Credit Repair Advice

Whenever you apply for any type of
credit or financing, a credit report is pulled from at least
one of the three major credit bureaus. While there are
hundreds of smaller credit bureaus around the country,
virtually every credit bureau is affiliated with either
Experian, Trans Union, or Equifax.

These credit bureaus collect and
maintain information on the vast majority of Americans, but
they are not affiliated with the government in any way. The
credit bureaus are for-profit corporations and they sell
your personal information for money.

The credit bureaus receive your
personal information through the same lenders who grant you
credit. They have agreements with each of these credit
grantors that require the credit grantor to inform the
credit bureaus of everything that occurs in your
relationship with the credit grantor. If you make a payment
late, the negative credit listing is quickly reported to at
least one of the three major credit bureaus and is added to
your credit history. Credit reports are not just a record of
how you are currently managing your credit accounts. Credit
reports are histories of everything you are doing with your
credit now, and everything you have done in the past.

The credit bureaus collect this
information, list it on your credit report, then sell it to
other credit grantors who wish to see your credit history
before they decide to lend you money. The credit grantors
who review your credit are especially interested in any
negative credit. If you have shown any tendency to pay late,
or to disregard your financial commitments in the past, then
the creditors’ computers will typically reject your
application.

Just like when you were in grade
school, your credit report is your financial report card to
the world. Back to top

What
kind of information appears on the credit report?

Merchant Trade Lines

These include all regular credit lines such as department
store cards, auto loans, mortgages, and credit cards. If
there is any history of late payment, or if the trade line
was included in bankruptcy, charged off, or put into
repossession, the listing will be considered negative by all
credit grantors.

Collection Accounts
When an account is referred to collections because of
delinquency or because of a bad check, this appears on the
credit report as a collection account. Collection accounts
can appear as paid or unpaid accounts. Any type of
collection account, whether paid or not, is considered very
negative by all credit grantors.

Court Records
Court records include bankruptcies, judgments, liens,
divorce, satisfied judgments, and satisfied liens. All court
records, including satisfactions, are considered negative by
all credit grantors.

Inquiries

Every time a potential credit grantor looks at your credit
file, a credit inquiry appears on at least one of your
credit bureau reports. If the number of inquiries is very
few over the last two years, then there may be no negative
effect on your credit worthiness. However, if there are many
recent inquiries showing on your credit report, credit
grantors may become nervous and deny you credit. Back to top

Who
looks at my credit report?

With the passing of each year, your
credit report is used more and more often as a yard stick to
measure your character. Prospective creditors will always
review at least one of your credit reports before granting
you credit. Today it is increasingly common for insurance
companies to review your credit before extending auto or
health insurance. Many employers now check credit before
they consider you for a position. If you rent, you may have
already been through a credit check to determine your
worthiness as a renter. Back to top

How
long will negative information stay on my credit report?

The Fair Credit Reporting Act (FCRA)
requires that most negative credit items be deleted from
your credit bureau file in no more than seven years, except
for bankruptcy which can be reported for up to ten years.
These are the time limits for reporting negative credit. The
creditor or the credit bureau can choose to have the
negative credit information deleted whenever they please.
Inquiries may remain on the credit report for up to two
years.

Under the new Fair Credit Reporting
Act, no collection or charge off may remain on the credit
report for more than seven and one half years from the first
late payment that initiated the collection or charge off
status. Back to top

How
can I see my credit report?

Most credit grantors are not allowed
by the credit bureaus to show you your own credit report.
But you can purchase your credit report from the credit
bureau for a fee or you may buy it on line through a variety
of services.

If you order your credit report from
the credit bureaus themselves, you may find that you cannot
read it because the information is listed in an unfamiliar
code. Trans Union and Equifax credit reports are very
difficult to interpret and understand. Experian credit
reports, however, are relatively easy for most people to
read. The Qspace report is one of the most easy to read. Back to top

How
much bad credit does it take for me to be denied credit?

