Experian BOOST will place all of your on-time payments on your Experian credit record. They won’t report any missed payments. That can help you build a better credit record.

Experian Boost can also report your rent payments if you pay rent with a credit card or through a direct transfer from your bank account.

How Experian BOOST Can Help

Experian BOOST is designed to help the 62 million Americans who have “thin credit files”. Credit bureaus need the information to establish your creditworthiness, and they need payment history to do that.

Experian BOOST Review: The Pros & Cons of Boost

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Experian BOOST gives Experian access to more payment history, which can boost your credit score.

How Boost Affected Me

I signed up for Experian BOOST with the understanding it can only help your credit score, not hurt it.  What I found was that may be true for your score, but that may not be the case when applying for a loan.

Here’s how it shows up on my credit report.

So here’s what happened: I refinanced my mortgage, and my broker said the utilities I had reported on Boost showed up on my credit report as “self-reported debts.”

That created the impression that I had more monthly debt payments than I actually did. Luckily, the amount was too small to affect my debt-to-income ratio seriously. It is something you should be aware of if you’re going to be applying for a mortgage or any other loan where they look at your debt or debt-to-income ratio.

Can Experian BOOST Hurt Your Credit Score?

Late payments usually hurt your credit score, but that isn’t how Experian Boost works.

Experian only considers positive payment history. That means if you missed your utility payment, rent, or cell phone payment, the late payments won’t bring down your credit score.

Using Experian BOOST: 7 Easy Steps

Here’s how it works:

1. Enroll

Go to Experian.com and click on the “Start for free” button. There is no fee for enrolling in Boost.

2. Give Boost Access to your Checking Account

Boost learns how you pay your utility bills by looking for payments you have made to utility companies from your online checking account. You’ll have to give Boost access to your checking account by providing your login credentials.

If your bank requires multi-factor authentication (like a one-time code texted to your phone), you’ll be prompted to enter this code to verify that you want to give Experian access to your checking account.

Banks are very particular about you sharing your log-in credentials. Be prepared to work through this process.  Be careful not to enter wrong information so you don’t accidentally get locked out of your online bank account.

3. Experian BOOST Finds Your Utility Accounts

Experian BOOST will review your checking or credit card account looking for payments to utility companies. Eligible accounts include:

• Cell phone
• Landline
• Internet
• Cable TV
• Satellite TV
• Power/Electricity
• Gas
• Water
• Waste
• Rent

Experian BOOST will automatically detect payments made to these accounts.

4. Select the Accounts You Want Included in Your Credit Report

If Boost finds at least three payments made to a utility account, this account is eligible to be included in your credit report. Boost then presents all eligible accounts to you so you can pick which ones you want to have included in your Experian credit report.

Boost only includes positive payment history in your credit report. It cannot detect any late payments you might have made or payments you might have skipped.

This is an advantage to the consumer but a disadvantage to the lender, who relies on complete and accurate information to make credit risk decisions.  Some lenders may not recognize accounts added by Boost because they consider the information incomplete.

5. Experian BOOST Re-Calculates Your Credit Score.

Credit scoring models are complicated and use a variety of information as part of the score calculation.  Some credit scores do not use utility accounts in their calculations. 

Once your utility accounts are included in your Experian credit report, any credit scoring model that values utility accounts will reflect this information. VantageScore 3 values this information and is the second most popular score after FICO.

All newer versions of these credit scoring models continue to value utility accounts.  This means FICO Score 9 and VantageScore 4 value utility accounts.

Experian BOOST only affects your Experian credit report and credit scores generated by Experian.

6. Experian BOOST Updates Your Score Regularly

Every month Experian BOOST will review your checking account looking for new payment transactions for your utility accounts. It updates your credit report to reflect this information.

7. You Can Delete Accounts

If, for any reason, you no longer want your utility account(s) reported to your credit report, you can delete the account from Boost. Boost will stop searching for the account you delete.

If you no longer want Experian BOOST logging into your online bank account for any reason, you must delete the service from your Experian Profile altogether.

If you change your online bank account log-in credentials, don’t forget to change the same information in Experian BOOST.

Experian BOOST can help you build your credit record with phone and utility payments… and it’s absolutely free!

Try Experian BOOST Now!

Pros & Cons

Experian BOOST can be an effective way to help your credit. That doesn’t mean it’s the right move for everyone.

Pros

• It’s free.
• Adding more positive information to your Experian credit report can have a very positive impact if your credit report has very few accounts.
• Experian claims the average credit score improvement is 14 points. That could make a big difference for some people, especially if you cross over one of the major score thresholds from “poor” to “fair” and from “fair” to “good.”
• If Experian Boost detects rent payments, it will add those to your credit score automatically.
• If you have late payments, it won’t hurt your credit score since Experian doesn’t know about your late payments. Since they won’t be included in your credit report, they can’t affect your credit score.

Cons

• You have to give Experian access to your online checking account.  This is a non-starter for some people who are concerned about the security of their checking accounts.
• You have to pay all of your utility bills from your online checking account.  This is the only way Experian BOOST can scan your checking account to look to payments to utility companies.  This means you can’t use a credit card to pay your bill and earn reward points.
• It only works for people who already have a credit file.
• Because Experian BOOST only reports positive payments, some lenders may not use these accounts when they calculate your credit score.
• Experian BOOST only helps your Experian score.  It won’t help your scores at the two other major credit bureaus, TransUnion and Equifax.

Experian BOOST works best for people with thin credit files. If you have 20 years of payment history, have owned multiple credit cards, and had a car loan and home loan, adding proof of utility payments will not have the impact that it would have for someone with a thin credit file.

Does Experian Boost Work?

Now let’s talk turkey. Does it actually work?  The answer is yes!

But how much does it really help?

It depends on your starting credit score. The average consumer saw their credit score go up 14 points. If your credit is 579 or less, you could see an even bigger increase. Eighty-six percent of people in this range saw an average increase of 21 points.

Considering how easy it is, that’s a significant increase.

Like most credit-building tools, Experian Boost will be most effective if you have a thin credit file. It’s a useful tool for people who don’t have many records in their credit files or those who are just beginning to build credit.

Is Experian BOOST Legal?

You might wonder if all of this is legal. Can Experian expect you to give them access to your bank history so they can see your payment records?

Rest assured that Boost is 100% legal. The service is optional.  You do not have to participate.  As for their access to your records, that’s Experian’s entire business model. They are a consumer reporting agency.  Every time a credit card company or lender has sent Experian information about you, you have given them permission to do so (probably in the fine print when applying for a new credit card or loan, which few of us ever read).

Is Experian BOOST Safe?

Anytime you’re dealing with your finances, you want to take precautions. (Identity theft is real!)

Experian BOOST is safe. The system uses use 256-bit SSL encryption, which is government-level security.

Experian will review your bank records to find qualifying payments made to utility and phone companies. You will have to give Experian access to your account.

They’re limited to read-only access. That means they don’t store your login information and can’t make any changes to your account.

Experian BOOST Support

Experian BOOST is easy to use. Visit Experian.com and click “Sign In” in the upper right corner to log in.

The service is free, but they ask you to upgrade each time. To access your account, just click the option that says “No, Keep My Current Membership.”

Navigating to Experian BOOST is easy. Click the menu button and select “Experian Boost” under the “Reports & Scores” section. If you hit a snag, you can call customer support at 866-617-1894.

It helps to have your Member ID number when you call. You can find it by clicking the menu button and then going to your profile.

If you want to cancel your account, it’s easy to do with the automated phone system.

Experian BOOST can help you build your credit record with phone and utility payments… and it’s absolutely free!

Try Experian BOOST Now!

Other Ways to Add Payments to Your Credit Report

There are several other systems that let you add regular payments to your credit report.

Experian RentBureau adds rent payments to your Experian credit report. It’s free and easy to use. Your landlord will have to be willing to participate.

Rent reporting services like Rent Reporters, Boom, and LevelCredit will report your rent payments to the three credit bureaus. You will have to pay a fee to use these services but your landlord doesn’t have to agree to participate.

eCredable Lift is a service similar to Experian BOOST but run by TransUnion. While Experian BOOST is free there’s a fee to use eCredable Lift. Using both Experian BOOST and eCredable Lift will place your utility payment records on two of your three credit reports.

These services have limitations. The change in your credit score won’t be dramatic, and the payments may not show up on all of your credit reports.

FAQs:

What bills qualify for Experian BOOST?

Here are the bills that qualify for Experian BOOST:
1. utility bills
2. cable bills
3. cell phone payments
4. streaming service payments

How do I add bills to Experian BOOST?

You can add your bills to Experian BOOST by following these three steps:
1. Connect your bank account
2. Experian BOOST automatically finds eligible accounts
3. Pick accounts you want to include in your Experian credit report

How much does Experian BOOST cost?

Experian BOOST is free of charge for everybody who signs up as it is created to help as many people as possible.

How does Experian boost your credit score?

Experian BOOST helps increase your credit score by adding more positive information to your Experian credit report.

Can Experian BOOST hurt your credit?

Using Experian BOOST will never cause your credit score to fall; but, while linked, your score may fall for the typical reasons that credit scores fall, such as missing a payment or making a late payment.

The post Experian BOOST™ Review: The Pros & Cons of Boost (2024) appeared first on FinMasters.

If you have $10,000 to $15,000 of IRS tax debt and aren’t sure where to turn, this article is for you.

Most tax debt articles won’t give you all your options.

(They just want to pitch a tax relief company!)

This is NOT one of those articles.

We’ll look at all your best tax relief options to pause IRS collection activities immediately, including applying for debt forgiveness (Offer in Compromise), setting up a payment plan (Installment Plan), bankruptcy, and considerations for doing it yourself (DIY) or seeking help from a tax relief company.

You’re here because you already know that the IRS can garnish wages or file a tax lien on your property. You owe money to the IRS, and it’s reached the point where you need to act.

By the end of this article, you’ll be ready to make a decision about what tax relief option suits you best and whether you should proceed on your own or choose to hire an expert to help.

The Big Problem Owing $10,000 to $15,000 (And 4 Solutions)

Here’s the brutal truth about having $10,000 to $15,000 of IRS tax debt.

But they have no idea what’s going on in your life that makes forking over, say, $13,000 close to impossible.

Fortunately, there are tax relief options to get the IRS off your back and end your tax problems.

• Set up an IRS payment plan
• Apply for an offer in compromise
• See if you qualify for a temporary delay in collection, disaster relief, or innocent spouse relief.
• Find a way to pay

Let’s take a closer look at some ways to pay back the IRS.

Setting Up an IRS Payment Plan

It’s true that you probably don’t have $11,000 or $12,000 laying around to pay back the IRS in a lump sum.

Give yourself a break.  8% of all U.S. taxpayers are delinquent.  You are not alone!

The good news is that the IRS allows you to set up a payment plan, known as an Installment Agreement. You can use IRS Form 9465 to apply for an installment agreement.

Installment plans let you pay over up to 72 months (6 years).

Installment Plan Sample Monthly Payments

Here are some sample monthly payments, including the qualifications for each and the forms needed.  If you cannot afford these payments, you should skip to the next sections to see your other options.

*Monthly payment is an estimate only and does not include an up-front application fee.  The IRS accepts a high percentage of installment plan requests, but acceptance is not guaranteed.  We highly recommend you speak to a tax expert from Optima Tax Relief prior to entering into an Installment agreement or if you cannot afford the monthly payments above.

Please note that interest and penalties can add up fast, pushing your balance into a higher category.  For this reason, we have also created a guide for you showing you how to get out of tax debt if you owe $16,000 to $25,000 to the IRS.

Benefits of Setting Up an Installment Agreement

There are several benefits to an installment agreement.

• Manageable monthly payments.
• Stress relief: the IRS won’t bother you as long as you make your payments.
• Pauses IRS collection attempts.

Just be aware that if you enter into an installment agreement and then have difficulty paying them on time (if you default), the IRS is notorious for demanding the full balance you owe or filing tax liens and IRS levy actions. This may be one reason to try to offer them a lower amount than what you owe them.  (Offer in Compromise)

Quick Tip: Once you start an installment plan, you will have a harder time qualifying for a debt reduction request later.

IRS Payment Plan Qualification and Setup

Acceptance of your installment plan is not guaranteed.  You need to be up to date on all tax filings and other taxes owed, and you must not have already requested an installment agreement in the past 5 years.

If the IRS decides that you can pay your taxes in full, they will not approve the request.

You will use Form 9465 to apply.

Expect to pay between $31 and $225 in setup fees, depending on whether you set up a direct debit from your bank or pay by check and whether or not you use their online application.

The absolute cheapest way to go is to use an online payment agreement (OPA) application at IRS.gov/OPA and set up a direct debit, which only costs a one-time $31 setup fee. Even this fee can be waived for lower-income applicants).

Who is a Good Candidate for an Installment Plan

If you sincerely cannot pay the full lump sum, you are a good candidate for an installment plan.

(There’s a difference between “cannot pay” and “don’t want to pay” )!

Whether your tax debt was incurred in the most recent tax year, or you owe years and years of back taxes, even if you’ve had your wages garnished or the IRS has a tax lien on your property, the installment plan could work for you.

If You Choose an Installment Plan

If you owe $10,000 to $15,000 to the IRS and you choose an installment plan, the installments will be a significant addition to your debt load. You will have to prioritize them over all other debts. Other creditors may push you harder, and their demands may be louder, but none of them can do what the IRS can do.

In a worst-case scenario, remember that many other debts can be discharged in bankruptcy. Tax debts usually cannot be.

The installments will be a burden, but you will need to pay them.

Settling Your Debt for Less if You Owe the IRS $10k-$15k

The first thing most people who have over $10,000 in tax debt want to do is see if they can get the debt forgiven.

An offer in compromise is an offer to settle with the IRS for less than the amount you owe them.

This can work, but it’s far from a sure thing. The IRS accepts only about 40% of the applications it receives for Offers in Compromise.

