Author: Natalie Sanchez

Feedback Please!

Of the 38,000 people who entered the $2,500 Amazon gift card giveaway, almost half said they would benefit from a higher credit score.  If this sounds like you, you aren’t alone.
I have been in the credit-improvement business for almost 20 years and I’ve heard a lot of concerns over the years. 
That being said, 2020 was unlike any year we have ever had- and for that reason, I’d love to get your feedback about what people are going through now with regards to their credit score.
Here are some questions to spark some thoughts…

  • What is the biggest problem you have with your credit score?
  • What is the one question you always wondered about credit scoring?
  • Have you used credit repair in the past?  If yes, what happened?
  • What roadblocks with your credit have you hit in the past?
  • What other questions come to mind… (credit score related)?
  • Or… is credit the last thing you are focusing on now with everything else happening in the world?

Don’t feel like you need to use your real name.  Just post these answers in the comments and I will be reading every single response!
I’m going to be able to take this information and incorporate it into the new product that I’m releasing for 2021. I believe it will be transformative in the credit improvement industry.
Philip and the 720 Credit Score Team

How to rebuild credit without a secured card

I just got a call from Nancy in Indiana.
Her question was:
“I’ve gone through the program and know that my husband and I both need three credit cards after our bankruptcy. The problem, is that we don’t have money for the secured cards, and our credit score is too low for an unsecured card. What should I do?”
My answer:
“Can you afford $39 per month for 12-months?” She said she could.
I continued… Our Credit Rebuilder Program is designed for this situation.”
Here is how it works: has partnered with a nationwide financing company that has agreed to approve 100% of our clients (regardless of your current credit score) who apply to join our 720 Credit Rebuilder Program.
Here are the details:

  • Price: When you apply for financing to join our 720 Credit Rebuilding Program, you will be approved. You will then make 12 monthly payments of $39, or 24 twice-monthly payments of $19.50.
  • These payments will have the similar impact on your credit score as a monthly car payment. Each payment will be reported to TransUnion and Equifax as an “Installment Line.”
  • Your membership in this program includes:
    • Enrollment into “7 Steps to a 720 Credit Score” for twelve months (instead of the standard six months). Your extended access will begin after your first on-time payment.
    • Priority access to our monthly Question and Answer calls, where you will be invited to ask for personalized guidance for a full year (instead of the standard three months).
  • Plus, this fee is good for a borrower and co-borrower. Meaning, Nancy and her husband can sign up together, for the same $39 per month cost.
  • In six month or so, once her credit score starts to rise, credit card companies will offer Nancy and her husband unsecured credit cards, which at that point, they can start applying for, to get their credit to 720.

If you are interested in enrolling, please fill out our secure online agreement here:

Why opening new credit cards can help your score

Often, people with bad credit think they should wipe their hands clean of credit. They figure that if all those credit cards got them into trouble in the first place, they should cut them up and become cash-only citizens.
Unfortunately, this gut reaction is the worst thing you can do for your credit score.
Because it continues to suppress your credit score. In fact, if you have bad credit, you should open three new revolving credit cards immediately. See for recommendations on the best credit cards for people with bad credit, fair credit, or great credit.
Here is some background information on why this is so important …
The credit-scoring bureaus place more emphasis on recent behavior than on past behavior. This means that if you have suffered from some sort of financial meltdown that caused your credit score to drop, your credit score will be bad in the months after the financial problems, but it will start to increase as the negative marks begin fading into the past.
But, this assumes that you have given the credit bureaus new and improved information about your payment and spending habits.
Think of it like this: Rewind to your years in high school and imagine that you failed a test when you were a sophomore. When you failed the test, your parents and your teacher were probably disappointed in your effort and test score.
Now imagine that for the rest of your sophomore year, as well as your entire junior year, you had great test scores. By the time your senior year rolls around, your parents might not have forgotten about your failed test entirely, but they probably are not too concerned about that “F” that you received two years prior.
The same goes with credit. If you take the right steps, all of those “F” marks will not matter in 12 to 24 months—after all, you will have a new and improved history of earning “A” after “A.”
This is why you need to have and use credit if you want to have a good credit score.
Establishing new lines credit is an important part of rebuilding your credit score.
Particularly, you need three new revolving credit cards. One of the fastest ways to rebuild your credit score to a 720 is to have at least three active, major revolving credit cards, meaning Visa, MasterCard, American Express, or Discover.
See for recommendations on the best credit cards for people with bad credit, fair credit, or great credit.
Unfortunately, it can be hard to qualify for credit cards if your credit score is low. And beyond that, according to a Federal Reserve Board Study, 46% of credit cards will hurt your credit score. About half of the credit cards that people carry in their wallets do not report to all three credit bureaus, or they do not report the proper credit limit, which causes your score to drop.
To help our clients and readers improve their scores the fastest, we have identified the best credit cards that do report the proper credit limit to all three credit bureaus.
Once again, you can find a link to these different types of credit cards by going to See
Lastly, keep this in mind: Every time you apply for credit, your score might drop a little. But after about six months of timely payments on these new credit cards, your score will show significant improvements. And six months later, you might have a great credit score, which will allow you to renegotiate your car loan, home loan, and credit card terms, which could save you hundreds of dollars each and every month!

