The Average Credit Score
More consumers are now acquiring credit and are now trying to check up on how they fare as far as the national average credit score is concerned.
The Concept of the Credit Score
It was way back in the 1950s that your credit score came into being. It did so, when mathematician Earl Isaac and engineer Bill Fair, together, devised a mathematical formula, whole sole purpose was to help creditors analyze data. They invented the credit scoring system a radical system that caught on in the late 1950s and 1960s and has never looked back since. The formula has not remained the same and has evolved over the years as more and more American started depending on credit. The FICO score is any number between 300 and 850 and illustrates the credit worthiness of an individual.
The Average Credit Score
Everyone wants a perfect credit score, that is 850, but not everybody gets that score, however, even if your score is 720 or thereabouts, you will still get as much of a low interest rate as you would, if your score is nearer to the perfect credit score. There is a good credit score, but there is never a bad credit score as different lenders have different ways of looking at a score. Borrowers will however start to fill the pinch when their score goes below 600. This is when your interest rates start getting higher and your payment terms start getting stringent.
So, now you must have understand that the lowest good score here is around 720 and no consumer can allow his or her credit score to go below 300. Well, so now you must be wondering what the average credit score is for most Americans. According to the Experian result of March 2008, the average credit score of Americans is 692. However, as can be imagined this figure is liable to change on a periodic basis.
Bad or Good
Whether the average credit score is good or bad, is dependant on the perception of the lender. For some, it might be a good score, while for others it’s not that good at all. With the fallout with regards to sub-prime mortgage, in 2008, it was seen that many borrowers could not keep up with their pre-determined monthly payments. This is when lenders informally raised the lower limit of a credit score on low-risk borrowers. Therefore the former good score of 680 then became an also ran score, and 720 took its place. So even those people falling under the national average credit score of 692 are now being considered as sub prime borrowers.
Repairing Your Credit
If you have a bad credit rating, then its time that you thought about repairing it. It’s a difficult task but not impossible.
Budget is of Primary Importance
The first thing that you must do in a bid to repair your credit is to first calculate your income and expenditure. You must track your spending for the 30 days remaining in the month and note down where you are spending. You can then arrive at an amount that you can set aside each month to pay off your debts. There are things a person can do without and there are things he cannot do without. For e.g. a person can do without wasting money on eating out at expensive restaurant. This amount can then be used to whittle down those debts.
Creditor Contact
There are many people who thinking keeping contact with your creditors is a bad thing. They do not answer their calls or the letters sent by their creditors. The end result is that they face insistent pressure to pay back their debts and are harassed by constant calls and visits by debt recovery agents. This is why getting in touch with your creditors is of paramount importance. You must not do this after getting tired of receiving those harassing calls but must do so as soon as possible. You must try and work out a payment plan with them which you can confirm to and which enables you to payback the amount without pinching your pockets. You will find that most creditors are willing to work out such a deal.
Active Credit Accounts
If you have a really bad credit report, and rating, then there are quite a number of people who will tell you that you are best served if you close all credit accounts. If you want to repair your credit then this is not a good idea. A sudden burst of activity with regards to the closing of your credit account does not reflect positively on your financially stability. Try and keep your oldest accounts open.
Secured Credit Card
If you can supply the money upfront as collateral then nobody can refuse you a secured credit card. The limit of the credit card will be as high as the amount of collateral that you have deposited with the bank. Avoid penalties of any kind in this regard and make your credit card payments on time. This will go a long way in repairing your credit for the long term.
Another way of repairing your credit is by joining a credit union. You can get a loan for them far easily then a regular bank, on account of your bad credit.
Importance of Credit Cards
The concept of plastic money is seeing increasing popularity these days. People prefer credit cards over money and their importance cannot be denied.
If you don’t have a credit card today, then you are not a part of the American way of life. According to estimated figures more than 85% of American households use credit cards. So why has such a situation arisen. Read On.
They are Convenient
One of the biggest advantages of having a credit card is the fact that they are convenience personified. No longer does a person have to dig around for cash in his or her pocket or find a checkbook. All you need to do is hand your credit card to the cashier and your payments are done. Almost all merchants, everywhere in the world, accept credit cards and you don’t have to worry about not having a particular country’s currency, if you are traveling.
