Veracity found this general question posted, and thought we’d give our insight on the subject:

So I’m ready to apply for a new credit card, and I understand I should pay off the balance on my main card now, so that my “credit utilization” isn’t too high. Once I do that, how long does it take for the credit agencies to see that change and update my credit reports accordingly?

First of all, you’re applying one of Veracity’s key pieces of advice to your own credit repair: paying your bills. At Veracity, unlike some other credit repair agencies, we ALWAYS suggest you pay ALL your bills, and on time. This is the single easiest way to to achieve the best credit possible.

Now, when the question refers to “credit utilization,” we’re pretty sure what they’re referencing is your usage-to-limit ratio. No matter how many credit cards you have, this number is always very important. The more cards you have with little or no balance the better: this shows a low usage compared to a high limit. In most cases, by keeping your overall usage balance to 30 % or less of your overall limit, you can maintain your credit. And lowering that percent (or, as the person in question suggests, paying if off altogether) will likely improve your credit score.

Now, as far as how long it takes credit agencies to notice your progress… Well, it really depends on when the creditors being paid off report to the agencies (referred to as “The Big Three” credit bureaus in the credit industry). For instance, maybe your Capital One account sends its information on the 5th of the month and your Chase account sends in their reports at the 25th of the month. Now, if you pay you make your payments in full on the 15th of the month, that means that you CapOne account will show a balance for 10 days previous, while your Chase account may never show a balance at all.

The best option, clearly, is to pay your balances in full, especially if you’re aiming to achieve an optimal credit score for a home mortgage application. Otherwise, remember that there will always be small swings in your credit report, but so long as you keep your balance below 30 % and make regular, timely payments, your credit score should reflect your diligence in due time.

Nearly six years after we’ve begun repairing consumer’s credit here at Veracity – multitudes of consumers and credit experts are jumping on the credit repair bandwagon, such as Diana Golobay at HousingWire.com, who wrote “Wrecked Credit? No Problem!”:

http://www.housingwire.com/2009/06/16/wrecked-credit-no-problem/

Veracity Credit Consultants likes Ms. Golobay’s enthusiasm for credit repair. She’s got a point that, when it comes to obtaining an auto loan (or a home mortgage), credit repair can lead to better rates, saving you, the consumer, thousands of dollars.

Unfortunately, like many consumers, it appears that Ms. Golobay might be the victim of some less-than-reputable claims. You see, the credit repair agency she speaks of claims that it takes:

“two to four months to clean up a credit report, although the $500 service lasts for a full year, according to company statements.”

Furthermore, Ms. Golobay also writes:

Typical issues Credit Rewind sees in troubled credit include charge-offs, foreclosures, bankruptcy, repossession and “slow pays.” The company touts its service as an utterly legal way to erase those marks from credit scores…

First off, any company that claims to remove bankruptcy legally is not telling you the truth. Why? Because it’s against the law and cannot happen. Bankruptcy is a public record, and public records have scores of information and records linking a person to their bankruptcy.

Bankruptcies are difficult situations, to be sure, but the only thing that can erase a bankruptcy from a credit report is time – typically seven to 10 years. The exception to this rule is if the bankruptcy is an error, often resulting from a merged report or mistaken reporting or identity.

At Veracity, we suggest you be wary of such claims of “erasing bankruptcy,” and if you have one, work on other areas of your credit and wait it out.

Furthermore, Veracity doesn’t put a time line on helping a consumer repair their credit. There are several reasons, including a person’s unique credit situation, along with laws that allow bureaus and creditors 30 days just to respond to disputes, that make “two to four months” difficult to achieve. At Veracity, most of our clients stay with us for six months, at least, and up to one full year to achieve optimal results. And our basic service, plus one-time lifetime membership fee, equals just more than $500 for a full year, yet our clients can cancel anytime free of charge.

Ms. Golobay wraps up her synopsis with this statement:

The emergence of this trend where credit is not an issue and any scratch, dent or crater in credit history is only a small fee away from deletion illustrates an alarming view that consumers deserve the loan they want today no matter how badly they performed on a credit card yesterday.