The IRS will only accept an offer in compromise if they believe that you don’t have the capacity to pay the full amount and that trying to collect from you would be a waste of their time and resources.

This is not about negotiating. The IRS will review your income, assets, and expenses and decide what they think you are able to pay.

But Will You Qualify?

The Offer in Compromise sounds like a dream come true.

The trick is qualifying. It may not be easy. For the 24,000 offers the IRS accepted in 2018, the IRS received 59,000 offers.  In other words, they accepted about 41% of the offers.

The IRS will not accept an Offer in Compromise if they believe you can pay the debt in a lump sum or by payment plan.

In order to qualify, you must offer the IRS an amount equal to or greater than what the IRS calls “the reasonable collection potential.” (RCP). That’s a complicated way of saying you need to offer them whatever they think they can squeeze out of you based on your assets such as your home, cars, investments, and savings, etc.

The good news?

If you’ve got few or no assets and/or very heavy debt, there’s a good chance your offer will be accepted.

Other Options

There are several other possibilities for reducing tax debts.

• Disaster victims. If you have suffered economic loss due to a natural disaster, you may qualify for tax relief in disaster situations.
• Innocent Spouse Relief. If you filed a joint tax return and you have tax liabilities due to the actions of a spouse or ex-spouse, you may qualify for Innocent Spouse Relief.
• Temporary Collection Delay. If the IRS concludes that you have no way to pay your taxes, you may qualify for a temporary collection delay. You will still owe the amount, and it will incur interest. If your financial situation improves, you will have to pay.

They apply to limited numbers of people, but you should still be aware of them because one of them could apply to you!

Making an Offer On Your Own VS. Hiring a Tax Relief Company

In order to apply, you must fill out IRS Forms 656, Offer in Compromise, and 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, or Form 433-B if you own a business.

There’s also an application fee, which the IRS recently increased to $205, effective April 27, 2020.

You can file the forms on your own, but the forms are long and cumbersome and must be filled out perfectly.

Common Offer in Compromise Mistakes

Tax relief expert (and former IRS revenue officer) Jeffrey McNeal says when he processed offers, he saw tons of mistakes made on the forms, even when prepared by CPAs and enrolled agents!

Say, for instance, you owe the IRS $14,000 and submit an Offer in Compromise…

Making sure all the math is right and all fields are filled out properly on Form 433 is just the starting point.

Only 41% of submissions get approved, so it must be done perfectly to give you the best chances.  If it goes to appeal, you will not only need to fill out a form. McNeal states that just about the only ones to win their appeals were people who backed up their claims with:

• The Internal Revenue Code (IRC)
• The Internal Revenue Manual (IRM)
• Existing case law

Ask yourself: Would you be qualified to reference the above in your appeal for tax relief?

The Internal Revenue Code is made up of over 9,000 sections, while the Internal Revenue Manual is made up of 39 parts (also massive), and we know there are tens of thousands of cases in case law.

Knowing what applies and what doesn’t to an Offer in Compromise would be nearly impossible for a non-professional.

Benefits of Hiring a Tax Relief Company

You might think the only benefit to using a tax relief company would be to help reduce a balance.  But after reading hundreds of reviews of tax relief companies, we’ve discovered that tax relief companies help Americans in a variety of ways:

• provide guidance on audits
• help set up payment agreements with the IRS
• help get current on any unfilled tax returns
• some may be able to stop potential penalties such as wage garnishments

Most importantly, they pause the stress of dealing with the IRS. Typically any case submitted to the IRS takes months (or years) to review.  While waiting for their response, the IRS typically suspends any collection activities, and will often life wage garnishments, as is the case with an Offer in Compromise submission.

The key to hiring a tax relief company is choosing the right one to work with. Many of these companies are shady and some are outright scams. Always do your research, read reviews, and select a reputable partner. Never make a decision based on an advertisement or a single review!

Alternative Ways to Pay the IRS

Tax debt is a serious problem. The IRS has powers that no other creditor has and can come after you in ways that no other creditor can. Your first, best option is simply to pay them in any way possible.

Consider these options:

• Borrow from a retirement account, like a 401k or IRA.
• Borrow from your home equity using a home equity loan or HELOC.
• Use a personal loan

Borrowing money isn’t a perfect solution. You will have to make the payments on time or your credit will suffer. If you use your home equity you could lose your home if you default. It’s still better than owing money to the IRS.

Is Bankruptcy a Solution?

Bankruptcy is not a direct solution to a tax debt. Most tax debts cannot be discharged in bankruptcy, so you will have the same tax debt after bankruptcy that you did before.

Bankruptcy could still help. If you are unable to pay your tax bill because you are buried in other debts, bankruptcy could eliminate many of those other debts. You will still owe the tax debt, but you’ll have fewer other demands on your plate.

Bankruptcy is an extreme solution that will only be appropriate if your case is really desperate. Most bankruptcy lawyers offer free consultations, so if you’re considering this option you can try consulting a lawyer to review your options.

Non-profit credit counseling agencies also provide free consultations that can help you clarify your options. They will not be able to resolve your tax debt, but they could help you manage your other debts or decide whether to consider bankruptcy.

The Bottom Line

If you owe $10,000 to $15,000 in taxes, you need to make some decisions and act immediately. We hope this article has helped you clarify your options and decide whether to take a DIY approach or consider retaining a reputable tax relief company.

Get Professional Help!

Compare multiple tax relief companies at one time, pick the best option, and get help managing your tax debt.

Best Tax Relief Companies

The post Best Tax Relief Options If I Owe $10,000 to $15,000 to the IRS appeared first on FinMasters.

Do you owe $16,000 to $25,000 in taxes to the IRS? Are you wondering how to pay them off?

If you’ve asked:

• What’s the cheapest way to pay off the IRS?
• Can my tax debts be forgiven?
• Can I solve this on my own or do I need professional help?
• How do I stop the letters and other IRS actions?

You’re in the right place!

In this article, we’ll look at your tax relief options, including applying for debt forgiveness (Offer in Compromise), setting up a payment plan (Installment Plan), and considerations for doing it yourself or seeking help from a tax relief company.

This article is not another scare piece telling you how the IRS can garnish your wages or file a tax lien on your property. You already know that. We’re going to review your options and give you the information you need to make a decision about your next step, whether it will be on your own or choosing to hire an expert to help.

The Big Problem Owing $16,000 to $25,000 to the IRS

Here’s the brutal truth about having $16,000 to $25,000 of IRS tax debt.

The IRS knows that since you accumulated that much due in taxes, you made some good money along the way. Since you made that money, they assume that you can afford to pay your taxes!

But the truth is that you’re reading this article because you don’t have $17,000 or $24,000 sitting around to pay the IRS back. If that’s true, there are tax relief options you can use to get the IRS off your back and end your tax problems.

• Set up an IRS payment plan.
• Apply for an offer in compromise.
• See if you qualify for a temporary delay in collection, disaster relief, or innocent spouse relief.
• Find a way to pay.

Let’s take a closer look at these methods.

Option 1: Set Up an IRS Payment Plan

Let’s say you owe $18,000 or $19,000 to the IRS but don’t have the money to pay them back.

Give yourself a break. 8% of all U.S. taxpayers are delinquent. You are not alone! In fact, in a recent tax debt study conducted by Solvable, the average IRS debtor in the U.S. owed $16,849.

If you can’t afford a lump sum payment of $16,000 or $22,000, you may be able to set up a payment plan with monthly payments that you can afford.  You can pay over 72 months (6 years).

Installment Plan Monthly Payments

Here are some sample monthly payments, including the qualifications for each and the forms needed.  If you cannot afford these payments, you should skip to the next sections to see your other options.

These requirements will be the same for a debt from $16,000 to $24,999. At $25,000 some new requirements come into play.

*Monthly payment is an estimate only and does not include an up-front application fee.  The IRS accepts most installment plan requests, but acceptance is not guaranteed.

Why Set Up an Installment Agreement

There are many benefits to a payment plan.

• Manageable monthly payments
• Getting the IRS off your back
• Pause IRS collection attempts

Just be aware that if you enter into an installment agreement and then have difficulty paying them on time, the IRS is notorious for demanding the full balance you owe or filing tax liens and IRS levy actions. This may be one reason to try to offer them a lower amount than what you owe them.  (Offer in Compromise)

Quick Tip: Once you start an installment plan, you will have a harder time qualifying for debt forgiveness (Offer in Compromise) later.

Qualification and Setup

For $16,000 to $24,000, acceptance of your installment plan is “Streamlined.”  This means it’s a quick application process but approval is not guaranteed.  If you owe $25,000 or more to the IRS, you will fill out an additional section in Form 9465, and each application will be manually reviewed for approval.

In either case, you need to be up to date on all tax filings and other taxes owed, and you must not have already requested an installment agreement in the past 5 years.

If the IRS believes you can pay your taxes, they will not approve the request.

Fees & Application

If you owe $16,000 to $24,999, you will use Form 9465 to apply. You only need to fill out Part I.

If you owe, $25,000, you need to also complete Part II.

Setup fees range from $31 to $225, depending on whether you set up a direct debit from your bank or pay by check, and whether or not you use their online application.

The absolute cheapest way to go is to use an online payment agreement (OPA) application at IRS.gov/OPA and set up a direct debit, which only costs a one-time $31 setup fee. This could be waived for lower-income applicants.

Who is a Good Candidate for an Installment Plan?

If you sincerely cannot pay the full lump sum you will probably be approved for an installment plan.

(There’s a difference between “cannot” and “don’t want to” pay)!

Whether your tax debt was incurred in the most recent tax year, or you owe years and years of back taxes, even if you’ve had your wages garnished or the IRS has a tax lien on your property, or even if they’ve entered your bank account and withdrawn money, the installment plan could work for you and could immediately pause IRS collection actions.

Can You Do It Yourself?

Yes, you absolutely can, but be very careful! The IRS is quite picky about their forms being filled out perfectly.  Yes, you can do it on your own, but if you run into any questions along the way or want a second opinion, we recommend you contact our friends at Optima Tax Relief.  They’ve helped settle millions of dollars in tax debt.

If You Choose an Installment Plan

If you owe $16,000 to $25,000 to the IRS and you choose an installment plan, the installments will be a significant addition to your debt load. You will have to prioritize them over all other debts. Other creditors may push you harder and their demands may be louder, but none of them can do what the IRS can do.

In a worst-case scenario, remember that many other debts can be discharged in bankruptcy. Tax debts usually cannot be.

The installments will be a burden, but you will need to pay them.

Option 2: Settling Your Debt for Less if You Owe the IRS $16k-$25k

The first thing most people who have over $16,000 in tax debt want to do is see if they can get the debt forgiven.

Tax debt can be forgiven or reduced.

In 2020 alone, the IRS accepted 14,288 “Offers in Compromise” amounting to $261.3 million of forgiven debt. An Offer in Compromise is an offer to settle with the IRS for less than the amount you owe them.

That sounds great, but the IRS accepted only around 40% of the applications it received.

Does it Work?

You’ve probably heard the radio commercials where Freddy owed the IRS $18,000 in back taxes, hadn’t filed his taxes in 5 years, and the IRS had levied his bank account for 25% of his monthly income.  Then Hero Tax Relief company comes along and gets him up to date on Freddy’s filings, gets the IRS out of his bank account, and settles his $18,000 tax debt for $100.

Is this common?

Yes and no.  This sort of result really does happen every day.  (See real examples below from people who owed $16k to $25k)

But in most cases, you won’t settle for $100.

Following the math above, with $261.3 million forgiven divided by 24,000 cases, the average Offer in Compromise accepted is $10,886.

Delinquent taxpayers submit offers for anywhere from hundreds to hundreds of thousands of dollars, but I’d still say this is a good number for you since it’s significantly less than any number between $16k to $25K.

If you settled a $20,000 debt for $10,000 and set up a payment plan for that, you’d still owe but you’d be in much better shape than you were before.

Examples of Success:

I browsed through dozens of testimonials from tax relief companies to find these.  Of course, there were dozens and dozens I found for a higher starting balance. Here were a handful I found for $26k to $50k owed. These should be taken with a grain of salt, as customer reviews aren’t always legitimate!

Please be aware there’s no magic to the starting amounts owed above. Just because you owe $18,000 like Crystal, that doesn’t mean you’ll settle with the IRS for $500. Each individual case is different.

Offer In Compromise (OIC) Requirements – Will You Qualify?

The Offer in Compromise sounds like a dream come true.

The trick is qualifying. It may not be easy. For the 24,000 offers the IRS accepted in 2018, the IRS received 59,000 offers.  In other words, they accepted about 41% of the offers.

The IRS will not accept an Offer in Compromise if they believe you can pay the debt in a lump sum or by payment plan.

In each case, they’ll consider your:

• income
• assets
• debt
• and more!

In order to qualify, you must offer the IRS an amount equal or greater to what the IRS calls “the reasonable collection potential.” (RCP)

The good news?

If you’ve got little to no assets and/or very heavy debt, there’s a good chance your offer will be accepted.

Solvable has a great calculator that will help you estimate whether you can qualify for an Offer in Compromise.

Should You Hire a Tax Relief Company

You can apply for tax relief on your own. The IRS has set procedures and available forms to apply for installment plans, offers in compromise, and other programs that it offers. If you have a relatively simple problem a DIY approach may be what you need.

If your situation is less simple, or if you look at the forms and have no idea where to begin, a tax relief company could be a better option. Just be sure to do your research carefully and select a credible partner. Don’t fall for the first ad you see: there are a lot of players out there who are not credible.

Offer in Compromise Mistakes

In order to apply for an Offer in Compromise, you must fill out

• IRS form 656, Offer in Compromise
• Form 33-A, Collection Information Statement for Wage Earners and Self Employed Individuals
• Form 433-B (if you own a business)

Be careful doing this on your own! You can definitely file the forms on your own, but the forms are long and detailed, and the IRS requires them to be filled out perfectly!

