Category: Credit

Press Release
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updated: Oct 23, 2019

SAN DIEGO, Calif., October 23, 2019 (Newswire.com)
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According to new research from Credit Knocks, ​48.1% of consumers who paid for professional credit repair services for 6 months or more saw an increase of 100 points or more to their credit score. Only 12% of respondents said they had a credit score increase of 24 points or less.

Overview of Credit Repair Services – Credit repair is a $3 billion per year industry in the U.S. according to IBIS World. Companies that provide credit repair services help consumers with bad and/or damaged credit. Common services offered are the removal of negative items from the customers’ credit reports (late payments, charge offs, collections), setting up payment plans with creditors, and debt consolidation plans.   

Impact of the Study – Many personal finance experts question if credit repair companies are truly effective and question if credit repair is ethical.  The Credit Knocks study surveyed 500 U.S. adults ages 25+ in October 2019 and found that a surprisingly high percentage of respondents indicated a positive credit score gain, especially when the respondents stuck with their credit repair company for 6 months or more, and mostly reported a favorable user experience. Some of the key statistics found were:

• The most common credit score gains reported were 100 to 149 points (26% of respondents) and 75 to 99 points (17.2% of respondents) compared to only 8.4% who reported a gain of 0 to 24 points
• 48% of respondents who used credit repair services for 6 months or more saw an increase of 100 points or more to their credit score
• 31% of respondents said the lifetime total of all monthly fees, start-up costs, and additional fees was between $250 to $500 (most prevalent answer)

Consumers’ Surprising Criticism of Credit Repair Companies – Even though consumers’ results (as measured by credit score increase) were very impressive overall, a significant percentage of consumers criticized their companies’ business practices and billing.  Key statistics:

• 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

For questions about the survey or to comment on the findings, contact Chris Huntley at chris@creditknocks.com.

Credit Knocks is the #1 resource for individuals with a 400-720 credit score to improve their credit.  

Source: Credit Knocks

Press Release
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updated: Sep 25, 2019

SAN DIEGO, September 25, 2019 (Newswire.com)
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According to new research from Credit Knocks, 46.4% of credit card authorized users enjoy a 680+ credit score compared to 27.7% of non-authorized users with a 680+ credit score.

Overview of the Strategy – ​One little-known strategy in the credit improvement space is for individuals with bad credit to ask a friend or family member who has an established credit card account if they can be added to the account holder’s credit card as an “authorized user.” By doing so, many credit cards report the account’s payment history to the authorized user’s file at the credit bureaus. The strategy allows authorized users to “inherit” the benefits of the account into their own credit file, such as payment history, account age, and credit limit – all of which are factored into one’s credit score.  

Impact of the Study – Some personal finance experts question if the authorized user strategy really works. The Credit Knocks study surveyed 570 U.S. adults ages 20 to 29 in April 2019 and found a direct correlation between people who had been added as authorized users and good credit scores. In some cases, the authorized user effect also trumped the impact of ethnicity, income, and education on the respondents’ credit scores. Of the respondents who had been added:

• Only 13% of authorized users had a credit score under 600, compared to 24.6% who had not been added
• 46.4% had a 680 or higher credit score, compared to 27.7% who weren’t added
• 27.5% had a 639 or lower credit score, compared to 39.9% who weren’t added
• 48.2% of all respondents had never heard of the strategy
• 21.6% of respondents had asked a friend or family member to add them 

The Authorized User Effect on Minorities – It has been widely studied and reported that Black and Hispanic Americans’ credit scores are disproportionately lower, on average, than white and Asian Americans’ scores. However, the study shows that minorities who’d been added as an authorized user had higher credit scores than white Americans who had not been added, on average. For example:

• ​52.4% of Black and Hispanic authorized users had a credit score of 680 or higher
• 30.5% of White and Asian non-users had a credit score of 680 or higher

The study showed a similar pattern of the authorized user’s effect on overcoming the barriers to good credit scores imposed by low income and low education.

For questions about the survey or to comment on the findings, contact Chris Huntley at chris@creditknocks.com.

Credit Knocks is the #1 resource for individuals with a 400-720 credit score to improve their credit. 

Source: Credit Knocks