As you may have already experienced,
even one small late pay listing may result in credit
denials. It is a myth that a large amount of positive credit
can outweigh some negative credit. Any negative credit
whatsoever can become a substantial credit obstacle.

Different kinds of creditors respond
differently to bad credit. It is safe to say that your
bankruptcy will continue to make it more difficult to get
credit for seven years after your last late payment assuming
you don’t repair your credit.

Within two years after the last
negative listing, a consumer can usually acquire
“sub-A” financing for a home (assuming all
accounts are paid.) Within three years, the consumer should
be able to get normal, “A,” mortgage rates even
without credit repair (that assumes that the person has been
current on bills all the while.)

Auto financing is a little less
forgiving. You may find yourself paying higher or slightly
higher interest rates on cars until seven years after the
negative listings (without credit repair), when the listings
are deleted from the credit report. You can get auto
financing with bad credit in most areas, but the rates are
going to be astronomical. Yet, time heals all wounds, and
you should be doing better within three years of the
negative listing.

Credit cards and banks are the least
forgiving of all. Many standard rate credit cards will not
even consider an application from a person with a any
negative credit on their credit report. In these days,
though, there are credit cards that cater to every credit
situation; even someone who discharged their bankruptcy the
day before applying. Most of these cards charge very high
interest or unusual up front fees or security deposits. It
is common for one of these cards to charge you an
“application” fee equal to the limit on the card.
After the bankrupcty ages, prospects become better, but they
will remain sub-standard until the negative listins fall off
the credit report. With that said, it shouldn¹t be
forgotten that bad credit can usually be repaired (after a
significant amount of effort and follow-through.) Even
bankruptcy can be repaired after enough effort and time are
dedicated to the task. Click Here to Learn About Credit Repair.
Back to top

In much the same way that a resume displays your work experience to a prospective employer, a credit report provides prospective creditors (and in some cases employers and insurers too) with a detailed picture of your credit history. And like a resume, your credit report can influence whether you will receive what you are applying for.

Ideally, your credit report is an accurate, up-to-date reflection of your credit history. However, since we don’t live in an ideal world, there are many reasons that your credit report could contain inaccuracies that might prevent you from receiving the credit you deserve. The good news is you can take action to keep your report accurate. Here are the top five reasons why you should make a practice of regularly reviewing your credit report:

Inaccuracies & Mixed Credit Files

Many inaccuracies on a credit report can be the result of simple human error, and are therefore are not difficult to dispute. Of course, if you don’t order your credit report, you might never know about it. Whether the inaccuracies relate to payments not credited, late payments, or data mixed in from the credit file of someone else with a name similar to yours, you will want to contact the credit bureau to dispute inaccurate information promptly.

Tracking Payments

One of the most important elements of credit is a demonstrated history of on time payments. Once you send the check though, anything can happen–a delay in the payment being received can kick you over to a 30-day delinquency. If you call your creditor and explain the situation, they might adjust the information. Of course, if you don’t read your credit report, you won’t necessarily know which payments are being received and reported properly.

Identity Theft

This issue alone is reason to order your credit report immediately. Identity theft is an insidious crime, involving a thief who assumes your name to open new accounts, divert your card statements to another address, and run up all sorts of bad debt without you ever knowing about it until collectors come calling. Over time, identity theft could jeopardize your ability to obtain further credit. The best way to catch a thief who is using your name is by getting a copy of your credit report, which will show you if there are accounts listed you know you haven’t opened. For example, if a thief has intercepted a pre-approved credit card offer in your name and sent it in with a change of address, your credit report will include the account.

Inquiries

If you’re shopping around for a loan or more credit, you should know that when creditors check your credit, it places an inquiry on your credit report. Inquiries can add up, which is often interpreted as a negative by creditors. For this reason, too many inquiries can
actually make getting credit more difficult. Moreover, if you didn’t authorize
someone to look at your credit report and they did, they may have broken the
law.