Survey says consumers still confused about credit-scoring

A survey from NerdWallet and Harris Poll found that many Americans do not know the rules of credit scoring. Here are some of the findings:

  1. About half of Americans don’t know that having bad credit can limit their option for cell phone service, and more than half don’t know that people with poor credit will pay higher utility rates.
  2. Almost one-quarter of Americans in the survey didn’t know that they might be unable to rent an apartment due to poor credit.
  3. Nearly 45 percent didn’t know that they might pay higher car insurance premiums if their credit scores are low.
  4. About 41 percent erroneously think that carrying a small balance on credit cards will hurt their credit scores.

Knowing the rules of credit-scoring is important because having bad credit is expensive. You will pay higher interest rates on your credit cards and loans, as well as higher premiums on insurance, and higher deposits for utilities.
Credit-Scoring 101
Here are the basics of credit-scoring. FICO scores are calculated from data reported to credit bureaus by lenders. This information includes:

  1. Your payment history accounts for 35 percent of your credit score. If you are 30 days or more late on a payment, your score could drop.
  2. The amount of credit you use accounts for 30 percent of your score. You will have a higher credit score if your credit card balances never exceed 30 percent of your credit limit. And, as your loans age, your score will increase, assuming you pay your loans on time.
  3. The age of your accounts determines about 15 percent of your score. The older your accounts, the deeper your roots, and the better your score.
  4. Having a healthy mix of credit accounts for about 10 percent of your score. Creditors want to see that you can juggle different types of credit, so they assign better scores to people who have, at a minimum, three credit cards and an installment loan or credit rebuilder loan.
  5. Credit inquiries account for 10 percent of your score. Unless you are rate shopping, your score will drop a few points every time you apply for a credit card or a loan.

Average credit score hits all-time high

Here is some good news for borrowers: The Wall Street Journal reported that the average FICO score is at an all-time high of 700.
A 700 FICO score is considered good, just 20 points shy of being considered excellent.
The Wall Street Journal also reported that the number of consumers with credit scores below 600 has dropped to about 20 percent. (FICO credit scores range from 350-800, with scores below 620 being considered subpar.)
“Where Can I Get My Credit Score?”
If you are interested in finding your credit score, you have several options:

  1. You can buy your FICO score from Keep in mind that you actually have three FICO scores because there are three credit-reporting bureaus: Experian, Equifax, and TransUnion. Not all lenders report to all three credit-reporting bureaus, so they each have slightly different information about your payment history. As such, your credit score will differ from bureau to bureau. When determining your interest rate, lenders usually ignore your highest score and your lowest score and base your rate on the score that falls in the middle.
  2. You can get your credit score for free from a variety of websites. Keep in mind, though, that these credit scores are usually based on a formula other than the FICO formula. Lenders almost always use the FICO formula, so free credit scores usually do not represent the credit score lenders will see when they pull your credit report.
  3. This brings us to the best way to get your FICO credit score for free: Ask a lender. You can call an auto dealership or mortgage broker and ask to be pre-qualified for a loan. During this process, the lender will pull your credit report and can tell you your credit score, free of charge. Keep in mind that your credit score will drop a couple of points due to the inquiry, but the damage will be minimal, and your score will bounce back within six months.