Tax relief expert (and former IRS revenue officer) Jeffrey McNeal says when he processed offers, he saw tons of mistakes made on the forms, even when prepared by CPAs and enrolled agents!

If you mess up the forms, this could lead to rejection or time delays.

To ensure accuracy, you should consider professional help.

Say, for instance, you owe the IRS $22,000 or $23,000 and submit an Offer in Compromise… 

You need to make sure all the math is right, and all fields are filled out properly on Form 433, but that’s just the starting point.

Only 41% of submissions get approved, so it must be done perfectly to give you the best chances.  If it goes to appeal, you will not only need to fill out a form. McNeal states that just about the only ones to win their appeals were people who backed up their claims with:

• The Internal Revenue Code (IRC)
• The Internal Revenue Manual (IRM)
• Existing case law

Ask yourself: Do you feel qualified to reference the above codes and manuals in your appeal for tax relief?

The Internal Revenue Code is a massive document made up of over 9,000 sections, while the Internal Revenue Manual is made up of 39 parts (also massive), and we know there are tens of thousands of cases in case law.

Knowing what applies and what doesn’t to an Offer in Compromise would be nearly impossible for a non-professional.

Why Consider Hiring a Tax Relief Company

A tax relief company probably cannot make your tax debt disappear. That is not a reasonable expectation, and a legitimate company will tell you that upfront. There are still reasons to consider using a credible tax relief company.  They also:

• provide guidance on audits
• help set up payment agreements with the IRS
• help get current on any unfilled tax returns
• some may be able to stop potential penalties such as wage garnishments

Most importantly, they pause the stress of dealing with the IRS – Typically any case submitted to the IRS takes months (or years) to review.  While waiting for their response, the IRS typically suspends any collection activities, and will often lift wage garnishments or even return money levied from your bank account, as is often the case with an Offer in Compromise submission.

Alternative Ways to Pay the IRS

Tax debt is a serious problem. The IRS has powers that no other creditor has and can come after you in ways that no other creditor can. Your first, best option is simply to pay them, in any way possible.

Consider these options.

• Borrow from a retirement account, like a 401k or IRA.
• Borrow from your home equity using a home equity loan or HELOC.
• Use a personal loan

Borrowing money isn’t a perfect solution. You will have to make the payments on time or your credit will suffer. If you use your home equity you could lose your home if you default. It’s still better than owing money to the IRS.

Is Bankruptcy a Solution?

Bankruptcy is not a direct solution to a tax debt. Most tax debts cannot be discharged in bankruptcy, so you will have the same tax debt after bankruptcy that you did before.

Bankruptcy could still help. If you are unable to pay your tax bill because you are buried in other debts, bankruptcy could eliminate many of those other debts. You will still owe the tax debt, but you’ll have fewer other demands on your plate.

Bankruptcy is an extreme solution that will only be appropriate if your case is really desperate. Most bankruptcy lawyers offer free consultations, so if you’re considering this option you can try consulting a lawyer to review your options.

Non-profit credit counseling agencies also provide free consultations that can help you clarify your options. They will not be able to resolve your tax debt, but they could help you manage your other debts or decide whether to consider bankruptcy.

The Bottom Line

If you owe $15,000 to $25,000 in taxes, you need to make some decisions and act immediately. We hope this article has helped you clarify your options and decide whether to take a DIY approach or consider retaining a reputable tax relief company.

Get Professional Help!

Compare multiple tax relief companies at one time, pick the best option, and get help managing your tax debt.

Best Tax Relief Companies

The post Best Tax Relief Options If I Owe $16,000 to $25,000 to the IRS appeared first on FinMasters.

In this post, I’ll give you a quick summary of every type of credit score, tell you which scores are important, and tell you how to check them.

35 Credit Scoring Models and Their Credit Score Ranges

Some of the most commonly cited resources online today are hopelessly outdated, referencing credit scores that are obsolete or have been re-branded. You will find the following to be the most accurate and up-to-date list of credit score types anywhere.

Jump to:

• FICO General Scores
• FICO Industry-Specific Scores
• Newest FICO Score Types
• Alternative Credit Scoring Models
• Credit Scores from Experian, TransUnion, and Equifax
• Re-Branded or Obsolete

FICO General Scores

FICO 8

Introduced in 2009, FICO 8 is the most widely used credit score in America.  All three credit bureaus, Equifax, TransUnion, and Experian, have adopted the score and it is commonly pulled by auto lenders and credit card companies instead of (or on top of) industry-specific FICO scores.  FICO 8 is also one of the only FICO scores you can find for free using services such as Discover Scorecard.

Score Range:
300 – 850

Request Score:
Free or Paid

Contact Info:
www.fico.com
1-800-319-4433

FICO 9

FICO (originally Fair Isaac) created the first FICO score in 1989, and since then has come out with a new scoring model every few years.

The most commonly used score is FICO 8, while the most recent score created in 2014 was FICO 9.

The idea is to continually innovate and improve the predictability of risk. For example, FICO’s earlier models don’t distinguish between an unpaid credit card payment and an unpaid medical bill.  But if you think about it, they should not be on the same playing field.  You have to actively take on credit card debt, whereas medical debt can be thrust upon you.  Failure to repay these debts should not impact your credit score in the same way.  FICO 9.0 has aimed to correct this.

Having said this, lenders can use whatever scoring model they want provided that FICO still sells it, and not all lenders have embraced FICO 9.

Score Range:
300 – 850

Request Score:
Free or Paid

Contact Info:
www.fico.com
1-800-319-4433

Industry-Specific FICO Scores

FICO has also developed scoring models tailored for particular industries, such as the auto, credit card, or mortgage industries.

FICO Auto Scores

The FICO Auto Score is an industry-specific score that places more emphasis and weight on auto-related credit history.  Auto lenders often prefer these “auto-enhanced” scores as they don’t just show an applicant’s general credit history, but a history weighted toward payments on auto loans, lease payments, etc.  There have been many versions of the FICO Auto Score, but the most recent was released in 2016.  

All 3 credit reporting companies have adopted a FICO Auto Score 8 & 9. Each CRC also has a score of its own, Experian’s FICO Auto Score 2, TransUnion’s FICO Auto Score 4, and Equifax’s FICO Auto Score 5.

For more information on FICO Auto Scores, click here

Score Range:  
250 – 900

MyFICO is the ONLY place you can check your FICO Auto Scores

FICO Bankcard Scores

The FICO Bankcard Score is an industry-specific score that places more emphasis and weight on credit card and personal lending history.  Credit card companies and other lenders often prefer these “bank-enhanced” scores as they show a history weighted toward payments on credit cards rather than other types of debt. 

For more information on FICO Bankcard Scores, click here.

Score Range:  
250 – 900

MyFICO is the ONLY place you can check your FICO Bankcard Scores

Credco / FACredco (CoreLogic)

This is not a FICO Score but needs to be mentioned in this section.

Credco is the largest seller of the “Tri-Merge” report (also known as the Residential Mortgage Credit Report or RMCR), a merging of data from Equifax, Transunion, and Experian which Credco sells to mortgage lenders.  While they offer multiple credit solutions, Credco’s flagship report is the Instant Merge.  Click here for a full sample report. Here’s an example of the first page:

According to Credco, it is “the mortgage industry’s most widely used and accepted 3-bureau merged credit report. It is utilized by 19 of the top 20 mortgage lenders and is integrated on over 60 Loan Origination Systems.”

You can request a copy of your Credco report by mailing a copy of the request form here.

You *can’t request your score, but you can get a good idea of what’s in your report by signing up for MyFICO and looking up your FICO 2, FICO 4, and FICO 5 scores and 3 Bureau report.

*Remember, most mortgage lenders don’t pull your FICO 8 or 9. They pull your classic FICO scores: Beacon 5.0 from Equifax, FICO-II from Experian, and FICO Classic 04 from TransUnion.  

Equifax FICO Score 5

This is one of the three FICO Scores almost exclusively used by mortgage lenders for underwriting.  The other two are FICO 2 and FICO 4.  Originally branded under the name Beacon 5.0, it has also been called FICO Classic v5 from Equifax (aka FICO 5 Score).  It has also been known as the Beacon 5 Score or EQ-04. This model was implemented in 2003 and built using data from 1998 to 2000.  Today it is mostly only used by mortgage underwriters.

Score Range:
*300 – 850

MyFICO is the ONLY place you can check your FICO 5 Score

*According to multiple sources here and here, FICO regularly shares with the public that the credit score range for its classic scores, 2, 4, and 5 is 300 to 850.  However, the little-known real-world score range for FICO 5 is 334-818.

Experian FICO Score 2

While this has been known by many names over the years and used for different purposes, today Experian FICO Score 2 is almost exclusively used in mortgage underwriting, along with two other scores, FICO 4 and FICO 5.  A few other names it has been known by are the Experian FICO Risk Model v2, EX-98 (since the score was first introduced in 1998), and Risk Model v2.  

Score Range:
*300 – 850

MyFICO is the ONLY place you can check your FICO 2 Score

*According to multiple sources here and here, FICO regularly shares with the public that the credit score range for its classic scores, 2, 4, and 5 is 300 to 850.  However, the little-known real-world score range for FICO 2 is 320-844.

TransUnion FICO Score 4

FICO 4 is one of the three primary scores mortgage lenders use in underwriting.  The other two are FICO 2 and FICO 5.  Also known as the TransUnion FICO Risk Score Classic 04 (FICO has since dropped the 0 in 04, but it was first included since the score was introduced in 2004).  It’s commonly seen on credit reports as TU-04 or TUC.

Score Range:
*300 – 850

MyFICO is the ONLY place you can check your FICO 4 Score

*According to multiple sources here and here, FICO regularly shares with the public that the credit score range for its classic scores, 2, 4, and 5 is 300 to 850.  However, the little-known real-world score range for FICO 4 is 336-843.

How do you check your FICO Mortgage Scores? Currently, the only way to get these scores is by signing up for MyFICO.  The $29.95 per month plan will show your scores from all 3 credit reporting companies.

NEWEST FICO® Scores

FICO comes out with a new scoring model every few years.  Here are their newest scoring models.

UltraFICO Score

UltraFICO is a tool FICO has developed that allows you to link your banking activity to positively affect your FICO score.  If you’ve seen commercials on Experian BOOST, it’s a similar idea except with Experian Boost, they measure payments to utilities companies, whereas UltraFICO will potentially give you credit for length of time your accounts have been opened and evidence of consistent cash on hand.  

According to FICO, 7 out of 10 people in the U.S. who have had consistent cash on hand and kept positive balances could see an UltraFICO score that is higher than their traditional FICO score.

You can opt-in for free by clicking here.

Alternative Credit Scores

When borrowers have thin credit files, many lenders rely on alternative credit data not found in traditional credit reports (such as rent & utility payments) to make underwriting decisions, called alternative data.

ChexSystems Consumer Score

ChexSystems provides financial institutions with verification services.  They collect and report data on checking account applications, openings, and closures.  While this is mostly used by banks and credit unions to help them decide if they’ll approve you for a new account, some lenders may also use this information to gain more insight into prospective borrowers’ banking history.  Scores range from 100 to 899, with higher scores indicating lower risk.

Score Range:
100 – 899

You can request your score here. 

Clear Early Risk Score by Experian

Also known as the “Clarity Services Score,” it is an alternate credit scoring model lenders may request to predict risk of default.  For example, this model collects information from credit transactions that aren’t included in traditional credit with the goal of providing information about sub-prime borrowers (or borrowers with no traditional credit score) to companies selling to this market such as payday lenders and check cashing services.  

Since Clarity Services has access to 62 million consumers (they’re the largest alternative finance specialty bureau in the US), Experian first sourced their data from Clarity Services, and then acquired them in Oct 2017.  

To request your score, click here to complete their request form.

Credit Optics Score

Created in 2008 by ID Analytics, Credit Optics® (also known as Credit Optics Full Spectrum) is another alternative data score whose goal is to identify applicants who have traditionally been underestimated by the other national credit reporting agencies (the big three).  It provides both traditional and alternative data and is an FCRA compliant credit score.

Learn more about the Credit Optics Score

CreditVision Score

This is a TransUnion score offered to lenders that focuses on helping make auto loan underwriting decisions.  They claim to be the only scores in the market to combine trended data (for example, a credit card user’s last 30 months of balances and credit balance) and alternative credit data, such as payment history and small dollar lending.  They primarily target subprime credit card companies and auto lenders. Credit card companies are using the score to make acquisition/new account decisions as well as to predict closures or attrition of accounts. 

Because the score focuses on data that isn’t traditionally found in the most popular credit scores from the big three credit bureaus, CreditVision Scores are able to score up to 60 million more people than traditional models.  They are also proven to accurately score more than 90% of applicants with thin files or no traditional credit scores. TransUnion sells different versions of the score such as the CreditVision Link Score, CreditVision Bankruptcy Score, CreditVision Auto Score, and CreditVision Income Estimator.

Learn more about the CreditVision Score

FICO Expansion Score

Another alternative data report created in partnership with PRBC (Pay Rent, Build Credit – see below).  It is typically able to score 70-100% of people with no traditional credit score, since it pulls data from sources such as utilities, memberships, property and asset information, and debit data.

JSS Credit Score

Offered by Scorelogix, a pioneer in job risk scoring, the JSS Credit Score (or Job Security Score) is a non-traditional credit score that uses risk factors such as the borrower’s job stability, income, and income sufficiency in judging a potential borrower’s credit risk.  According to “Exposed: Desire and Disobedience in the Digital Age,” the JSS was the industry’s first income-risk based credit score.  While widely referenced online, we have found no mentions of this score in any current marketing collateral from Scorelogix. This score may have been rebranded as the “Ability to Pay Score” (or ATP Score), which also focuses on consumers’ income stress and payment defaults.  Many lenders use the JSS credit score (or ATP Score) in conjunction with traditional credit scores.

