credit score. Veitengruber Law can also negotiate with creditors in how they report the payment of the debt, working with creditors to ensure your credit score is impacted as minimally as possible.

Another major benefit to debt resolution is the support you get from a qualified, experienced attorney. Our legal team can use their knowledge of the financial world to negotiate on your behalf. Creditors are more likely to take an attorney seriously and an attorney can assure your creditors are working in your best interest. We know all the tricks of the trade and how to work the situation in your favor. When you work with us, you know you will receive the quality know-how and financial expertise you deserve. Our advanced knowledge and years of experience also means less time spent negotiating with creditors, ensuring that you will start paying off debt sooner rather than later.

Don’t wait to start working on a solution to your debt troubles. Call us today to arrange a free consultation with a debt negotiation lawyer. Our comprehensive approach to debt resolution will allow you to breathe easier again. We can work with you to create an individualized debt resolution plan that works for you, helping you tackle unmanageable debt and avoid further financial troubles.

Wallet Full of Plastic: Do You Need Credit Counseling?

credit counseling

Many people enjoy the flexibility of credit card spending, but the more credit cards you have, the easier it is to develop destructive spending habits. The convenience and ease of credit spending can be a slippery slope to overspending and unmanageable debt. If you find yourself with a wallet filled with plastic, it might be time to seek credit counseling to get expert advice on debt management and credit repair. At Veitengruber Law, our credit counseling team can work with you to improve your individual financial situation and help you gain control over your money and credit.

Credit counseling is a great way to receive expert financial advice and support to help manage your debt and organize your finances. It is important to make sure you are getting advice from true experts and not financial scammers. Our legal team provides debt management and credit repair services to get you back on the road to financial health. Many of our clients developed unhealthy spending habits over time, slowly building debt until suddenly finding themselves overwhelmed with payments. Out of control credit card debt can seem overwhelming, but you don’t have to face it alone.

At Veitengruber Law, we understand how the credit industry works. We strive to instill in our clients a holistic understanding of their finances and how the credit system works. Our team can give you the tools and insider advice to take control of your credit. In your individualized consultation, we will provide easy-to-follow strategies to rebuild your credit, even after major financial set-backs. Our attorneys can also help you establish a realistic and manageable budget by looking at your monthly bills, expenses, debts, and income and devising the best plan forward. We can give you the knowledge to negotiate better terms on your credit cards to make your payments more impactful.


You may be surprised by how much a few budget changes can massively improve your financial situation.


It is important to note that you don’t have to be in dire straits to seek credit counseling. Maybe you have a decent credit score, but making payments on time has recently become a struggle. Don’t wait to address your financial situation until debt collectors are knocking at your door. If your current budget isn’t comfortable or you find yourself struggling to make your payments, it might be time to reassess your financial situation. If you are feeling overwhelmed, be proactive about your debt and address your problems before they become emergencies. Credit counseling can help you avoid future financial woes like bankruptcy.

IMPORTANT FACT: Credit counseling and debt management are excellent alternatives to bankruptcy and can often even prevent it.

Even novice consumers can benefit from credit counseling. Seeking advice from experts when you first start living on your own is a great way to make sure you are starting on the right foot as you make plans for your financial future. We offer individualized counseling to help you understand how credit scores work, financially healthy ways to build credit, and how to make the most out of your credit right now. Establishing healthy spending habits and formulating a budget early on will set you on the path for a healthy financial future.

It’s our goal to help you become a stronger financial consumer. From helping clients out of extreme credit card debt via NJ bankruptcy to keeping homeowners in their homes via mortgage modification, and even simply offering advice to struggling novice consumers, we can get you back on track. We care about your financial future.

Seeking Legal Counsel When You’re Out of Money and Out of Time

nj bankruptcy attorney

 

You have reached that critical point; you can no longer keep up with your bills. You might have a mountain of credit card debt, a house going into foreclosure, a looming sheriff sale on your property, shut off notices for services, a garnishment or repossession on a vehicle, or all of the above! Perhaps you are considering bankruptcy. The point is that you need the help of a legal professional. You need it done well, you need it now, AND you need to find a way to pay for it.

 

How Can You Afford It? (How Can You Not??)

You’re going to have to spend money to save money.  HOWEVER, you’re going to save your peace of mind and hopefully some assets too.

 

  1. Take advantage of a free consultation. A qualified attorney can give you your options. Is bankruptcy right for you? Is your situation ripe for credit consolidation or negotiation? How far along are you in the foreclosure process? Is it possible to stop a pending sheriff sale? Be honest and you’ll receive realistic expectations for your individual circumstances.

 

  1. Use Your Tax Refund. Uncle Sam has been holding on to your money, but now it’s the perfect nugget of cash infusion to save you bigger money in the long run.

 

  1. Ask family and friends. It’s difficult to swallow your pride, but you never know what your support net is until you ask. If it’s a gift, then that’s great. If it’s a loan you can let your loved one know that he or she will be listed as a creditor if you file bankruptcy. For other situations; set up a plan of when and how much you can realistically repay. It’s much easier to keep your job if you have stable housing and a solid financial plan under your belt.

 

  1. Stop Paying Your Unsecured Debt. If, after your consultation, bankruptcy is in your future, stop making payments on credit cards or other unsecured debt. The total owed will be dealt with as part of the bankruptcy, so those monthly minimums can now finance your legal fund.

