Over the last few years, I have learned more about the credit score and the role it can play in the lives of Americans than I ever imagined.
A poor credit score can have a devastating impact, curtailing the ability to live life to the fullest.
And it is not just a few people that experience this frustration.
In fact, more than half (53%) of all Americans have been rejected for a credit card, loan, or car due to poor credit, according to a survey conducted by YouGov plc.
The recently released study revealed “two leading causes” of this phenomenon:
“Credit Ignorance: Nearly one quarter (23%) of Millennials don’t know their credit score, along with 54% of Generation Z members, 18% of Generation Xers, and 20% of Baby Boomers.
“Too Many Credit Cards, or None At All: More than one-third (38%) of Americans have three or more credit cards, and 13% of Baby Boomers have six or more. On the other hand, approximately three in ten (28)% of Americans between ages 18 and 54 don’t have any credit cards. From a credit perspective, maintaining more than three credit cards can potentially lower your standing—but holding no credit cards whatsoever can also reflect poorly.”
There’s also a third factor – a poor credit utilization ratio.
“One-quarter of both Millennials and Generation-Xers who have a credit card carry $4,000 or more in credit card debt every month. One of the factors that determine your credit score is credit utilization, which represents your credit card balances in comparison to your credit card limits. A lower utilization (lower balance vs. credit limit) is better, as it demonstrates that you can responsibly use credit.”
Burns Funding can help consumers address this third factor.
In sum, we have institutionalized the bridge funding process, thus unlocking more capital at typically better rates for consumers struggling with credit card debt. The proceeds from such loans pay down the credit cards and bring the ratio back into balance, leading to an improved credit score.
Two factors have enabled us to do this. First, we have partnered with some of the premier credit repair companies, which gives the lending institutions tremendous confidence that the loan will be repaid. Second, the credit repair industry is inordinately fragmented with the best, most savvy companies overwhelmed with business. The fact that these companies don’t have to build out the relationships with the lending institutions is attractive to them.
Armed with an improved credit score, Burns Funding can help consumers secure umbrella-type, low-interest loans, thus removing the high-interest loans from the portfolio.
The bottom line is the trend highlighted in the study can be reversed by simply embracing a prudent financial strategy, one that Burns Funding has perfected.