“What Can I Do to Fix My Credit?”
Here are three of the best ways to increase your credit score:

  1. Keep a low balance-to-limit ratio on your credit cards. Never carry a balance that is more than 30 percent of your limit on a credit card. Keeping a low balance tells lenders that you are not strapped for cash.
  2. Build new, good credit around old, bad credit. If you have several accounts that are in poor standing (such as collection accounts, bankruptcies, foreclosures, or the like), you need to build new, good credit around the old accounts. Have at least three new credit cards and a credit rebuilder or installment loan on your account. Consider your old credit like receiving “F” grades in school. You are much better off if you add some “A” grades to your report card than simply hanging on to all those “F” grades. Credit works the same way: If you have a history of poor credit marks, the credit-scoring bureaus need to know you have turned over a new leaf, so open a few new accounts and keep them in great standing. (You can find a list of credit card companies that approve borrowers with low credit scores here:
  3. Of course, the golden rule of credit is this: Pay your bills on time!

Credit system changing July 1

As of July 1, tax liens and civil judgments will no longer impact a person’s credit score, as calculated by the three major credit agencies: Experian, Equifax, and TransUnion.
This change to the credit-scoring formula is a result of a settlement between the credit-scoring bureaus and thirty states: States said that liens and judgments were often erroneously appearing on the wrong people’s credit reports, which was hurting their ability to access credit and hiking their rates on homes, insurance policies, loans, and credit cards.
According to FICO, this change means that about 11 million people will see their credit scores increase by about 20 points, so if you have civil judgments or tax liens on your credit report, you may have seen your score jump on July 1.
This might be a good time to review your interest rates and ask your credit card companies, mortgage lender, auto loan lender, or insurance carrier to review your rate and see if you qualify for better terms.
Here are some things to keep in mind when asking your lenders to review your terms.
Lowering Your Credit Card Payments
When your credit score improves, call your existing credit card companies and ask them to re-run your credit report to see if you qualify for a lower-interest or lower-fee credit card. You can also shop around to see if you can find better terms from other companies.
If you choose this option, be sure to apply for new credit cards before you close your older cards. Once you are approved for credit cards with better terms, call your credit card companies with the higher fee and close them.
Anytime you close a credit card, remember that your credit score will drop temporarily, but don’t worry: Your credit score will rebound quickly.
Keep in mind, though, that if you plan on making a major purchase soon (car or home), you should not apply for new credit cards or close your existing ones until after you have made the purchase. Also, remember that 46 percent of credit cards have a negative impact on your credit score, according to a Federal Reserve Board Study.
You can find credit cards that will help your credit score by visiting
Lowering Your Installment and Car Loans
If your credit score improves, you might as well call your car lender, have them run your credit and see if they would be willing to refinance your car at a lower interest rate. (You can also submit your name at, and we will have a lender call you to review your terms.)
It bears noting that anytime a lender runs your credit score, your score will drop temporarily by a couple of points. Don’t worry: It will start to climb and rebound entirely within six months.
Refinancing Your Home Loan
If you have a home loan that you received when your credit score was low, and your score has since recovered, call your lender immediately to see if you could refinance to a lower rate.
We recommend calling:

  1. The bank from whom you received the initial loan, as it will most likely refinance for a lower fee.
  2. A nationwide bank (like Bank of America, Wells Fargo, or Chase), as nationwide banks have the best interest rates.
  3. A mortgage broker, who will be the most flexible.

By checking all these options, you will be able to find the best option, and, depending on how high your score has climbed, you could save hundreds and hundreds of dollars per month.

You never have to carry a balance

According to a survey from the financial website NerdWallet, nearly half of Americans (41 percent) think that a person has to carry a small balance on his or her credit cards from month to month in order to have a great credit score.
But this is untrue. Your credit score can be terrific even if you pay your credit card bills in full each and every month.
That said, there are a few rules you do need to keep in mind when it comes to making the most of your credit cards, though.
Rule #1: Use your credit cards.
Though you do not need to carry a balance to have great credit, you do need to use your credit cards regularly. If you stop using them, they become inactive, which means they are not giving the credit bureaus any information about you.
Inactive credit cards do not do anything to help your credit score, but if you use your credit cards—and pay your bills on time—your credit score will start to increase, as long as you follow the other rules.
You can keep your cards active and avoid paying interest by paying your balance in full each month. We have plenty of clients with terrific credit scores who use this strategy.
Rule #2: Keep your balance below 30 percent of your limit.
Though having a $0 balance on your credit card will not hurt your credit score, having a high balance will. The best credit scores are given to people who have a low balance, month round. A low balance is calculated as anything below 30 percent of your limit. If your limit is $1,000, for instance, your balance should never be above $300.
If your balance starts climbing above 30 percent of your limit, credit-scoring bureaus start worrying that you are strapped for cash and turning to credit cards to relieve your financial troubles, and they will lower your credit score.
Rule #3: Pay your credit card bills on time.
Of course, most people know this, but the most important thing you can do to help improve your credit score is to pay your credit card bills on time each and every month. If you have the finances to do so, it’s a good idea to pay them in full each month: And contrary to popular belief, having a $0 balance will never hurt your credit score.