For more information, click here

Pay Rent Build Credit (PRBC) Score

PRBC, owned by Microbilt, has developed a score to supplement data pulled by lenders from the big 3 (Experian, Transunion, and Equifax).  It provides a score based on alternate data such as (as its name implies) rental payments. It does not report to the big 3 or affects FICO.  It’s an independent score borrowers can try to get lenders to look at to prove their creditworthiness.

For more information, click here

Score Range: 
100 – 850

To register for an account, click here

RiskView Score

Created by LexisNexis Risk Solutions, RiskView is probably the largest alternative scoring model as it can score up to 90% of people in a lender’s applicant pool who have no traditional credit score.  

In fact, it is so comprehensive that it includes data from over 300 sources including public records and multiple other non-tradeline data sources proprietary to LexisNexis.  Some data that goes into their scoring model is:

• age
• predicted income
• education attributes
• address stability
• voter registration
• property value
• and online purchase activity

In other words, their score is derived from data not available or not used in traditional scoring models at the big three bureaus. According to LexisNexis, using data in the RiskView score, they are able to effectively evaluate the creditworthiness of over 40 million consumers with little or no credit history.  

The score range is from 501 to 900. Additionally, some of the scoring results vary as they target different industries.  For example, RiskView has an auto lending score, bank credit card score, demand deposit account (DDA) score, short-term lending score, retail credit card score, and telecommunications and utility score.

For more information, click here

Score Range: 
501 – 900

Scores can be ordered online here

Proprietary Credit Scores From Equifax, Experian, and TransUnion

Besides providing data to FICO, the big three credit bureaus also have their own proprietary scores, the most famous of which is the VantageScore.

Equifax Credit Score

Not to be confused with any of your FICO Equifax scores, Equifax has also developed its own proprietary score whose range is from 280 to 850.  While the scoring system and its purpose (to assign higher scores to lower risk borrowers) is similar to FICO’s, it is calculated using Equifax’s own model.  This score is not commonly used by lenders.

Score Range:  
280 – 850

TransUnion New Account Score

Formerly known as the TransRisk Score (and later TransRisk 2.0 Score), TransUnion created this score in January 2000 for institutions to better manage their existing accounts.  While the TransRisk Score offered a score range from 100 to 900, the New Account Score offers a score range of 300 to 850 (higher scores equal lower risk) and predicts the likelihood of an existing account holder becoming 90 days delinquent in a 24 month period.  This knowledge allows account managers to make important account decisions and identify their most profitable clients.

For more information, click here

Score Range:
280 – 850

VantageScore Credit Score

The VantageScore was created by the three big credit bureaus, Equifax, TransUnion, and Experian as a rival to the FICO score.  The first two versions of the VantageScore ranged from 501 to 990, but the latest VantageScore 3.0 and 4.0 use the same 300 – 850 range as base FICO® scores.  VantageScores are often offered for free by credit score providers like Credit Karma or Credit Sesame.  See more in our section on VantageScores above.

For more information, click here

Score Range:
300 – 850

FICO 8 vs VantageScore

Both are scoring models or algorithms that take credit report data from Experian, Equifax, and TransUnion and generate a credit score from the data.  FICO 8 is much more widely used.  In fact, it’s the most commonly used credit score by lenders today. VantageScore is used for educational purposes but is also gaining steam as a legitimate contender to FICO. Read our full comparison of VantageScore and FICO 8 for more information.

Obsolete Credit Scores

The following models are either no longer in use or have been re-branded and no longer known by the name below.

Capital One Credit Tracker

Credit Tracker was launched in 2014.  It was replaced by the credit score tool, CreditWise.

Equifax RISK Score

Another proprietary scoring model developed by Equifax.  They market it to lenders not as an underwriting score, but as a portfolio management score as “an enhanced risk model designed to help predict the likelihood of a consumer becoming 90+ days delinquent within 24 months.”  It has not been available to the public since 2018.  If you go directly to Equifax to purchase a credit score, you’ll get a FICO 8 score.

Equifax Score Power

This score used to be an Equifax FICO 04 model but is no longer in use.  It was also known simply as “Score Power.”  The only FICO 4 Score offered today is by TransUnion and is most commonly used in mortgage underwriting.

Experian PLUS Score

Experian used to offer its own proprietary credit score, which ranged from 330 to 830 separate from the FICO score or VantageScore but stopped selling this in 2018.  Now, if you go directly to Experian to purchase a credit score, you’ll get a FICO score.

FICO NextGen Score

In 2001, FICO released this score with the intent that credit card companies would adopt it in their underwriting decisions.  It was branded by each credit bureau under the names: Experian/FICO Advanced Risk Score 1.0 (later 2.0), FICO Risk Score NextGen (formerly known as Precision), as branded by TransUnion, and the Pinnacle 1.0 (later 2.0), as branded by Equifax. 

Despite spending a lot of time and money on the new score, lenders were hesitant to use it. It is now almost universally unused. FICO doesn’t even show you this score as one of their 28 scores provided on MyFICO.com.

Where to Get Your Credit Scores (Free & Paid)

By now, you know you can easily get free VantageScores at many sites like Credit Sesame, but these are only educational scores and often differ greatly from your FICO Scores, the scores actually used by most lenders.

The good news?

FICO works with more than 130 financial institutions to provide free access to FICO® scores for more than 250 million consumer accounts, and we’re about to show you some of them!

Credit Karma has some information on institutions that provide your FICO score for free.

The only free FICO Scores you will find online are your FICO 8 or 9 scores.
The only way to get your other FICO Scores (the ones lenders use specifically for the mortgage, auto, and credit card decisions) is to purchase them from MyFICO for $29.95 per month. There’s no long-term contract, so if you need to know your scores, you can grab them once and then cancel.

Credit Score Providers

The following do not create scores based on their own models. Instead, they provide free or paid credit scores to consumers.

MyFICO.com

This service costs $29.95/month and allows you to access all 28 FICO scores (Auto, Mortgage, Bankcard, and Classic Scores).  This is the only way to check your FICO 2, 4, & 5 mortgage scores.  The FICO 8 scores update in real-time.  All the other scores update quarterly.

Click here for all your FICO Scores.

Credit Karma

Credit Karma offers free VantageScores from Equifax and TransUnion.  They also offer free tips to improve your credit. But beware, they require your DOB and last four of your SSN to get started. They use the data to sell you consumer products like credit cards and consolidation loans.

You can sign up for Credit Karma here.

Credit Sesame

Credit Sesame offers a free educational score, the TransUnion VantageScore 3.0. This score won’t be the same as your FICO Score (you could see a 50 to 100 point difference higher or lower), but it will at least give you an idea of how you’re doing creditwise.

One of the nice things about Credit Sesame is they offer a “Report Card” of sorts called your Score Analysis.  This offers suggestions and recommended products you can take advantage of based on your current credit.  For example, when I got my score above in July 2019, you can see I scored a “D” in the Credit Age category for which they recommended a featured offer to build up my poor age of credit history.  

Click here to sign up for a free Credit Sesame account

Read our full Credit Sesame review

Credit Check Total (CCT)

Credit Check Total doesn’t have its own score. It is a FICO score reseller. They give you access to all three FICO 8 scores for $29.95/mo and offer a 7-day trial for $1. Just keep in mind if you are applying for a home or auto loan, most lenders will not look at your FICO 8 scores.  To get those, you’ll need to sign up for MyFICO. 

You can sign up for Credit Check Total here.

Credit Journey

This is the free credit score offered by Chase.  They offer a TransUnion VantageScore 3.0, and you do not have to be a Chase Bank customer to sign up. They also offer credit alerts and a score simulator.  For the pros & cons of signing up, please see our review of Chase Credit Journey. 

CreditWise

Offered free through Capital One, they also offer a TransUnion VantageScore 3.0.  CreditWise also offers free credit monitoring.  They track your SSN, scan the dark web, and send automatic alerts from Experian and TransUnion.  They also offer suggestions for improving your score ranked by most to least impactful.  

Learn more about CreditWise

GoFreeCredit.com

Offers a free TransUnion Credit Score and $1 Credit Report as part of a 7-day trial of their subscription-based credit monitoring service.

Learn more about Gofreecredit.com

Nav.com

The most popular credit scoring site to offer credit scores to businesses.

Learn more at Nav.com.

The post How Many Credit Scores Are There? appeared first on FinMasters.

If you have bad credit, you’ve probably seen Brandon Weaver offering credit repair advice on YouTube. You may have read his book, “The Easy Section 609 Credit Repair Secret.”   And now you’re wondering if this kid (who looks about 18 years old) is legit, or if he’s just a good marketer.

We’ve got you covered!

If you’ve asked:

• Is Brandon Weaver’s Section 609 loophole legal?
• Do his strategies actually remove negative items from my report?
• Can I actually do this on my own or do I need help?
• How much can I improve my credit score following his advice?

You’re in the perfect place!

In this article, we’ll look at Brandon’s teachings, review his book and YouTube videos, review The Awesome Life Group, and give our opinion about whether Brandon is someone you can trust.

Brandon Weaver: Overview and 5 Key Highlights

Brandon Weaver is a 35-year-old credit repair educator mostly known for his YouTube videos. If you watch him on YouTube it doesn’t take long to realize why he’s so popular.

He’s a good-looking, young guy and he seems like he genuinely wants to help. In an age when there’s so much staged BS out there, I appreciate that his videos are not overly “polished.”  In other words, he starts a video with a rough outline of what he wants to say, but he doesn’t script it all out.

The result is he comes across as sincere, like a regular guy you’d love to hang out with, and he doesn’t push his book on credit services (too much).

A few highlights:

• He got into teaching credit repair because he had a poor credit score and taught himself how to repair it… and it worked!
• He is a prominent YouTube educator.  Many of his videos have been viewed over 100k times, with his most popular video, “How I Fixed My Credit with 609 Credit Repair,” receiving over 3.2 million views.
• He owns www.609creditrepair.com, where he sells 609 credit repair letters and step-by-step video walkthroughs.
• He also owns Awesome Life Group, LLC, where he offers credit repair alongside co-founder, Cornita Pinchinat.
• Just for fun, he has also appeared in a few low-budget movies.  Oh, and he’s ripped.  Check it out.

Let’s dive into what he teaches about credit and whether it’s actually legit.

Brandon Weaver’s Strategies: What Are They and Can I Trust Them?

In other words, if you’re 20 years old and have a bad credit score because you simply haven’t established credit yet, most of his strategies will not work for you.

But if you have negative items on your credit report such as:

• late payments
• charge-offs
• inquiries
• bankruptcies
• repossessions, collections, or judgments

Then you are the type of person Brandon is trying to help.  Notice how his YouTube videos ALL seem to be about “removing” or “disputing” items from your credit report.

His help comes in two ways.

1. He teaches DIY methods (Do-It-Yourself) to repair your own credit using his free or paid videos or his book.
2. He offers professional credit repair services through his company, Awesome Life Group, LLC.

The 609 Credit Repair Loophole

Brandon is most popularly known for exposing this “609 credit loophole” and popularizing the dispute letters you can send the credit bureaus to get negative items removed from your credit file.

So is this a bunch of BS?

As it turns out, no!

This has actually been a common practice for years in the credit industry. Credit repair companies simply call them “dispute letters.”

Brandon is just the marketing genius to come up with a better trademarked sounding name for the strategy (The 609 Credit Loophole), which he popularized on YouTube in 2016.

How it Works

If you have a negative item on your credit report such as a late payment, you simply send a letter to the credit bureaus asking them to prove the debt/negative item really does belong to you.

The credit bureau has 30 days to respond offering proof.  If they can’t, they must (by law) remove the negative item from your credit file.

Get Your FREE Section 609 Credit Dispute Letter Template

“I used your template and I went up 44 points.  Thank you!”  – Rochelle Cooper

Download Now!

Is that Legal?

Yeah, it’s legal.

Under the Fair Credit Reporting Act, consumers have a right to dispute any suspected inaccuracies in their credit reports.

The credit bureaus mess up peoples’ credit files all the time.  You should send dispute letters can even if you think the negative item really belongs to you.

A study by the Federal Trade Commission found that 1 in 20 people have a mistake on one or more of their reports that could result in a negative financial impact.

But I wouldn’t pay for Brandon’s letter templates to dispute an item on your credit report.

There are no “magic words” that get the credit bureaus to remove an item.  The truth is they’re simply inundated and just by sending them a request to verify your debt, they may not have time to respond, so your negative item gets removed.

Of course, you need to send the letters to the right place and include certain items such as your account number, but it’s not that hard.  You can get our free 609 letter templates, which show you everything you need to include, by clicking here.

Negative items on your credit file?

Our 609 credit dispute letters may be able to help get them removed.

Download Now!

Pros & Cons of Brandon Weaver Credit Repair Advice

Here’s the truth:

Brandon’s strategies can work…

… for some people.  People with negative items on their credit that they want removed.

They don’t work when:

• You are just establishing your credit
• You don’t actually put in the work (or hire someone to help you)
• If you don’t have negative items on your report

So if you’re 30 years old and have never missed a credit card payment, but only have a 700 credit score, Brandon’s content is not really for you.

Important:  Brandon teaches credit repair rather than credit-building strategies.  The truth is you shouldn’t just be repairing credit all the time.  You also need to be adding new, positive credit history and types of credit to your file.  This is credit building.

Credit Repair vs. Credit Building

Imagine an old, dilapidated house with a cracked foundation.

You want to build a beautiful home there but first, the house must come down and the foundation must be fixed.

That’s like credit repair (what Brandon teaches).

Credit repair is characterized by words like:

• repair
• remove
• dispute
• fix
• restoration

This is Brandon’s focus:

Now imagine putting up your walls, laying the floors, and adding plumbing, electric wiring, and a roof.

That’s like credit building (Brandon rarely discusses this).

Now, obviously, you can’t build that beautiful home only by getting to a good foundation (credit repair).  You must also add positive items to your credit (credit building).

You can build your credit by doing some of the following:

• Get and use a secured credit card. 
• Take out a credit builder loan
• Report your rent payments to the credit bureaus
• Report your utility payments to Experian

Check out these 11 ways to build credit, 8 strategies for rebuilding credit and these 5 ways to start building credit at 18.