Veracity feels that might be over-simplifying the matter some. Remember that we suggest always paying your bills on time as the first way to maintaining your credit.

More importantly, we hope consumers realize that repairing credit just isn’t as easy as some people would lead you to believe and that it takes time and perseverance. And under no circumstances would Veracity ever claim that “any scratch, dent or crater in credit history is only a small fee away from deletion.” Legitimate debt and public records cannot just be erased. At Veracity, we never encourage our clients to dodge legitimate debt.

If credit repair is now starting to seem a little more difficult than some people make it out to be, that’s because it is. However, a good, credible credit repair service can take a lot of the hassle out of the process. If you want to know how, call Veracity today at 1.866.518.2194 for a free consultation.

Tough economic times make for a lot of hard-luck stories, such as this unfortunate situation in which a desperate consumer writes financial columnist Harry Gross for some much-needed advice on what to do, and who to trust:

philly/business/20090616_Harry_Gross__Credit_counseling__It_s_not_easy_to_separate_wheat_from_chaff.html

While we at Veracity trust the advice of seasoned experts such as Mr. Gross, we’d like to add our own bit of advice to this situation.

First of all, we agree with Mr. Gross when he says:

The problem of seperating the good from the bad applies to almost every service in some way.

That’s why at Veracity we hate to see one bad apple spoil the bunch. Not all credit repair services are scams and, just like all mechanics are not a scam, either. In fact, many in both industries are accredited, reliable and trustworthy. We suggest that, before committing to any credit repair service, you do your homework by looking for accreditation. You can:

• check out the company’s status with the Better Business Bureau
• read the company’s online testimonials
• compare the company’s policies to YOUR CONSUMER RIGHTS: http://www.veracitycredit.com/vu_rights.aspx

Using that previous link, there are a lot of ways to expose fraudulent credit repair companies. But the bottom line is this: If a credit repair company guarantees anything to you they are breaking the law.

Now that we’ve gotten credibility out of the way, let’s talk briefly about whether credit repair is even the right option.

See, while we appreciate Mr. Gross’ insight into finding a credible credit repair agency, Veracity recommends you consult with a credit expert before even beginning to look into credit repair.

Essentially, Veracity’s theory when it comes to credit repair is this: if you’re in a situation where you cannot even pay your bills on time, then credit repair might not be for you. In the case of the couple in question, seeing as they are “behind in our credit-card payments,” there’s a good chance that they have bigger fish to fry right now. Credit repair cannot necessarily help them and, in fact, could add to their frustrations by becoming another bill to pay.

As we’ve always said, too, every credit situation is unique, and there’s no broad, cut-and-dry solutions to credit repair. If you’re in doubt whatsoever, you can always contact us at 1.866.518.2194 for a free consultation. If we don’t think you’re in a position for credit repair, we’ll say so, and offer you some alternative solutions instead. Because, in the end, the sign of a reputable credit repair service is one that puts your best interests first.

Just a reminder that, just like in any service industry, there are upstanding credit repair companies that really do care about customers, and there are less-than-ethical alternatives. There has been some press recently about credit repair services with poor customer service and credibility. While we hesitate to comment on competitors or the industry at large, here is one tip on finding a quality credit repair company:

One of the simplest ways to determine the credibility of a company is by referencing them through the Better Business Bureau. The internet makes this very easy.

At Veracity, we’ve been accredited by the Better Business Bureau since our inception in 2003. Here’s a link to our BBB search results:

http://denver.bbb.org/wwwroot/sitepage.aspx?site=33&id=27ef87b1-707c-4a9f-8d23-ac349fb6c03b&n=us+credit+find&src=gbox#middle-result

But in the end, Veracity Credit Consultants would like to let the results speak for our the quality of our product and services. You can read some Veracity’s testimonials for further proof.

Good credit is vital to achieving financial peace of mind. Do your homework when it comes to joining a credit repair service. It could be the most important financial decision you’ll ever– make.