Credit Fraud–Unauthorized Charges

Credit fraud involves the theft of your credit card or
account number to make unauthorized charges to your account. Though consumers
are protected financially from this abuse, other creditors may take note of
all this activity and decide to raise your interest rates or refuse to grant
you a loan. Ordering your credit report will help you catch new activity on
accounts that you haven’t been using, or may have closed.

When it comes to managing your credit worthiness, your
credit report is your best resource. Ordering your credit report gives you the
opportunity to manage your credit wisely today, while planning your credit
strategy for achieving future goals–a credit-savvy move every consumer should
make!

Click Here to Learn More About Credit Repair

New Goal for Your New Life Together: Becoming Credit-Wise

Many people planning to be married take time to reexamine
financial priorities, set a new budget, and establish savings or
debt reduction goals. Being credit-wise consumers means
realizing that managing your credit requires similar planning
and care-and doubly so when you are entering into marriage.

Think about your special personal and financial goals for the
coming year. Are you planning a major purchase or a trip abroad?
Are you working to establish financial stability and security?
Since good credit takes time to build, planning for your future
together should include checking your credit report. This is a
great time for each of you to request a copy of your credit
reports and look them over–not simply for inaccuracies, but for
ways you might improve your overall credit status.

Many of life’s major changes, such as marriage, can impact your
credit, but keeping these credit-savvy tips in mind can help you
keep and build your credit together, so it’s always available
when you need it.

Your Marriage and Future
Getting married brings many financial opportunities to couples
who can combine their resources. As you plan your wedding day,
plan for your future too and take these steps to keep your
credit in tip-top shape.

Notify creditors and credit bureaus if you change your name.
When you change your name at marriage–or any other time–it’s
important that you make sure your creditors and the credit
bureaus are notified of the change. Otherwise, you might lose
your credit history.

Keep credit in your own name in addition to joint accounts.
Women especially must take care to keep some credit in their own
name. (e.g. “Jane Smith” rather than “Mrs. James
Smith”). Every year women who have never paid a bill late
are denied credit because they have no credit history in their
own name.

If either you or your spouse-to-be has had trouble getting
credit alone, try setting up a joint account to capitalize on
your shared income and/or one person’s stronger history. As your
joint account history grows, you should each acquire and
maintain an account of your own as well, to establish your
credit on an individual basis. As you establish individual
accounts, you might close some extra joint accounts, keeping
only those you actually use.

If you anticipate making a large purchase with one of your
credit cards, you might want to request a credit line increase
now, so you know the credit is available when you’re ready to
buy.

Building Good Credit Together

When you apply for credit, the lender will undoubtedly check
your credit report. The information in your credit history helps
lenders decide how much credit and what interest rate you are
eligible for. The better your credit history, the more likely
you are to qualify for the best credit deals, including rates on
a mortgage. But what will creditors be looking for?

Pay Your Bills on Time

Creditors always look for indications that the prospective
borrower is a good credit risk: a person who will pay back his
or her debts in a timely fashion. Obviously, a history of
on-time payments demonstrates that you are just such a person.
But that doesn’t mean your credit history must be perfect for
you to qualify–few people’s are, after all. “Good”

credit can include a few minor dings in your report, such as up
to two credit card payments 30 days late or one installment
payment, such as an auto or student loan payment, 30 days late.
No payments of any kind should be more than 60 days late and
there should be no outstanding public record debts such as
judgments or liens.

Keep Your Debt Load Reasonable

One factor any creditor must assess before offering credit is
the total debt of the person applying. If a large portion of
your income each month is already committed to paying off other
debt, the lender will wonder if you may have trouble paying back
an additional loan. As a rule of thumb, financial experts say
that non-mortgage debt payments should not exceed 10-15% of your
take home pay each month. If your debts are currently too high,
consider ways to pay some down before you apply for new credit.