Boosting Credit Score
If you use your credit card wisely then you will definitely be able to boost your credit score. If you have made all your credit card payments in time and have not incurred credit card debt, even after a prolonged use of the card, then your chances of getting future credit increase manifold. Lenders will offer you loans only after going through your credit history and if you have paid your bills on time, your credit score will go up. In today’s world your credit score is like your financial life line.
Determination of Monthly Budget
Your credit card can help your determine and control your monthly budget. You can keep a track of your monthly bills. However, you can only do this if the entire balance amount of your credit card is paid on a monthly basis. Your monthly credit card statement will itemize all your transaction and you will know the exact amount of money that you have spent in the month.
Rewards on Offer
As advantages go, this is one of the ancillary ones. Most credit card companies will offer your rewards in terms of cash back, airline discounts, and various other discounts on varied types of merchandise. At times, many of these rewards are quite good and can offer you a tremendous monetary advantage. You can save quite a bit of money on many items on account of the discount or freebies on offer.
As can be seen the importance of credit cards is illustrated by its numerous advantages. However, it must be said that credit cards must be used widely to optimize their role with regards to your credit and finances.
Identifying Credit Card Fraud
As more and more people start using credit cards, the opportunity for fraud manifests itself. You have to be on guard to fend off such fraudsters.
A credit card fraudster targets vulnerable people. However, you must realize that over a period of time, credit card scams have evolved and there are no longer instantly recognizable and hence it is gets very difficult to identify a credit card fraud immediately. But, there are some tell tale signs that have emerged as the typical indicators that you are victim of credit card fraud.
Approval Letter or Denial Letters
Quite a number of people who are victimized by fraudsters receive letters saying that they either have been approved by a creditor or denied approval by a creditor. The funny thing is that these people had not applied for a credit card from the supposed creditor in the first place. What this means is that either your identity has been stolen and fraudsters have used that identity to apply for a credit card from a creditor or it’s a fraudulent credit company who has approved your candidature for a credit card.
Credit Card Utility or Telephone Statements
If you are victim of fraud you are going to receive various telephone statements or credit card payment statements in your name and with your address on them. However, the fact of the matter is that you would never have applied for that credit card in the first place and would not have made the aforementioned payments.
Not Receiving Statements
Our first two pointers dealt with the fact that a person will receive statements and payments intimations for a card that he or she had not applied for. At the other end of the spectrum, if he or she is a victim of credit card fraud then there is a good chance that he or she might no longer be receiving the full credit card statements. This means that a large part of the statements will be missing from your mail. If this occurs; its time to get cracking and know that you have been made victim of credit card fraud!
At the end of the day it’s important that you are careful with regards to the usage of your credit card. You must keep track of all your transactions, so that your can identify something that should not be there. You must also make sure that you only make secure transactions over the internet and from sites that use stringent security measures. Otherwise, you might one day get a call from a collection agency that is collecting for a defaulted account, in your name. The point is that you had never opened the account in the first place.
Knowing Your Credit Score
Knowing your credit score means understanding it and knowing whether you have a good credit or not.
What is a Credit Score?
A credit score is essentially a number that is calculated using a host of parameters that are pertinent to an individual’s credit history. This provides a simple answer to the answer to the most important lender question which is ‘should I lend/ not lend?’ This number offers the lenders a glimpse into the risk factor associated with lending to a prospective borrower a specific amount of loan. A thorough examination of the credit report can also give the lenders an answer, but a credit score requires no analysis as it is less subjective in nature and is also quicker to assimilate.
The System
This is a point based system that awards pre-designated points based on all the information that is in the credit report of a prospective borrower or applicants. The resultant score is then compared with that of other consumers who have relative similarity in terms of profiles. Through this system, a lender easily discerns whether the lender is likely to repay the loan in the given time, or if he has the ability to repay the loan, etc. It is the credit score of a person that allows him or her to get instant credit, especially while shopping at departmental or electronic stores.