How credit impacts homeowner insurance

In many states, homeowners with fair credit pay about 36 percent more on their homeowner insurance rates than those with excellent credit, and homeowners with bad credit pay more than double.
This comes from an article in the New York Times and was based on rate-comparison quotes.
And the gap is widening. In 2014, homeowners with bad insurance paid 91 percent more than homeowners with great credit, but that increase climbed to 100 percent in 2015 and 114 percent in 2017.
Most people know that their credit history play a huge role in determining interest rates on car loans, mortgages, and credit cards, but they often fail to consider the other ways credit history can impact their lives: Many employers consider a person’s credit history, as do landlords. Utility companies often require deposits from people with poor credit. And, in most states, it appears that insurance is also impacted.
Insurance companies in all but three states (California, Maryland, and Massachusetts) use something called an insurance score as part of their calculations when determining the rate a person will pay on insurance policies. Of course, other considerations are taken into account, like the age of the home and the quality of its roof, but the insurance score is a big part of the calculation.
Like a credit score, an insurance score is based on your credit history.
So how can you raise your insurance score?
You can raise your insurance score in much the same way you raise your credit score. Here are a few ideas:

  1. Pay your bills on time each and every month.
  2. Keep a low balance on your credit scores (less than 30 percent of the limit). Having a high balance tells the scoring agencies that your experiencing financial strain and turning to credit cards because your cash flow is low. This erodes your score and increases your rate.
  3. Build new credit around old credit. If you have experienced a financial meltdown and have accounts that are not in good standing, you need to open new credit cards and installment lines of credit that are in good standing. Consider the old, bad credit like an “F” on a report card. If you have a few “F” grades surrounded by a whole bunch of “A” grades, the scoring agencies will see that you have turned over a new leaf. If all you have are the old “F” grades, the scoring agencies will worry that you are still experiencing financial stain.

Finally, be sure to shop around for the best rate on your homeowner insurance. When you see your credit score start to improve, shop around again. At least annually, ask your current insurer to review your account and consider lowering your rate, and then compare your new rate to quotes from other companies.

Removing a Bankruptcy From Your Credit Report

I host Question & Answer sessions for students who need help rebuilding their credit score. Removing a bankruptcy from a credit report and rebuilding credit after a bankruptcy are both frequently asked questions on these calls.
Below is one of the many questions I received and my response.
Question: Can you give me the specifics on how to remove a bankruptcy from my credit report?
Answer: Forget all you’ve heard about how to remove a bankruptcy from your credit report because I have a very different approach to this topic.
First of all, I assume your bankruptcy is legitimate. You, not someone else, are responsible for it. This simply means you are not a victim of identity theft and the bankruptcy on your credit report is legitimately yours.
With that assumption, here is my answer: You cannot get it removed and you should not worry about getting it removed. Wait! Before getting discouraged and losing hope, let me explain my approach to handling bankruptcies.
It isn’t necessary to remove a bankruptcy from your credit report. Yes, that’s right. Even though a bankruptcy is on your credit report, it will not prevent you from reestablishing your credit after bankruptcy.  Don’t believe the statement that your credit is ruined for seven years. You can have a 720 Credit Score in just two years after the bankruptcy.
Don’t search for someone to help you remove a bankruptcy from your credit report. Many people and/or organizations will say they can help you remove a bankruptcy for a fee. Don’t believe them! They will tell you they can remove a bankruptcy from your credit report and may offer a “100% money back guarantee.” The truth is that you won’t be able to get your money back. There are no legal ways to remove a legitimate bankruptcy from your credit report. Save your money and avoid these scams.
Removing a legitimate bankruptcy from your credit report is illegal! According to the FTC, it is illegal to get an item off your credit report that is correct.
Here is the one simple solution that works every time: Reestablish your credit after a bankruptcy the same way you established credit the first time.  Start now, don’t delay.
Learning to rebuild credit is simple, just keep in mind that it’s going to take you between 12-24 months to get a credit score over 720, assuming you do it the right way.  The biggest mistake people make is wiping their hands of all credit. Never do that because no credit is just as bad as bad credit.
Please check out my free ebook: “Rebuilding Your Life After Bankruptcy… It’s Easier Than You Think” You will learn a lot of very valuable information.