Brandon Weaver on YouTube:  Best Videos & Where to Start

The best place to start is by visiting Brandon’s YouTube channel here.

He organizes his best videos and credit videos by topic there under his “Playlists.”

As you can see, he mostly posts content about removing items from your credit file such as late payments, collections, evictions, student loans, hard inquires, medical collections, and more.  Basically, it’s 99% about credit repair and restoration.

If you’re just starting out with credit repair, I’d definitely check out his #1 most viewed video of all time:  “How I Fixed My Credit with 609 Credit Repair” (3.1 million views)

His other most popular videos are:

• Don’t Pay Collectors / Why You Should Never Pay Collections (300k views)
• Secret Ways to Remove Hard Inquiries from Credit Reports (269K views)
• Can This Letter Discharge Your Student Loans?  (160K views)

Brandon Weaver’s advice: The Big Problem

There’s one serious problem with Brandon Weaver’s claims. That problem is summed up in this claim from his website.

Section 609 of the FCRA does not even deal with disputes or with a credit bureau’s right to report information.

In one of his videos, Weaver claims that “if they don’t have a signed document with your signature on it, they have to remove it [the adverse record]”.

This is also not true. There is nothing in the Fair Credit Reporting Act or any other law that requires a credit bureau to possess or produce an original signed contract.

A dispute letter may, sometimes, succeed in removing a legitimate account. The credit bureau or the creditor may have lost records or may simply fail to verify the account in time. You can’t count on that, and nobody can honestly promise it.

FinMasters Editors

How to Get 609 Credit Repair Letters Free

I personally wouldn’t pay for Brandon’s letter templates to dispute an item on your credit report.

There are no “magic words” that get the credit bureaus to remove an item.

The truth is that dispute letters work simply because Americans inundate the credit bureaus and just by sending them a request to verify your debt, they may not have time to respond, so your negative item gets removed.

Here’s another truth. If an account really, legitimately belongs to you, nothing you do can force the credit bureau to remove it from your report. They do not have to produce a signed contract. There’s no magic trick that will force negative items off your credit report.

Do 609 letters really work?

Sometimes they do, sometimes they don’t. If an account is really an error, the credit bureau is required to remove it. If an account is legit, you might luck out and get it removed, or you might not.

Either way, you need to do it correctly:

Of course, you need to send the letters to the right place and include certain items such as your account number, but it’s not that hard.  You can get our free 609 letter templates, which shows you everything you need to include, by clicking here.

Get Your FREE Section 609 Credit Dispute Letter Template

“I used your template and I went up 44 points.  Thank you!”  – Rochelle Cooper

Download Now!

Review of Awesome Life Group, LLC

The Awesome Life Group, LLC is Brandon Weaver’s credit repair service, which he co-founded with Cornita Pinchinat.  You can find them online at www.theawesomelifegroup.com.

Business Address:
According to Zoom Info, they are located at: 1725 Washington Rd. Ste. 400, Pittsburgh, Pennsylvania, 15241

Business Phone:
(800) 360-3013

Time in Business:
It appears Awesome Life Group began offering credit repair services in Feb 2018, although they were gearing up and planning their launch as early as 2016.

In a Pennsylvania business entity search (public records), you can see they registered their LLC on 12/28/2016.

However, they did not record their Credit Services Organization Bond (a bond that protects credit repair organizations’ clients from any financial losses as a result of poor financial decisions), until 2/12/2018, as you can see here.

According to BondsExpress.com, a credit services organization in the State of Pennsylvania is not allowed to offer services until this bond has been purchased, which is why I suspect they didn’t officially start offering credit repair services until 2018.

The Price

According to his website, they charge a $199 set-up fee as well as $149 per month thereafter with no long-term contract and a 90-day guarantee “if your credit doesn’t improve.”  They also offer credit monitoring for $21.99 per month through Identity IQ.

Their price comes in quite a bit higher than some of the lowest-priced credit repair services. Many services have been around a lot longer and offer packages as low as $99 for First Work Fee and $79.99 per month thereafter.

Services:

For a long time, the only service mentioned on their site was removing negative items.  Now, according to their site, they offer a 3-phase plan to attack your credit.

1. Phase One – They work to remove any negative, inaccurate, or outdated items on your credit file (they send dispute letters).  This can take 1-2 months.
2. Phase Two – If your credit is looking better, they offer counseling and strategies to add positive credit and increase credit lines.  Brandon doesn’t talk about adding positive credit much on YouTube, but I like this phase.  The best approach to raise your credit score is to repair the negative AND build positive credit.  This phase lasts 2-3 months.
3. Phase Three – This is when they give you the green light to apply for that mortgage or auto loan and provide additional consulting as needed.

Here’s a nice testimonial for Cornita and the Awesome Life Group from their site:

The Verdict

I think the verdict is still out on Brandon Weaver’s credit repair service.  It’s very new (just started in 2018) and if there’s one thing I’ve learned in the business, it’s a lot easier to teach than to do.

It also has relatively few reviews compared to our top rated credit repair company, who has hundreds of 5-star reviews.  Nor are they BBB accredited.

That said, the best I can offer is my “gut feeling” that Brandon and his team probably do a great job, and I’m inclined to trust him.  There just isn’t much history there.  But if you know and trust him from his book and videos, I certainly wouldn’t steer you away based on anything I’ve seen.

I would certainly encourage you to compare his service to some our top recommended credit repair companies, however.

Conclusion – We Heart Brandon!

In conclusion, we really like Brandon Weaver.

He’s a talented marketer who has found a way to help a lot of people with damaged credit.  And I don’t think you’ll waste a penny buying his books, templates, or even credit repair.  Although, the jury is still out on The Awesome Life Group as it is so new with few reviews.

But just know there may be other (free) options like our free 609 template letters, or this guide on how to build credit, and you may even want to compare Brandon’s credit repair services to some of these companies that have been in business a lot longer.

The post Can You Trust Brandon Weaver’s Credit Repair Advice? appeared first on FinMasters.

You can’t build credit without using credit. You also have to get credit before you can use it, and it’s hard to get credit with no credit score!

But what if I told you there’s ONE thing you can do to boost your credit fast, that won’t take you longer than 5 minutes and does not require a credit score?!

It’s a credit-building strategy commonly known as the authorized user strategy.

Here’s what you need to know about the strategy and a step-by-step guide to how to implement it.

What is the Authorized User Strategy?

Here’s the strategy in a nutshell:

Your credit report will adopt the card’s payment history, usually resulting in a quick credit score boost for you!

In other words, the payment history of the cardholder becomes YOUR payment history, and you get credit for potentially years of on-time payments.

Quick Note: We sometimes refer to the authorized user strategy as the “piggyback strategy,” since you’re piggybacking on the credit history of a friend or relative.

3 Easy Steps to Be Added as an Authorized User

Here’s how to be added as an authorized user in three easy steps.

Step 1: Find a Friend or a Family Member

Identify your friend or family member with the best credit card for the authorized user strategy.

You want to ask your friends and family members if they use credit cards and if they have any long-standing accounts.

Here’s the ideal account:

• Long-standing Account – Preferably the account has been open for 5 years or more.
• Large credit limit – A bigger credit limit will benefit you more.
• Low balance – a high limit and a low balance mean a good credit utilization ratio, an important component of your credit score.
• Excellent payment history – They haven’t been late on any payments, and the account is in good standing

Step 2: Ask Them to Help You Out

Ask if they’d be willing to do you a big favor and promise them it will be quick, and won’t cost them any money.

Now you need to convince your friend or family member to add you as a user.

Note there is very little risk to them as long as you don’t get a credit card and start making charges.

To ensure that doesn’t happen, tell your new credit partner to request that the card be sent to their address rather than yours. If they have the card, you can’t use it!

Also, assure them that their payment history will be reported to your credit report, but your credit will not in any way be reported to their credit. This is Legit!!

If they need more convincing, ask them to call their credit card company.  Most reps will have heard of this and done it a hundred times and will speak highly of the strategy to help out a friend or family member as a completely legitimate way to help them grow their credit.

Quick Tip: Calm your relative’s mind by assuring them you won’t actually have a card or make charges. To ensure this, you can have your card sent to THEIR address.

You can also direct them to dozens of articles online from reputable sources like Credit Karma, Wells Fargo, and Nerd Wallet on the strategy if you just google “authorized user strategy.”

Also, assure them they can easily call to remove you as an authorized user if anything does not go as planned, and your credit card will immediately be deactivated.

Step 3: Ask Them to Add You as an Authorized User

Ask your relative or friend to call their credit card company and add you as an authorized user.

All it takes is a 2-minute phone call.

Your relative needs to call their credit card company and request they add you as an authorized user to the account.  They will need your:

• Name
• Date of birth
• Social security number

The process is generally fast and easy.

Does Adding an Authorized User Really Work?

Research as well as case studies suggest that the authorized user strategy works.

We actually conducted a nationwide survey on the authorized user effect.

In the survey, 46% of our respondents who were added as authorized users had a credit score of 680 or higher.  Compare that to just 27% of respondents who had a credit score of 680 or higher who had not been added.

We also have experiential evidence.

When I called to add my brother, Mark, to my Chase credit card, he quickly added over 100 points to his credit score in less than 2 months.

He documented the results.  He got a:

• 16-point increase immediately
• 131 points increase the following month (other factors contributed too)

Another authorized user told us she went from zero to a 710 credit score in less than a month.

And not to mention, we’ve read about a thousand reviews online from people who got added to cards and their credit went up.

Yes, it’s possible to increase your score in as little as 30 to 60 days.

Again, you can also google the authorized user strategy, and find hundreds of articles and testimonials supporting the strategy.

The strategy works best for people with no credit and people who are new to credit or have a thin credit file, but we’ve also seen it work for people with bad credit.

How Long Does It Take for an Authorized User to Show on a Credit Report?

Every credit card reports differently but you can expect the account to appear on your credit report 30 to 60 days from the time you get added to the card or tradeline.

What Are the Best Authorized User Credit Cards?

According to credit card experts, the best credit cards for the authorized user strategy are:

• Barclays
• Chase (particularly the Chase Sapphire card)
• Capital One
• Discover

Remember, the “best card” is not necessarily mean the credit card issuer.  You also want it to have a solid payment history, a high credit limit, and a history of several years, if possible.

Why the Authorized User Strategy Works

Getting added as an authorized user to a new credit card helps your credit score for at least three reasons:

1. You inherit the card’s payment history. If the card has an excellent history of on-time payments, that all gets reported to YOUR credit report and helps YOUR payment history.
2. You inherit the card’s age of credit. Another important component of your credit score is the age of your credit accounts.  If the new card has been active for several years, this is a big help.
3. Boosts your credit limit and credit utilization – Say you have a $1,000 limit on your credit card with a $200 balance.  That gives you a credit utilization of 20%.  Then say you get added to a card with a $10,000 limit and balance of $500.  You adopt the credit limit, so now you have an $11,000 limit with a balance of $700, giving you a much lower credit utilization rate of just 6%!

A 6% credit utilization is MUCH better for your credit score than a 20%!

Becoming an authorized user can boost your credit, but the strategy has limits. Creditors that do a hard credit check will know that you are not the one managing the account, and that may affect their decisions.

Here’s the breakdown of the components of your credit score:

Where the Authorized User Strategy Came From

A while back, women had a big financial problem…

When they married, their husbands opened up credit cards in their own names only, without adding their wives as authorized users on the cards.

Perhaps years would go by, with no impact on the wives, until some of those marriages ended in divorce.

At that time, the women realized even though they’d been using credit cards for years, they had NO credit history.

So the authorized user strategy was created to easily be able to add a family member to your card so they could share in your credit history.

But it works for any friend or family member… not just spouses.

Conclusion: Take Action!

The authorized user strategy is an excellent way to establish a payment history, build the age of your credit accounts, and increase your credit utilization. All of those will help you boost your credit score.

Follow the 3 steps above to get a relative to add you as an authorized user, or if you don’t have one, pay someone to add you here!

The post The Authorized User Strategy: A Free, Easy Way to Boost Credit appeared first on FinMasters.

Fingerhut is an online retailer. You can buy items and pay in installments. Your payments are reported to all 3 credit reporting agencies, helping you build credit. Approval is instant and you can qualify with poor credit. Be careful, though: the goods in the store are heavily overpriced.

A Fingerhut account is a useful credit-building tool. It’s free to open an account, it boosts your credit quickly, and just about anyone can qualify.  The downside is that you can only shop in the Fingerhut store and goods in the Fingerhut store are very expensive.

You may feel that the extra cost is worth it for the credit-building impact, but be sure you’re weighing the costs accurately.

Here’s our Fingerhut review showing how it works and how to get started.

Who Is Fingerhut?

Fingerhut was started back in 1948 by William Fingerhut as an automobile seat cover firm. In 1952 they became a mail-order catalog company. Their site carries everything from furniture, bedding, and jewelry to the latest electronics. 

They also offer two different credit accounts through WebBank. One is called the Fetti Account, the other is the more accessible Fresh Start plan, designed for people with no credit or badly damaged credit.. 

Who Is WebBank?

WebBank is an FDIC-insured, state-chartered industrial bank located in Salt Lake City, Utah.

They offer a wide variety of products like savings accounts and time deposits. They also partner with companies like Fingerhut to provide niche financing solutions to businesses and consumers.

Important note: There’s no such thing as a free lunch in the credit-building world. A Fingerhut account can help you build credit, but the goods you’ll purchase are much more expensive than they’d be in other stores. Keep that in mind, and buy only inexpensive items and as few items as possible.

Fingerhut Fetti Credit Account Review

The Fingerhut Fetti Account is an unsecured store credit card, which means that you can only use the card to shop with Fingerhut or its partners.  

You can shop for over 400,000 items, but this account is primarily used to help people establish or rebuild their credit. You would not want to use it for day-to-day shopping.