FICO Score
There are several scoring methods used by various scoring agencies, however the most popular amongst these is the FICO score, which most lenders swear by. The score gets its name as result of its origins with the Fair Isaac and Company that came up with this method of scoring, which is now commonly used by banks, business, and insurers. The FICO scoring method is fair and takes into consideration all the requisite parameters. The three major credit bureaus, namely, Experian, TransUnion, and Equifax, worked with Fair Isaac and Company to jointly come up with this scoring methodology.
Other Scores
As aforementioned, the three major credit bureaus and Fair Isaac, came together to develop the FICO score. But, all three have their own individualistic, credits scores as well. TransUnion has a credit score called the Empirica System, while Equifax has something called the Beacon System while Experian has the Experian/Fair Isaac credit score system. It must be understood that all three are based on the FICO system of scoring and numerical result is equivalent to the one obtained by FICO. There are a few lenders who have their very own scoring methods. The change in these methods is the addition or subtraction of various parameters. That’s about it.
How to Obtain Your Credit Report
Obtaining your credit report is no big deal. It is something that can be easily obtained after you furnish a few of your financial details.
The 2003 Fair and Accurate Credit Transactions Act, states that a free copy of the credit report is the right of every American. According, to the act every American has a right to obtain a free copy of this document which is one of the most important consumer documents. This can be obtained, every year from three designated credit bureaus, namely, Equifax, TransUnion, and Experian. These major credit bureaus are not going to send in the reports, if the consumer does not ask for them. This essentially means that there is no automatic sending of reports but consumer must send in their request for them.
Obtaining the Reports
There are various ways and means through which you can obtain your credit report and that too, without any cost.
- You can access a site named, www.annualcreditreport.com, which the only authorized source through, which people can obtain their annual credits reports online for free.
- You can get an ‘Annual Credit Report Request’ brochure from the FTC. There is a credit report request form on the back, which can be filled and then sent to the central office in Atlanta.
- There is a toll free number also made available for this purpose.
You have a choice of ordering all the three credit reports at one go, or you might want to order each of the three reports at different times during the year. The choice is dependant on the consumer, however, as a consumer you must make sure that you have ordered these reports from a centralized agency.
Other Ways to Obtain Credit Report
One of the other ways that you can obtain your credit report is by directly approaching the credit agencies. But, you must be aware that if you do so directly then you will be charged a fee, until and unless, you fit into another category or fulfill certain criteria, wherein you are not required to pay any fee.
You must also be wary of the various deceptive and fraudulent websites that claim to offer their users credit reports but charge a hefty amount for the same services that you can otherwise obtain for free. The best thing would be for you as a consumer would be to take the tried and tested route for obtaining your credit report; its free, its hassle free, and error free.
How to Establish Your Credit
Establishing credit is all about demonstrating that you can handle your money in a responsible manner and in a better manner.
Understanding the Lender
Before you establish the credit for the first time, you must first understand the mindset of the lenders and what they are actually looking for, from a borrower and his credit. The problem lies in the fact that lenders don’t have your FICO score to look into if you have not established credit. In such situations lenders will have to examine various other facts that will help them in making a decision as to whether you pose a credit risk or not.
Some of the factors that lenders will look into are your bank accounts, employment history, residence history, the amount and nature of utilities that you have in your name, etc.
Banks are the First Port of Call
If you want to establish credit, then the first thing you must do is open a checking account at your local banks. If you can, you must also open a savings account. What this does is that it offers proof of your money management capabilities. Of course, herein, it is of primary importance that your active bank accounts have good standing. If you establish a relationship with a bank then the chances that you can get a loan of credit card through that bank, definitely go up. This relationship will definitely go a long way in establishing your credit.
Department Store Card
If you have trouble establishing credit then a store credit card might be a good idea. Generally, these cards are a bad idea as they lure you with up-front discounts but their continual interest rates are quite high. So go for these cards only if your local bank has denied you a credit card. However, also make sure that the department store card that you are going for reports to credit bureaus. Otherwise, it does not make any sense to go for these cards.
