In the modern world, you can’t do much without a good credit score. From buying a car, purchasing a home, renting an apartment, or simply getting a credit card. If you have no credit or bad credit, you may find that you get denied at every turn. Before you start looking for loan sharks or going with high-interest rate offers, read our tips on how to correct, repair, and boost your credit score in Arizona.
Although Arizona has some expensive places to live in, most of the state has a reasonable cost of living. The average person in Arizona sits close to national averages for most debt as well, including credit card debt where the average individual has around $5,264 in debt. This is just slightly above the national average, below states like Texas, Delaware, and New York.
Arizona has a good average credit score of 710. This is close to the national average of 714. Although the average for the state is good, there’s always room for improvement, especially for anyone with a below average credit score. Credit repair can sometimes help to bring up your credit score.
In Arizona, there are a few state-specific requirements for credit repair firms. The main law covering this industry is the Arizona Credit Repair Organizations Act, or ARS 44-1701. This law requires that credit repair agencies:
Arizona has its own state laws about credit repair, but it also falls under the federal Credit Repair Organizations Act (CROA). This law dictates how credit repair organizations are allowed to operate with their customers, including preventing any misleading statements and requiring a written contract for everyone.
Companies doing credit repair in Arizona do not need to have lawyers. As long as a company is following both state and federal laws laid out for credit repair service providers, they are perfectly suited for the job.
There’s no requirement for legal experience for credit repair. This is a service that you can even do on your own, although it’s tedious and a bit complicated. Working with an experienced credit repair service makes the whole process much smoother, helping you solve difficult credit issues and improve your credit score as quickly as possible. Any mistakes you might make in the process could delay that fix, making it harder for you to access good credit until you sort out the issues in your spare time.
Residents of Arizona can follow this process for credit repair:
Step 1: Request credit reports
Each Arizona resident is entitled to one free yearly report directly from each agency. You may request additional reports as often as you like at an average cost of nine to fourteen dollars.
Request all 3 reports in order to get the full picture of what’s going into your credit score. You can request these reports online or through the mail.
Step 2: Check for errors
Look through all your credit reports to see if the entries there are correct. Incorrect entries are fairly common, so it’s a good exercise to check your reports for false entries, incorrect information, or fraudulent use of your credit information.
Make sure you check all 3 reports. Some entries may vary on each report, since businesses are not required to send information to all 3 credit bureaus. Each report may contain slightly different information, which is why it’s good to check them carefully and confirm the information on each one. For any mistakes or unknown charges you see on your credit reports, make sure to note them down as needing to be corrected. Most people have at least one, but sometimes more mistakes on their reports that can lower their overall score
Step 3: Dispute erroneous entries
Any entries you find on your credit report that aren’t from you or don’t include the correct information can be disputed. Filing a dispute in writing with a credit bureau is your right as a consumer. Once a dispute is filed, the credit bureau is required to investigate the information. If an entry is found to have an error or if any incorrect information is present, they have to alter your credit report to correct it. Disputes have to be filed with each credit bureau that lists an incorrect entry.
Note: Even though the credit repair process seems easy, it’s difficult to go through it on your own. Credit repair services help you with all steps of the process, including the time-consuming task of following up your disputes to make sure the credit bureaus are actually doing their part to properly investigate claims.
Everyone has a credit report even if they don’t have a score. Your credit report is basically a report on your spending habits and your ability to be trusted with credit. Your report is used to verify your identity, your rental history, and even your job history. Banks and lenders use the information your credit report to assess how much of a risk extending you a loan would be. People seen as having a high risk of default will often be denied loans or offered high interested rates on limited loan amounts. Rental agencies who are considering offering you an apartment will check your score to see if your income is actually high enough for you to afford to rent in that location. They will also check to see if you defaulted on other properties or loans in the past. Too many negative marks may lead to an application denial, even if you make enough to afford your rental payments.
If you have no credit, it is almost the same as having bad credit. If you don’t have credit, there are many ways you can build your credit score from scratch. One of the easiest ways to build a credit score from scratch is by getting a secured credit card that has the option of converting to a regular account after a set period of time. Another way to build fresh credit is by opening store accounts that allow you to carry a small line of credit. Even maintaining a phone bill and a cable bill will put you on the right path towards a healthy credit score.
For Arizonians who have bad credit, your problem accounts will need to be corrected before you can work toward improving your score. You can do this on your own or can hire a credit repair agency to help advocate with collections agencies on your behalf. Always be wary of any claim that offers a quick solution or any credit repair company that guarantees to increase your credit score. The only true way to improve your credit score could take some time. Fixing and repairing credit also involves managing your expenses and payments in a responsible manner.
If you have the ability to pay, but often forget to pay your bills, consider setting up bill pay reminders, late payments have a negative effect on your score, so they should be avoided at all cost. When your payments are made on time, your score will gradually improve. Not only will your score improve, but lenders will see that you care about making your payments on time each billing cycle.
Another thing to take from this article on Arizona credit repair is that if you have bad credit, it is important to try to reduce the amount that you owe. Stop using your credit cards for new purchases. Contact the credit card companies to see if you can consolidate your balances, also make of point of paying off balances with high-interest rates earlier than those with lower rates. Avoid letting an account enter collection status, even if you pay it off it will remain on your report for seven years. In cases where you are unable to afford a payment, call your debtor right away to set up payment arrangements.
If you have an open account with a high credit limit, try to keep the balance as low as possible, high limits help your score, but using the bulk of the limit harms your score. Don’t apply for several credit cards or loans, each credit inquiry lowers your credit rating. However, the yearly report directly from each agency has no effect at all on your rating. Try to avoid many offers now seen online that try to entice you with a “free credit report”. They may give it to you for free for the short term, but they still pull your credit in the same manner a money lender would, thus affecting your account negatively.
These are some simple ways to help improve your credit score, however, everything depends on a personal ability to manage their money and live within their means.
You can improve your credit score significantly by removing false, inaccurate, or fraudulent entries from your credit reports. Payment history makes up more than 1/3rd of your credit score, so any incorrect information, including falsely missed or late payments, can drag your credit score down. Having these inaccurate entries removed puts your score back to where it should be, erasing the negative impacts that the false entries were causing.
Credit repair costs between $99 - $149 per month in Arizona. The average cost of credit repair is closer to $99 - $129 per month, including a one-time setup fee for some companies and the first monthly fee. Fees are charged monthly to cover the follow-up process involved in credit repair and often include additional, optional credit monitoring services.
Credit repair can take some time. Legally, credit bureaus have 30 days to investigate and respond to disputes filed with them. Depending on the response, there may be more follow up that needs to take place, but the timeline is often around 30 days for credit repair.
Credit repair is legal and available everywhere in Arizona. As long as the company is adhering to the standards set by both Arizona law and US federal laws, they can operate throughout the state without restrictions. Many credit repair companies are located within the largest metro areas, such as Phoenix, Tucson, or Mesa. If you live outside of larger metros, you can still access credit repair services in the state. Even in smaller cities like Hunter Creek, Carrizo, Kearny, or Somerton, credit repair is accessible from a reputable firm in or outside of your state.