 

  1. Reduce your expenses and minimize outgoing expenses. Fancy coffee every morning, premium cable channels, gym membership, daily lunches “out” – all gone. It adds up fast!

 

  1. Try to earn some extra money aside from your primary occupation. Sell old electronics or find a temporary part time job. Go through your attic or basement and have a yard sale, or hit eBay. Lighten your load while filling your wallet.

 

  1. Request a payment plan. Your bankruptcy attorney may allow you to list them as a creditor in a Chapter 13 filing, thus allowing you to pay them over a period of months. Chapter 7 fees can be paid over time as well, although without the federal court supervising. (Keep in mind that you must be paid in full before your attorney will file the case.)

 

  1. Withdraw from your retirement account. Only do this as a last resort. Those funds are otherwise protected, but you could be facing a large tax consequence if you withdraw early. That being said, in some circumstances it may be the best option. Also, consider options where you essentially “borrow” the funds from yourself and replace them with a payroll reduction each pay period going forward.
    IMPORTANT NOTE: Always discuss this option with your credit repair attorney BEFORE taking any money from your retirement fund(s).

nj bankruptcy attorney

How to Find the Right Attorney

You want someone with a proven record of results who can and will act in a timely manner. You could call your local bar association or attorney referral number. You could get a referral from a friend. Or, you could count one problem solved and realize that you already know a top legal representative for all types of financial duress – Veitengruber Law.

 

Don’t represent yourself.

This isn’t small claims court, or a traffic ticket. This is your entire financial future. Your chance of successfully completing a Chapter 13 bankruptcy without legal counsel is less than 1%; the chances of completing a solo Chapter 7 is less than 50%. Besides, you might end up losing more money trying to navigate your financial issues alone than you would have spent on legal counsel in the first place.

 

You wouldn’t ask a podiatrist to work on your car, or the babysitter to fix your plumbing. You need the right person for the job – you need an expert! When you’re looking for a NJ lawyer with experience who you can trust, you need Veitengruber Law.

How Identity Theft Affects Your Credit Score

NJ credit repair

What (all-too common) crime can happen to you without your knowledge, making virtually everything in life more difficult? Two dreadful words: Identity Theft. Unlike some medical diseases, identity theft doesn’t discriminate; it can strike anyone at any time. The worst part about being a victim of identity theft is that it can have a seriously negative impact on your credit score and it can prove to be difficult to fix.

More people than you realize have been severely impacted by identity theft. When an impostor uses another person’s identity to make a purchase and fails to pay the bill, a storm cloud rolls in. The scammer has zero intent to ever pay the debts they accrue under your name; therefore, you’re left to clean up the aftermath. You may not even realize that your identity has been stolen until a credit agency contacts you. By this point, your credit has likely already taken a major hit.

Your credit score is your representation as a responsible individual regarding money matters. Unpaid bills can have a lasting, damaging impact on your credit report, which can then snowball to affect other areas of your life (obtaining housing, buying a car, getting a decent job). Because payment history makes up about 35% of your credit score, late or nonexistent payments have a momentous effect on your “credit worthiness.” In addition to unpaid bills, identity theft can leave other negative marks on your credit report. Here are five ways that identity theft packs a punch:

1.      New Accounts

Adding a new account to your credit report or getting a new loan shouldn’t affect your credit score as long as you aren’t adding a plethora of new accounts all at once and you’re making regular payments. However, when an impostor opens a new account in your name and fails to make any payments, your credit score will slowly begin to tank. Every month that passes without payment received will lower your credit score further.

2.      Inquiries

If an identity thief is applying for new credit with your personal information, the lender is going to check your credit report. These are known as credit checks, or “hard inquiries” – each of which show up on your credit report. Each inquiry will affect your credit score by dropping it a couple of points. Your score will drop because credit scoring models regard “hard inquiries” as a sign that the consumer is shopping for credit.

3.      Collections Accounts

After no action occurs for 6-12 months on an unpaid debt, the lender will turn it over to a collection agency. This causes a “second action” to be taken, and a collection account will appear on your credit report. Unfortunately, this will have an extremely harmful effect on your credit score. Often, medical identity theft leads to the appearance of a collection account. This occurs when an impostor uses your identity to obtain medical services or treatment, but has no intention of paying the bill(s).

4.      Greater credit utilization ratio

Another significant piece that counts toward your credit score is the amount of debt you carry. When the scammer “goes shopping” and adds charges to your account (unnoticed), your overall amount of debt rises. Even if the scammer opens a phone plan or house utility but doesn’t pay the bill, the provider will report it to the credit bureau. A negative ding will appear on your report, damaging your credit score. A continuously increasing amount of debt will continuously drop your credit score. The higher your credit utilization ratio, or the amount of your available credit that you use, the lower your credit score will fall.

5.      Higher Auto Insurance Rates

In every state except California and Massachusetts, auto insurers utilize your credit score to set rates. A low credit score can cause a 20 to 50% increase in auto insurance premiums. Even if you have a depressed credit score, an insurer can’t reject you, but they do have the ability to hike up your premiums without an explanation.

Nobody wants to find out that their identity was stolen, but it can and does happen. Being knowledgeable and prepared as to how it can affect you is crucial. If you’ve been the victim of an identity thief, Veitengruber Law can help you deal with the emotional and mental frustration as well as the financial damage that has been done. No matter how low your credit score has gotten – we will guide you through getting it back to a respectable number again.