The main features of the Fingerhut Fetti Credit Account include: 

• No Annual Fee
• 35.99% Interest Rate
• SafeLine Insurance Benefit (Optional)
• Up to $41 Fee For Late Payments Or Returned Payments
• Account Reported To All 3 Credit Reporting Agencies
• Easy Approval Even With Limited Or No Credit History

After you have been approved you’ll be given a credit limit, based on your credit profile. You can make purchases up to that limit. 

You won’t receive a physical card. All transactions are online and you can access your account through the member portal area. 

You have the option to pay off your purchases over time or in full.

If you choose to pay over time, avoid making only the minimum payment. Minimum payments will barely reduce your balance and your interest costs will escalate.

If you aren’t approved for this account, your application will automatically be considered for a FreshStart® Credit Account.

Fingerhut FreshStart Credit Account Review

If your credit is poor you could initially get approved for the Fingerhut FreshStart® Account. 

This account is a type of Installment loan. It involves 3 steps:

• Make a one-time purchase of at least $50.
• Put a minimum of $30 as a down payment on your order. Only a debit card, ACH payment, paper check, or money order can be used for your down payment.
• Pay off the balance in monthly payments split into either six or eight payments.

If you make your payments on time you can get your account upgraded to aFetti Account.

Don’t pay off the item all at one time or you won’t be able to qualify for the upgrade.

This should give you an idea of the fees involved: 

Fingerhut Credit Pros & Cons

The Big Downside: Overpriced Goods

A Fingerhut account carries no annual fee. It will put a revolving credit account on your credit file and report to all three credit bureaus. If you make all payments on time and keep your credit utilization low, you will help your credit score.

There’s still a big cost: a substantial markup on the goods you buy.

Look at this common household purchase from the Fingerhut catalog.

Now look at the same item on Amazon.

That’s a $70 difference in the price of one item. That’s already more than enough to cover the annual fee on a good secured card for people with no credit or bad credit, which will let you shop anywhere.

If you qualify for a Fetti account from Fingerhut you might even qualify for a no-fee secured card, which would be a much better deal.

Steps To Take After Approval

Getting approved for something, no matter what it is, feels good. You feel like you have just won something. Getting approved is just the start.

The point of a Fingerhut account is to build credit. With the prices they charge you would not want to use it for everyday shopping. If you want to build credit effectively there are some things you should be doing with your account.

Buy Smart

Remember that the goods sold in the Fingerhut store are more expensive than the same goods in other stores. That’s how they make their money and cover the risk of extending credit to borrowers with poor credit scores.

You can minimize the price damage with a few steps.

• Buy only what you need.
• Buy only inexpensive items. The higher the price, the bigger the markup.
• Select the longest possible payment term.
• Don’t buy again until the last item you bought is paid off.

This will maximize the benefit to your credit score and minimize the damage that the overpriced items do to your budget.

Make On Time Payments

I am sure you are tired of seeing everyone saying “on-time payments”. It gets repeated for a reason: it’s the single most important part of building your credit score.

If you use a product designed to build credit but fail to make on-time payments you will damage your credit instead of building it.

No matter what, avoid late payments.

Don’t Make Minimum Payments

Making the minimum payment will keep your account in good standing and avoid damage to your credit. It can also cost you a lot of money.

When you make a minimum payment you are paying off the interest and a small amount of the cost of your purchase. You are barely reducing your balance. If you get in the habit of making minimum payments you will pay more and more interest and the total cost of your purchase will rise dramatically.

A minimum payment may be a way out of you are in a short-term cash crunch, but do everything you can to stay out of the minimum payment trap. It’s a very expensive way to build credit.

Keep Credit Utilization Low

Another factor to consider is credit utilization. This is the percentage of your credit limit that you actually use. If you have a $500 limit on your Fingerhut card and you charge $250 worth of items, your credit utilization is 50%.

You want to keep your credit utilization low, and you want to avoid spending a lot of money in a store that has high prices. You can do that by buying only inexpensive items and buying only one thing at a time. Make another purchase only when you have paid your previous purchase off.

Try to use no more than 30% of your approved limit at any given time.

How Do I Cancel My Fingerhut Account?

You can close your account at any time by writing to them at:

WebBank, Fingerhut Credit Account Services
P.O. Box 0260
St Cloud, MN 56395-0260

You cannot use your account for any purchases after you cancel or close your account.

If you don’t pay any remaining balance in full when you cancel, your outstanding balances will continue to accrue interest charges. 

Is There A Fee For Closing My Fingerhut Account?

Outside of the fees associated with your remaining balance, there is no fee for closing your account.

A Better Alternative

A Fingerhut account is easy to open and will place a revolving credit account on your credit record. If you make your payments on time that will help you build credit.

The downside is that the goods you buy are more expensive than they would be in other stores.

If you want to build credit without buying overpriced goods, consider applying for a secured credit card. You’ll get the same impact on your credit and you can use your card in any store. That means better deals on the goods you buy!  

The post Fingerhut Credit Card Account Review (2023) appeared first on FinMasters.

The credit repair industry has a bad reputation, and some of it is deserved. Some companies are very sketchy, and some are outright scams. Still, there are companies out there that provide legitimate services, and they have been able to help many clients.

Bad credit closes doors. These credit repair companies can help!

Do you need a credit repair company? In most cases, it only makes sense to retain a credit repair company if you have a significant number of negative entries on your credit report. If a few accounts are doing the damage, a DIY approach might serve you better.

Our Top Rated Credit Repair Companies

We selected these companies as the best overall choices for credit repair. The detailed reviews should help you choose the one that best fits your situation.

Remember that credit repair is not magic. Credit repair companies will identify and challenge errors and problematic accounts. They may be able to get legitimate accounts removed from your record if the credit bureau is unable to verify the account information or the creditor does not provide it.

No credit repair company can guarantee that legitimate accounts will be removed from your record or that they will give you a new credit identity. If you hear those promises, look for another service.

BEST OVERALL

Credit Saint

Competitive pricing, multiple plan options, transparent billing, a solid track record, and a 90-day money-back guarantee deliver the top spot for this veteran credit repair firm. Learn more

Initial Cost:
$99 or $195

Monthly Fee
Three Plans: $79.99, $99.99, and $119.99

Guarantee:
90-day money-back guarantee if no negative items are removed

Visit Credit Saint

BEST FOR SIMPLE PRICING

Sky Blue Credit Repair

If your credit repair needs are not complex and you don’t want to choose from a menu of different plans, Sky Blue could be right for you. One price, one plan, one service. Learn more

Initial Cost:
$99

Monthly Fee:
$99

Guarantee:
Must request a refund within 90 days.

Visit Sky Blue

BEST RANGE OF SERVICES

The Credit Pros

The Credit Pros go beyond credit repair, offering a range of services that includes identity theft monitoring, budgeting software, bill reminders, and even prescription drug discounts. Learn more

Initial Cost:
Three Plans: $119, $129, or $149

Monthly Fee:
Three Plans: $69,
$129, $149

Guarantee:
90-day limited money-back guarantee.

Visit The Credit Pros

BEST FOR DISCOUNTS

Ovation Credit

Ovation’s prices are in the middle of the pack, but the Company offers discounts for senior citizens, couples, and military members. If you’re in one of those groups, this might be your top choice. Learn more

Initial Cost:
$89 (for both plans)

Monthly Fee:
Two plans, $79 and $109

Guarantee:
No-Risk Refund Policy

Visit Ovation

LEGAL EXPERTISE (BUT BE CAREFUL)

Lexington Law

We wanted to include Lexington Law because they are one of the most visible and prominent credit repair firms in the country. They have also faced a large judgment for illegal marketing and billing practices following a suit by the Consumer Financial Protection Bureau. Learn more

Initial Cost:
$6.99

Monthly Fee:
Four Plans: $59.95, $95.95,  $119.95, $139.95

Guarantee:
None

Visit Lexington Law

1. Credit Saint

Credit Saint offers three different plans, allowing you to select the one that best fits your credit repair needs. You’ll get a free consultation, where you can review your situation and discuss the pros and cons of the different plans. 

They offer a 90-day money-back guarantee. If you haven’t seen results by then, they will refund your money.

You’ll get a private online account dashboard displaying a continuously updated record of progress and activity on your account.

How it Works

Credit Saint offers three monthly plans: Credit Polish, Credit Remodel, and Credit Premium. Here’s a breakdown of the differences.

	Credit Polish	Credit Remodel	Credit Premium
Disputes per billing cycle	5	10	Unlimited
Hard inquiry disputes
Credit monitoring
Credit score analysis
Credit score tracker
Cease and desist letters
Initial fee	$99	$99	$195
Monthly fee	$79.99	$99.99	$119.99
Cost for 90 days	$338.97	$398.97	$554.97

The main difference between these plans is the number of disputes that Credit Saint will file for you. You will have to determine how many disputable accounts you have on your credit record. If you only have five disputes to file you won’t gain much from paying for the more expensive plan!

These prices are relatively high, but Credit Saint makes up for that by delivering premium service.

If you’re looking for a premium full-service credit repair company, Credit Saint will be on your shortlist.

Credit Saint Reviews

Online reviews are a mixed indicator. People with negative experiences are more likely to write reviews than those who have positive experiences. Many people who report negative experiences had unrealistic expectations or did not fully understand the service. Some customers are simply impossible to please.

On the other hand, some companies have been known to seed inauthentic positive reviews on popular review sites.

We’ll present a summary of review results, but please read them critically. They are a useful tool but may not always give an accurate impression.

*Better Business Bureau (BBB) ratings are based on responsiveness to complaints, not customer reviews.

Get Your FREE Credit Evaluation Today!

Want to learn more? Read our full Credit Saint review

2. Sky Blue Credit Repair

Sky Blue offers one of the simplest credit repair products in the industry. There’s only one plan. You’ll pay $99 to set your program up and $99 a month until your disputes are resolved.

Sky Blue clearly believes that their program will satisfy their clients. They offer a 90-day no-questions-asked money-back guarantee. If you’re not happy, they’ll give your money back.

How it Works

Sky Blue will dispute up to 15 records (five per credit bureau) each month. This is lower than some competitors, but the lower cost makes Sky Blue a great choice for people with a limited number of disputable records.

Sky Blue does not offer credit monitoring. They do provide advice on rebuilding your credit. If required, Sky Blue will provide debt validation, goodwill letters, cease and desist letters, and mortgage preparation at no extra cost.

You can schedule a free consultation by filling in the form on their website. You can also reach their sales team by phone at: (800) 790-0445 (9 AM – 7 PM, Monday-Friday, EST).

Here’s how Sky Blue pricing works:

• There is no initial cost for signing up for their service.
• The monthly fee is $99/month.
• For 90 days of service, your total cost will be $396.
• If you join as a couple the second account will have 50% off.

If you’re looking for a simple package focused entirely on credit repair with a limited number of disputes, Sky Blue is a great option.

Sky Blue Reviews

Online reviews are a mixed indicator. People with negative experiences are more likely to write reviews than those who have positive experiences. Many people who report negative experiences had unrealistic expectations or did not fully understand the service. Some customers are simply impossible to please.

On the other hand, some companies have been known to seed inauthentic positive reviews on popular review sites.

We’ll present a summary of review results, but please read them critically. They are a useful tool but may not always give an accurate impression.

*Better Business Bureau (BBB) ratings are based on responsiveness to complaints, not customer reviews.

Contact Sky Blue Now!

(Free Consultation, 90-Day Money-Back Guarantee)

Want to learn more? Read our full Sky Blue review

3. The Credit Pros

Most credit repair companies focus on disputing inaccurate records on your credit report or other records that they think could be removed. The Credit Pros provides this service, but they will take it a step further, helping you to rebuild your credit after you repair it. 

The Credit Pros packages include identity theft monitoring, debt management tools, and financial planning services that will help you keep your credit out of trouble and add positive records to replace the negatives you’re leaving behind.

How it Works

The process starts with a free consultation. A representative of The Credit Pros will review your credit report, assess what the Company can do to help you, and discuss your options.

Services are divided into three packages.

• The Money Management package includes budgeting systems, bill reminders, and identity theft services. It does not include credit repair services.
• The Prosperity package includes all of the money management functions and adds credit repair services, including credit bureau disputes, creditor interventions, cease and desist letters, and more.
• The Success package includes all of the above functions plus credit reports and scores for all three bureaus and access to a credit-builder loan.

Here’s a full comparison of inclusions and prices.

	Money Management	Prosperity Package	Success Package
Budgeting System
Bill Reminders
Real-Time Account Sync
TransUnion Alerts
ID Cover Darkweb Monitoring
One-Bureau Credit Report and Scores
Letters of Reference
Cease & Desist Letters
Creditor Interventions
Credit Bureau Challenges (all three bureaus)
Three-Bureau Credit Reports and Scores
Credit-Builder Loan
Initial fee	$119	$119	$149
Monthly fee	$69	$129	$149
Cost for 90 days	$326	$506	$596

The Money Management package includes some basic services but does not address credit repair. The Prosperity package moves up to actual credit repair, while the Success package, the most expensive, adds only a few features that may not be worth the added cost.

The credit Pros offer a 24/7 online client portal and a mobile app that lets you check your account status. All plans run month to month and you can cancel any time.

There’s a money-back guarantee: if they don’t assist in sending any disputes within the first 30 days or no items were removed within the first 90 days you get your money back.

If you want to combine credit repair with a full set of identity protection and credit improvement services, The Credit Pros could be your preferred option.

The Credit Pros Reviews

Online reviews are a mixed indicator. People with negative experiences are more likely to write reviews than those who have positive experiences. Many people who report negative experiences had unrealistic expectations or did not fully understand the service. Some customers are simply impossible to please.

On the other hand, some companies have been known to seed inauthentic positive reviews on popular review sites.

We’ll present a summary of review results, but please read them critically. They are a useful tool but may not always give an accurate impression.

Visit The Credit Pros!