Secured Credit
If you have been rejected at all ends, and there is not other option, then you might think about going for secured credit. If you have secured credit card or loan it means that there is an asset that is linked to your account. So what you can do is, you can get a secured credit card with a limit of say $1000 by depositing $1000 in the bank as collateral. This means that if you are unable to make your credit card payments for some reason, then the banks will take your deposit.
How to Catch Credit Report Errors
Credit bureaus do their job responsibly but the fact remains that they are not infallible and do make mistakes.
Checking your Credit Report
It’s very simple really. If you do not undertake an examination of your credit report, how are you going to catch credit report errors? The great part about credit reports is that they are available free of charge and you only have to make a request for them. Therefore, it makes sense that you order your credit reports annually, and what’s more; take time out to go through them with a fine tooth and comb. More often than not you will be able to catch a few errors in your credit reports.
Good Record Keeping
It’s best that you have records of all your financial transactions. Do not be remiss in this regard. While going through the report, what if you come across an entry, which you think is erroneous. How are you going to be sure if this is indeed an error or you are mistaken in this regard? You can only check, if you have kept the records. Do remember that records are also necessary if you want to correct your errors. You will need to provide the requisite document that support yours position.
Vigilance is the Key
It’s your credit report and involves something that is very important with regards to quality of life that you want to lead. Therefore, you must keep track of your credit and be vigilant in this regard. It’s advisable that you ask for your credit report form the three agencies, not at one go, but space out in a way such that you ask for a credit report every four months. This will make it easier for you to identify an error as you will have less of information to go through.
Identity Theft
When you review your credit report you must be aware of the chances of identity theft. Therefore, don’t just concentrate on the financial transactions and figures but also on those details that might not be significant as far as your credit rating is concerned. For e.g. wrong name, unfamiliar post-office box address etc. If you notice such instances, it means that an identity theft has occurred and a stranger has hijacked your identity for some purpose or another.
As can be seen, it all depends on you as a person and your approach when it comes to catch credit report errors. You must concentrate thoroughly when you are going through your credit report. Only then do you have any chance of catching errors.
Fair Credit Reporting Act
In a consumer world, which is completely dependant on credit, the Fair Credit Reporting Act or FCRA is a law that protects credit rights in USA.
What is the Fair Credit Reporting Act (FCRA)
The Fair Credit Report Act or FCRA for short is codified, American Federal law that has been enacted for the regulation of the collection, dissemination, and use of all information regarding consumer credit. Couple with the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA) forms the foundation of all consumer credit rights in the United States of America.
FCRA and Consumer Reporting Agencies
So, who actually collects and disseminates information for the purposes of credit evaluation and other purposes? It is the Consumer Reporting Agencies or CRAs that do so and they do so under the ambit of Fair Credit Reporting Act. The Credit Rating Agencies provide consumers with information that has been kept on the agency files and also helps verify the accuracy of information if a consumer disputes the information kept by them. An amendment was made in the FCRA in 2003 that enabled consumers to get a free copy of their credit report annually. The Fair Credit Reporting Act also designates a certain amount of time that negative information about consumer credit can be retained by the CRAs, after which they have to remove them from their files.
FCRA and Information Furnishers
The Fair Credit Reporting Act also defines an information furnisher. According to the FCRA, it is a company whose purpose is the provision of information to consumer reporting agencies. Typically, such information furnishers are those creditors who have worked out an agreement with regards to credit, with the consumers. These could be credit card companies, banking institutions, auto finance companies, amongst various others. There are also other types of information furnishers as recognized by the FCRA, like municipal courts, employers both past and present, collection agencies etc.
At the end of the day the Fair Credit Reporting Act is a tool through which due regulation of the credit information takes places. It has enabled the fair reporting of credit information and in case of willful violations of the FCRA, consumers can seek statutory damages. This essentially means that the consumer and his credit rights are duly protected under this law. More importantly, under the aegis of this law consumers are duly notified when there is an adverse action that has been taken, based on the credit agency reports. Also users who have used the consumer credit information must also provided due identification of the company that has provided those reports. Consumers can contest such information if it is found to be erroneous.