Avoid Unnecessary Inquiries

Whenever you authorize a creditor, employer, or other
business to check your credit report, an “inquiry” is
added to the report itself–a note that someone has checked your
credit. An inquiry usually stays on your credit report for two
years. A lender considering you for a loan will look at the
number of inquiries recorded there and when they took place. A
large number of inquiries occurring in a short period of time
may be interpreted as a sign that you are either applying for
lots of credit because of financial difficulty or overextending
yourself by taking on more debt than you can actually repay.
(Checking your own credit report, however, does not impact your
credit rating.) Therefore, it’s always a good idea to minimize
inquiries into your credit report. If you’re shopping around for
mortgages, for example, don’t let every lender you consider run
a credit check. You might have to settle for slightly more
approximate estimates on what the lenders can offer you, since
they can’t verify your credit history. But that’s still better
than doing all that shopping around only to find that the lender
of your choice now perceives you as a less solid credit risk and
wants to charge a higher rate.

Eliminate Excess Unused Credit

Just as a high number of inquiries suggests you may be
overextending yourself, a lot of available credit means you have
the capability to overextend yourself in the future, even if you
have not done so in the past. Although people may perceive
having several credit cards with high limits a sign that they
have good credit, too much of this good thing can make them seem
like a poorer credit risk. The lender needs to be reasonably
sure that you will continue to be able to repay your debt in the
future. But if you have thousands of dollars of unused credit
available, you might spend it all the month after your loan goes
through and suddenly have more debt than you can pay off. To
prevent this concern from arising, you should close unused
credit accounts before applying for a large loan, and/or
consider having your credit limits reduced. If you do either of
these things, make sure to ask the creditors to record that the
account was closed or changed at the consumer’s request–you
don’t want anyone to get the impression the bank closed the
account because of problems with your payment habits.

Of course, as with most worthwhile plans, building good credit
together requires a long-term commitment. So set your
credit-wise plans for your new life together in motion now and
stick with them. By doing so, you may reap the benefits of that
commitment for a long time to come. Click Here.

Can Bad Credit be Deleted?

Yes, it can. Despite the fervent proclamations of bureaucrats and credit bureaus everywhere, a simple fact remains: negative credit listings are deleted from peoples’ credit reports by the thousands each and every day.

A few years ago, an attorney from Lexington Law. visited with a regulatory agency for a casual conversation with two agents. The Agency’s office, as a matter of course, believed the credit bureaus’ claim that bad credit couldn’t be deleted. The visiting Lexington attorney asked, “How many negative listings would you have to see deleted from consumer credit reports before you would believe that bad credit can be deleted: ten? fifty? a hundred? one thousand?” The agents responded with only blank stares.

“How about 50,000 deleted listings, would that convince you?” continued the Lexington attorney. From his briefcase he pulled a stack of papers six inches high.

“In these pages, we have listed the permanent deletion of over 50,000. listings from our clients’ files in the last two years alone,” he explained. The agents pulled the stack across the conference table and began to pick through the pages, taking in the massive list.

“But have you deleted any bankruptcies?” shot back one of the agents, “we know that bankruptcies can’t be deleted.” The Lexington attorney leaned across the table and ran his finger down the first page.

“There’s one deleted bankruptcy… and, there’s another,… and another,… and another. Should I go on?” asked the Lexington attorney.

The agents sat back in their chairs. “You know,” began the junior agent, “I have this one listing on my credit report that simply must belong to somebody else…”

How is credit repair possible?

The Fair Credit Reporting Act (FCRA) allows a consumer to challenge the information on his credit report on the basis of “completeness and accuracy.” When a consumer files a dispute, the credit bureaus must contact the source of the credit information (the creditor) and confirm that the information is accurate, verifiable, and not obsolete. In some circumstances, the credit bureau is required to go beyond a simple verification of the creditor’s own computer record. If, within 30 days, the credit bureau has not received verification from the creditor, then the credit bureau must promptly delete the credit listing. Learn More.