(Free Consultation, Includes ID Theft)

Want to learn more? Read our full The Credit Pros review

4. Ovation Credit

Ovation offers a combination of credit repair, credit education, and credit monitoring services. You’ll get a dedicated case supervisor who will walk you through the entire process, helping you understand what they are doing and why.

Ovation offers two packages, so you have a clear, easy choice of which best fits your needs. Both packages give you access to financial planning, budgeting, and debt management tools

Ovation offers discounts of up to 20% for couples, members of the military, and senior citizens.

How it Works

Ovation offers a free consultation. A case manager will review your credit situation and explain what the Company can do to help you improve it. Once you select a plan Ovation will assign a case manager who will stay with you for the duration of the service, assuring that you’ll always be talking to someone who knows your case.

Ovation expects customers to be active participants in the credit relief process. This means you may be able to do more than you would with other companies. That could be a problem for some people, but remember that the process is designed to be educational and give you the tools to help yourself in the future.

Ovation claims that they have corrected 1 million credit profiles and that the average customer sees 19 improvements in their credit report.

Ovation offers two plans. The initial fee for both plans is $89.

• Essentials offers personalized dispute options: you’ll dispute items that ar inaccurate, complete, or unverifiable. You’ll have a dedicated case adviser and financial management tools. The monthly fee is $79, so for 90 days of service you’ll pay $326.
• Essentials Plus includes unlimited dispute, validation, and goodwill letters, along with TransUnion credit monitoring and financial management tools. The monthly fee is $109, weighing in at $416 for 90 days.

	Essentials Plus	Essentials
Personalized dispute options
Expert team of case advisors
Financial management tools
Unlimited validation letters
Unlimited goodwill letters
Ovation recommendation letter
TransUnion credit monitoring
Initial fee	$89	$89
Monthly fee	$109	$79
Cost for 90 days	$416	$326

The plan you choose will depend on your credit situation: if you have a relatively low number of negative entries on your credit report, the Essentials plan should be all you need… and remember those discounts!

If Ovation fails to provide the agreed-upon services in a given month, you won’t be charged for that month.

If you want to take an active role in credit repair and learning about the process is important to you, Ovation could be your top pick.

Ovation Reviews

Online reviews are a mixed indicator. People with negative experiences are more likely to write reviews than those who have positive experiences. Many people who report negative experiences had unrealistic expectations or did not fully understand the service. Some customers are simply impossible to please.

On the other hand, some companies have been known to seed inauthentic positive reviews on popular review sites.

We’ll present a summary of review results, but please read them critically. They are a useful tool but may not always give an accurate impression.

Contact Ovation Now!

5. Lexington Law

We had some doubts about including Lexington Law in this roundup. The Company was sued by the Consumer Financial Protection Bureau in 2019 for alleged illegal fees and sales practices. They also recently settled a class action suit over alleged illegal telemarketing practices.

Those legal issues make it difficult to recommend the Company.

On the other hand, Lexington Law is one of the best-known and most dominant credit repair companies in the country. It’s hard to discuss credit repair without at least mentioning them.

We’ll lay out the pros and cons so you can make your own decision.

Update

On August 28, 2023, the CFPB announced that it had entered into a proposed settlement with Lexington Law. The settlement will have to be approved by the court.

The settlement imposes a $2.7 billion judgment and over $64 million in civil penalties against Lexington Law and its partner companies. The group behind Lexington Law is also banned from any telemarketing activities for 10 years.

Lexington Law has filed for Chapter 11 bankruptcy protection, laid off 900 employees, and shut down 80% of its operations. It is not clear how much of the fine will be paid or whether Lexington Law, CreditRepair.com, and their related companies will remain in business.

How it Works

Lexington Law has been in business for 18 years and is one of the largest credit repair companies in the country. That scale has allowed them to develop a sophisticated set of tools, including a highly rated credit repair app.

Lexington Law services follow a three-stage process.

• Setup and Discovery. The Company will review your credit report and determine what items are causing damage and which ones can be challenged.
• Challenge and dispute. Lexington Law will dispute these items and ask for verifications.
• Manage and monitor. The Company will continue to monitor your credit and adress new issues as they appear.

Initial services: Lexington Law does charge an initial start-up fee of $6.99 that is used to purchase a copy of your TransUnion credit report, with services beginning a few days later.

Lexington Law offers three service levels. You can see what Lexington Law plans include and what they cost in the table below.

	Premier Plus	Concord Premier	Concord Standard	Lexington Essentials
Equifax/TransUnion disputes per cycle	8	6	6	4
Experian disputes per cycle	3	3	3	3
Creditor interventions per month	6	3	3	2
InquiryAssist
ID Theft Insurance
DebtHandler
Report Watch Alerts
TransUnion FICO Score
Lost Wallet Protection
Personal Finance Manager
Junk Mail Reducer
TransUnion Credit Monitoring
MoneySmart Alerts
Monthly fee	$139.95	$119.95	$99.95	$59.95
Cost for 90 days	$426.84	$366.84	$306.84	$179.85

Lexington Law has a deep and detailed information section on its website. These resources are available to everyone, not just clients, and they are a great source of information for anyone considering credit repair.

You’ll have to decide whether the experience and the superior tools outweigh the recent history of legal problems.

Lexington Law Reviews

Online reviews are a mixed indicator. People with negative experiences are more likely to write reviews than those who have positive experiences. Many people who report negative experiences had unrealistic expectations or did not fully understand the service. Some customers are simply impossible to please.

On the other hand, some companies have been known to seed inauthentic positive reviews on popular review sites.

We’ll present a summary of review results, but please read them critically. They are a useful tool but may not always give an accurate impression.

*Better Business Bureau (BBB) ratings are based on responsiveness to complaints, not customer reviews.

Contact Lexington Law Now!

Want to learn more? Read our full Lexington Law review

How to Choose a Credit Repair Company

There are hundreds of credit repair companies out there. Many of them advertise heavily. You may have seen companies promising to remove legitimate entries from your credit report, or even offering a “new credit identity”. How do you know what to believe?

Understand Credit Repair

Before you start shopping for a credit repair service, you need to fully understand what credit repair is and what credit repair companies do. Our article introducing credit repair is a good place to start.

Know Your Rights

The credit repair industry is regulated by the Credit Repair Organizations Act. This law prohibits false or distorted claims and requires companies to provide you with information on their services. Companies cannot demand upfront payment. They must offer written agreements and you have the right to cancel an agreement under some circumstances.

You should know your rights before you contact any credit repair company.

Check the Price

Most credit repair companies charge a start-up fee that covers the time they spend analyzing your reports to see if they can help you. 

If they determine you’re a good candidate for credit repair, you pay on a monthly basis while they work to clean up your report. 

Obviously, you want to choose a company that prices its services fairly.

Check the Customer Service

You also want to choose a company you’re comfortable working with. Ask these questions:

• What’s their customer service like? 
• How responsive are they?
• How many items will they dispute per month?

Ask questions before you sign up and make sure you understand the scope of the service.

Taking Action

There is no reason to have bad credit, all it takes is a bit of time and a bit of work. The fastest solution will be to go with a credit repair company and let them do their magic.

Whatever you choose, the first and most important step is to start!

FAQ:

The post 5 Best Credit Repair Companies of 2024 appeared first on FinMasters.

If you owe $26,000 to $50,000 in taxes, you’re looking for real answers.

You don’t need to hear about how the IRS can garnish your wages or levy your bank account.  You likely already know (or are even experiencing this)!

What you need to know is:

• What’s the cheapest way to pay off the IRS?
• Can my tax debts be forgiven?
• Can I solve this on my own or do I need professional help?

In this article, we’ll look at all of your options. None of them will make your tax debt go away, but one of them might provide a way to manage your problem. Hopefully, it will help you make the right decision about your next step.

The Biggest Problem Owing $26,000 to $50,000 to the IRS

Let’s say you owe $30,000 of IRS tax debt.  You most likely can’t cut a check for that.

But the IRS doesn’t see it that way.

In fact:

The IRS is MORE likely to think you can pay than someone who owes a lesser amount.

They know that you must have earned a LOT of money to rack up that much in taxes. For example, maybe you earned $100,000 in a single tax year, which created a tax burden of $35,000.  But after late fees and penalties, it grew to 40k.  So because at some point you earned that much money, they automatically assume you should be able to pay your taxes!

But the truth is:

Whether it’s $45,000 or $50,000 that you owe to the IRS, either way,  you don’t have that sort of money sitting around to pay them back.

If that sounds like your situation, don’t panic.   There are many things you can do to get the IRS off your back and resolve your tax problems including:

• Set up an IRS payment plan
• Apply for an offer in compromise
• See if you qualify for a temporary delay in collection, disaster relief, or innocent spouse relief.
• Find a way to pay

Let’s take a closer look.

Option 1: An Installment Agreement

Let’s say you owe $30,000 or $50,000 to the IRS, but don’t have the money laying around to pay them.

Give yourself a break.  8% of all U.S. taxpayers are delinquent.  You are not alone!

The good news is the IRS allows you to set up a payment plan, known as an Installment Agreement, which you can apply for using IRS Form 9465.

So even if you can’t afford a lump sum payment of $35,000 or $40,000, you may be able to set up a payment plan with monthly payments that you can afford.  The beautiful thing about the installment plan is they let you pay over 72 months (6 years).

You will pay an up-front fee to set up an installment agreement. The fee is currently $105 for non-direct debit agreements, $52 for direct debit agreements, and and $45 for reinstatements. The fee is reduced to $43 for taxpayers with income at or below poverty guidelines established by the certain U.S. Department of Health and Human Services poverty guidelines.

Installment Plan Monthly Payments

Here are some sample monthly payments including the qualifications for each and the forms needed.  If you cannot afford these payments, you should skip to the next sections to see your other options.

Please note that from $26,000 to $50,000, you won’t see any changes in the qualifications or forms needed.  In fact, they’re even the same as if you owe the IRS $10,000 to $15,000 in taxes or $16,000 to $25,000 in back taxes.  But at $26,000 we have some new requirements.

*Monthly payment is an estimate only and does not include the mandatory up-front application fee.  

The IRS accepts a high percentage of installment plan requests, but acceptance is not guaranteed.

Why Set Up an Installment Agreement:

There are many benefits to a payment plan.

• Manageable monthly payments.
• The Relief of getting the IRS off your back.
• The IRS will pause collection attempts

Just be aware that if you enter into an installment agreement and then have difficulty paying them on time, (if you default) the IRS is notorious for demanding the full balance you owe or filing tax liens and IRS levy actions. This may be one reason to try to offer them a lower amount than what you owe them.  (Offer in Compromise)

Quick Tip: Once you start an installment plan, you will have a harder time qualifying for debt forgiveness (Offer in Compromise) later.

Qualification and Setup

For a debt of $26,000 to $50,000, you will fill out an additional section in Form 9465, and each application will be manually reviewed for approval. 

To qualify you will need to be up to date on all tax filings and other taxes owed, and you must not have already requested an installment agreement in the past 5 years.

If the IRS believes that you have the capacity to pay your taxes, they will not approve the request.

Fees & Application

Since you owe between $26,000 to $50,000, you will use Form 9465 to apply and will need to fill out Part I and also complete Part II.

Setup fees range from $31 to $225, depending on whether you set up a direct debit from your bank or pay by check, and whether or not you use their online application.

The absolute cheapest way to go is to use an online payment agreement (OPA) application at IRS.gov/OPA and set up a direct debit, which only costs a one-time $31 setup fee (This could be waived for lower-income applicants).

Who is a Good Candidate for an Installment Plan?

First, you sincerely cannot pay the full lump sum.

(There’s a difference between “cannot” and “don’t want to” pay)!

Whether your tax debt was incurred in the most recent tax year or you owe years and years of back taxes, even if you’ve had your wages garnished or the IRS has a tax lien on your property, or even if they’ve entered your bank account and withdrawn money, the installment plan could work for you and will immediately pause IRS collection actions.

Can You Do It Yourself?

Yes, you absolutely can…

But be very careful!

The IRS is quite picky about their forms being filled out perfectly.  Yes, you can do it on your own, but if you run into any questions along the way or want a second opinion, we recommend you contact our friends at Optima Tax Relief.  They’ve helped settle millions of dollars in tax debt.

If You Choose an Installment Plan

If you owe $26,000 to $50,000 to the IRS and you choose an installment plan, the installments will be a significant addition to your debt load. You will have to prioritize them over all other debts. Other creditors may push you harder and their demands may be louder, but none of them can do what the IRS can do.

In a worst-case scenario, remember that many other debts can be discharged in bankruptcy. Tax debts usually cannot be.

The installments will be a burden, but you will need to pay them.

Option 2: Settling Your Debt for Less if You Owe the IRS $26k-$50k

The first thing most people who have over $26,000 in tax debt want to do is see if they can get part of the debt forgiven.

The IRS does reduce some debts. It’s not easy, but it’s possible. An Offer in Compromise is an offer to settle with the IRS for less than the amount you owe them.

The good news: in 2020 alone, the IRS accepted 14,288 “Offers in Compromise” amounting to $261.3 million of forgiven debt.

The bad news: in 2019 the IRS rejected 67% of the applications it received for Offers in Compromise.

An Offer in Compromise is not impossible. People do apply successfully and they do see substantial reductions in their tax bills. It’s far from a sure thing, though, and it’s not something to count on.

How Much Could You “Settle” For?

You’ve probably heard the radio commercials where Freddy owed the IRS $30,000 in back taxes, hadn’t filed his taxes in 5 years, and had the IRS levy his bank account for 25% of his monthly income.  Then Hero Tax Relief company comes along and gets him up to date on filings, gets the IRS out of his bank account, and settles his $35,000 tax debt for $100.

Is this common?

Yes and no.  This sort of result really does happen every day.  (See real examples below from people who owed $26k to $50k)

But in most cases, you won’t settle for $100.

Following the math above, with $261.3 million forgiven divided by 24,000 cases, the average Offer in Compromise accepted is $10,886.

I understand that number doesn’t mean much, since delinquent taxpayers submit offers for anywhere from hundreds to hundreds of thousands of dollars, but I’d still say this is a good number for you since it’s significantly less than any number between $26k to $50K.

Say, for example, you settled a $50,000 tax debt for $35,000 and set up a payment plan based on the smaller figure.  You wouldn’t be getting a free pass, but you’d be paying a lot less.

Examples of success:

I browsed through dozens of testimonials from tax relief companies to find these.  Of course, there were dozens and dozens I found for a higher starting balance.  Here were a handful I found for $26k to $50k owed. These should be taken with a grain of salt, as customer reviews aren’t always legitimate!

Please be aware there’s no magic to the starting amounts owed above.  Just because you owe $28,000 like Crystal, that doesn’t mean you’ll settle with the IRS for $500.  Nor does a couple of thousand dollars make a huge difference. The IRS won’t see a $37,000 debt too differently than if you $39,000.  Each individual case is different.

Offer In Compromise (OIC) Requirements

The Offer in Compromise sounds like a dream come true.

The trick is qualifying.  Beware!  It may not be easy.

For the 24,000 offers the IRS accepted in 2018, the IRS received 59,000 offers.  In other words, they accepted about 41% of the offers.

The IRS will not accept an Offer in Compromise if they believe you can pay the debt in a lump sum or through a payment plan.

In each case, they’ll consider your:

• income
• assets
• debt
• and more!

In order to qualify, you must offer the IRS an amount equal to or greater than what the IRS calls “the reasonable collection potential.” (RCP)

That’s a complicated way of saying that you need to offer at least as much as they think they can squeeze out of you, based on your income and on assets such as your home, cars, investments, and savings.

The good news?

If you have few to no assets and/or very heavy debt, there’s a better chance your offer will be accepted. You’ll also have a better chance of acceptance if your income has been dramatically reduced or your costs increased – say by illness, job loss, or similar factors – since you incurred your tax bill.

Other Options

There are several other possibilities for reducing tax debts.

• Disaster victims. If you have suffered economic loss due to a natural disaster you may qualify for tax relief in disaster situations.
• Innocent Spouse Relief. If you filed a joint tax return and you have tax liabilities due to the actions of a spouse or ex-spouse, you may qualify for Innocent Spouse Relief.
• Temporary Collection Delay. If the IRS concludes that you have no way to pay your taxes you may qualify for a temporary collection delay. You will still owe the amount and it will incur interest. If your financial situation improves you will have to pay.

They apply to limited numbers of people but you should still be aware of them, because one of them could apply to you!

Should You Hire a Tax Relief Company

You can apply for tax relief on your own. The IRS has set procedures and available forms to apply for installment plans, offers in compromise, and other programs that it offers. If you have a relatively simple problem a DIY approach may be what you need.

If your situation is less simple, or if you look at the forms and have no idea where to begin, a tax relief company could be a better option. Just be sure to do your research carefully and select a credible partner. Don’t fall for the first ad you see: there are a lot of players out there who are not credible.

Offer in Compromise Mistakes

Tax relief expert (and former IRS revenue officer) Jeffrey McNeal says when he processed offers, he saw tons of mistakes made on the forms, even when prepared by CPAs and enrolled agents!

If you mess up the forms, you could face rejection or delays. You may wish to consider professional help.

Say, for instance, you owe the IRS $32,000 or $43,000 and submit an Offer in Compromise…  

Other than needing to make sure all the math is right and all fields are filled out properly on Form 433, that’s just the starting point.  

Only 41% of submissions get approved so it must be done perfectly to give you the best chances.  If it goes to appeal, you will not only need to fill out a form, but McNeal states that just about the only ones to win their appeals were people who backed up their claims with:

• The Internal Revenue Code (IRC)
• The Internal Revenue Manual (IRM)
• Existing case law

Ask yourself: Do you feel qualified to reference the above codes and manuals in your appeal for tax relief?

The Internal Revenue Code is a massive amount of IRS documentation made up of over 9,000 sections, while the Internal Revenue Manual is made up of 39 parts (also massive), and we know there are tens of thousands of cases in case law.

Knowing what applies and what doesn’t to an Offer in Compromise would be nearly impossible for a non-professional.

Why Consider Hiring a Tax Relief Company

A tax relief company probably cannot make your tax debt disappear. That is not a reasonable expectation, and a legitimate company will tell you that up front. There are still reasons to consider using a credible tax relief company.  They also: 

• provide guidance on audits
• help set up payment agreements with the IRS
• help get current on any unfilled tax returns 
• some may be able to stop potential penalties such as wage garnishments

Most importantly, they pause the stress of dealing with the IRS – Typically any case submitted to the IRS takes months (or years) to review.  While waiting for their response, the IRS typically suspends any collection activities, and will often lift wage garnishments or even return money levied from your bank account, as is often the case with an Offer in Compromise submission.

Alternative Ways to Pay the IRS

Tax debt is a serious problem. The IRS has powers that no other creditor has and can come after you in ways that no other creditor can. Your first, best option is simply to pay them, in any way possible.

Consider these options.

• Borrow from a retirement account, like a 401k or IRA.
• Borrow from your home equity using a home equity loan or HELOC.
• Use a personal loan

Borrowing money isn’t a perfect solution. You will have to make the payments on time or your credit will suffer. If you use your home equity you could lose your home if you default. It’s still better than owing money to the IRS.

Is Bankruptcy a Solution?

Bankruptcy is not a direct solution to a tax debt. Most tax debts cannot be discharged in bankruptcy, so you will have the same tax debt after bankruptcy that you did before.

Bankruptcy could still help. If you are unable to pay your tax bill because you are buried in other debts, bankruptcy could eliminate many of those other debts. You will still owe the tax debt, but you’ll have fewer other demands on your plate.

Bankruptcy is an extreme solution that will only be appropriate if your case is really desperate. Most bankruptcy lawyers offer free consultations, so if you’re considering this option you can try consulting a lawyer to review your options.

Non-profit credit counseling agencies also provide free consultations that can help you clarify your options. They will not be able to resolve your tax debt, but they could help you manage your other debts or decide whether to consider bankruptcy.

The Bottom Line

If you owe $26,000 to $50,000 in taxes, you need to make some decisions and act immediately. We hope this article has helped you clarify your options and decide whether to take a DIY approach or consider retaining a reputable tax relief company

Get Professional Help!

Compare multiple tax relief companies at one time, pick the best option, and get help managing your tax debt.

Best Tax Relief Companies

The post Best Tax Relief Options If I Owe $26,000 to $50,000 to the IRS appeared first on FinMasters.

Please feel free to use the quick skip links below, or browse the data at your own pace.

Key Findings

The Cost of Credit Repair

How much does credit repair really cost? We’ve got the answer!

To ensure we only surveyed credit repair clients, we added knockout questions to our survey that eliminated consumers who had used free or paid services such as:

• Free or paid credit score services – (Credit Karma, Credit Sesame, MyFico)
• Bank, Credit Union, or credit card scores
• Credit Bureau scoring or credit report services 

The True Cost of Credit Repair

We did not visit any credit repair companies’ websites to bring you the true cost of credit repair.  These are the results from our actual surveyed consumers who paid for credit repair.

Here are the numbers:

• 17% of respondents said their lifetime total was less than $250
• 31% of respondents said the lifetime total of all monthly fees, start-up costs, and additional fees was between $250 to $500
• 19% paid between $501 to $750
• 16% of respondents said the lifetime total  was between $751 to $1,000
• 16% spent over $1,000 for all services received

Of course, the amount spent correlated with how long the respondents stuck with their repair company.  See this chart:

Here are the top answers to how long our respondents used their credit repair company:

• 3 to 5 months – 31%
• 6 to 9 months – 23%
• 1 to 2 months – 22%
• 10 months or more – 18%

As shown in the chart above, we found a strong correlation between the duration a consumer worked with the credit repair company and the amount of money they spent.  Here are some statistics on that:

• 38% of respondents who worked with a credit repair company for at least 6 months spent over $750 compared to 28% who spent over $750 and worked with the company for just 5 months or less
• 32% of all respondents spent over $750 on credit repair services.  Of these big spenders, 48% reported a credit score gain of 100 points or more

Credit Score Gains from Credit Repair 

We also wanted to find out if credit repair companies really work.  To find this out, we asked our survey subjects:

• What their credit score was prior to working with their company?
• What was the overall impact on their score?
• What is their current credit score?

Overall, we found strong evidence to support the claim that credit repair companies have a positive impact on their clients’ credit scores, particularly when spending more time with a client.

• The most common credit score gain reported was 100 to 149 points (26.3% of respondents)
• The highest percentage of respondents (44.6%) started receiving credit repair service with a 300 to 579 score, while 33.4% started with a 580 to 669 score
• 15.4% of all respondents received more than 150 point credit score increase
• Respondents who started off with a 300 to 579 (the lowest range of scores) received the highest increase in scores, with 49.3% getting a 100+ point increase
• Respondents who received Bankruptcy recovery services raised their scores higher than the recipients of any other services, with 53.5% reporting a 100+ point gain

We also found a correlation between the length of time a consumer stayed with their repair company and higher increases in credit scores.

• 48% of respondents who used credit repair services for 6 months or more got an increase of 100 points or more to their credit score.
• This dropped to 33% if the respondents only used credit repair services for 1 to 2 months .

Marketing Analysis: How Consumers Find Credit Repair Companies

We also asked how the respondents first found their credit repair company.  Here were the answers from highest to lowest percentage:

• Online search – 45.4%
• Referral – 37.2%
• Advertisement – 13.4%
• Phone Solicitation – 2.8%
• Other – 1.0%

We dove deeper into the top two sources of clients for credit repair companies (online search and referral), and discovered the following:

• Online search clients spent more, on average, than Referral clients.  55.5% spent over $500 while only 48.9% of clients who came by referral spent over $500.
• Clients who came from *Advertisements or Phone Solicitation spent the least on credit repair – 46.4% spent over $500.
• Online searchers and Referral clients experienced similar credit score gains.  Online search clients experienced a credit score increase of 100 to 150 points (27.8%) compared to 26.3% of Referral clients.
• Referral clients experienced fewer billing problems.  61.3% reported no billing issues, while 51.1% of Online Search clients reported no billing issues.
• Clients who came via Advertisement and Phone Solicitation were by far the least happy.  54.9% reported their overall experience was “Good” or “Excellent” compared to a combined 69.8% of Referral and Online search clients who reported a good or excellent experience.

*We’ve combined respondents who found their company via Advertisement or Phone Solicitation in our results above for greater statistical significance.  We only had 14 respondents (2.8%) who became a client through phone solicitation.

Services Received – The Stats

Perhaps you’re wondering what credit repair companies actually do for their clients.  

Credit repair companies are mostly known for helping their clients remove inaccurate or damaging items from their client’s credit reports.  

However, many of them claim to offer a host of other services from credit counseling to identity theft recovery.

We asked our respondents what their credit repair company actually did for them, and here were their answers.

Top services received:

• Removed negative items (late payments, collections, charge offs) – 56.2%.
• Credit consulting – 49%.
• Set up payment plan with creditors – 48%.
• Debt consolidation – 46.6%.
• Sent dispute letters to the credit bureaus – 39.8%.
• Sent “Goodwill letters” to creditors – 28.6%.
• Sent cease and desist letters to creditors – 24.8%.
• Identity theft recovery – 21%.

Of these services, the respondents who had “goodwill letters“ sent to their creditors on their behalf reported the best overall experience (76% reported an overall “good” or “excellent” experience).  This group also contained the highest percentage (54.5%) of people whose credit scores improved by 100 points or more.

We also asked which items the credit repair companies were able to successfully remove from their credit report.

Here were the top 8 answers starting with the most prevalent:

• Collections – 55.2%
• Late payment – 53.6% 
• Medical bills – 43.8%
• Charge offs – 30.6%
• Inquiries – 25.8%
• Judgments – 20.8%
• Student loans – 17.8%
• Bankruptcy – 11.2%

Respondents who received Bankruptcy recovery services raised their scores higher than the recipients of any other services, with 53.5% reporting a 100+ point gain.

Customer Experiences with Credit Repair Companies

Sometimes the financial industry takes shots at and casts a negative light on credit repair companies. We wanted to know how actual credit repair clients felt about the service they received.

We asked their opinion on:

• their overall experience;
• the company’s business practices (marketing, customer service, billing, etc);
• if they were charged for anything they felt was inaccurate.

Here’s what we found:

• 67% said their overall experience was “Good” or “Excellent”;
• 26.4% reported an “Okay/Neutral” experience;
• 6.6% reported a “Bad” experience;
• 87% of respondents thought their repair company’s business practices were “Professional” or “Fair”.

We also found that clients’ overall opinion of the credit repair company was much more favorable if they received a nice credit score increase.  See the chart below.

We were not happy to see that among credit repair clients, a sizable portion feel their company was shady, borderline illegal, and experienced billing problems.

• 12% of respondents thought the repair company’s business practices were “Shady” or “Borderline illegal”.
• 25.8% thought the credit repair company kept them as a client. longer than it should have taken – They felt “strung along”.
• 18.6% said the credit repair company made it difficult to cancel.
• 55.2% of all respondents said the billing was as agreed.

Conclusions

We were not happy to see some of the damning results from this study.  Many of our respondents reported billing inaccuracies, a problem that must be corrected. Imagine if only 55% of Netflix subscribers reported correct billing.  That would not be very good.  Yet, that’s the unfortunate statistic we have for credit repair companies. 

Having said that, the study provides overwhelming evidence that professional credit repair companies do make a positive impact on the credit scores of their clients.  There is also a significant correlation between the amount of time a client sticks with their repair company and bigger credit score gains.  

If consumers do seek credit repair services, we recommend that they proceed with caution, research the best companies online, and ask around for referrals.  If they move forward, they should plan to stick with the company for several months for the best results.

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