Basic Credit Tips
There are quite a lot of credit tips that will help you boost your credit. It must be remembered, however, that these are not quick fix solutions but are rather, long terms plans.
Close Examination of Your Credit Reports
The first tip is that you must improve you credit by first ordering your copy of all your credit reports and going through them with a fine tooth and comb. Surprisingly, it is seen that credit reports often have errors in them. Even if these errors are small, they have significance on your credit rating and thus you must set into motion the process for error correction. Some of the common errors that you might come across are:
- Reporting of wrong accounts
- Debt being considered as outstanding even though you have paid them off.
- Various peripheral charges, late payments, and various other negative entries that should not be in the report, as a sufficient amount of time have elapsed regarding the same.
Moreover, if any of your recent credit application has been rejected for some reason, go through the reason for rejection in detail. This will help you get a fair idea of the problems that you might have, but had never realized till the rejection letter came along. This will help you immeasurably in turning around your credit rating for the better.
Timely Bill Payments
A simple enough tip, but very important. If you want to make sure that your credit gets repaired, you must pay all your bills on time. There are times when you have incurred huge bills and cannot pay the whole amount; in such cases it is of paramount importance that you at least pay the minimum amounts due and more importantly pay these amounts much before the due date. The regular paying of bills will definitely have a positive effect on your credit score and over a period of time you will find that your credit score has improved considerably.
Use Credit Regularly
If a person has credit problems, then he of she thinks that they are better off buying everything in cash. However, this will adversely affect your credit ratings. You must keep using credit as lenders need to know that you are still interested in using credit and also the fact whether you have turned things around or not. The very fact that you are using credit, in spite of, having a bad credit rating is evidence of the fact that you now want to use credit responsibly and are confident that you are going to turn things around.
These are just a few tips that will help you boost your credit ratings. There are many more, but these will help you get started.
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Myths
We’ve posted this listing of the most common Credit Repair Myths and honest answer to help you wade through the decision of “can I do this myself?”
As you consider them, we hope you’ll find the information helpful and relevant.
Repairing your credit is very important with lifelong consequences, so best wishes as you embark on that effort.
Common Myths of Credit Repair |
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| When I pay off a past-due account, such as a charge off or a collection account, will it show “paid” and no longer be considered negative?It is quite difficult to repair your credit without somehow satisfying your outstanding debts. However, the act of paying off a debt will not improve yourcredit rating much, if at all. Negative credit is allowed to stay on the credit report for a maximum of seven and one half years, except for bankruptcy which may remain on the credit report for ten years. Under the old Fair Credit Reporting Act (FCRA), the seven year clock began ticking on “the date of last activity” or, in other words, when the last action took place on the account. Under the revised FCRA, the credit bureaus must start the seven year clock on the first payment that you missed that led to the collection or charge off status. Now, creditors and collection agencies aren’t allowed to extend the reporting period by passing the account back and forth between agencies.However, by paying an outstanding, delinquent debt you will change the account status to “paid collection,” “paid was late,” or “paid was charged off” - which will still stand out as a very negative listing. When you have outstanding debt, it is almost always prudent to seek professional help so that you may settle your debts without further damaging your credit. In some cases, it is even possible to negotiate the deletion of negative credit as part of the payoff. | ||||||||||||||||||||||||||||||||||||||||||||||
| If I succeed in deleting a negative item, will it come right back on my credit report?The credit bureaus have cleverly spread this myth through the news media and government agencies to discourage credit repair. In truth, the credit bureaus will sometimes temporarily delete a negative listing if they haven’t heard from the credit grantor after approximately thirty days. If the credit grantor reports late, say after six weeks, and then verifies the negative listing, the credit bureau will often reinsert the negative listing on the credit report and reverse the credit repair. This is often known as a “soft delete.” Usually, though, the creditor simply fails to respond and the negative listing is permanently deleted and repaired. If the item is verified by the credit grantor, either before thirty days or after, the account may still be repaired again at some future time.Under the new Fair Credit Reporting Act (FCRA), the credit bureaus must follow strict procedures to notify you if they decide to re-report an entry on report. These new procedures have reduced the frequency of the re-reporting of listings, and they have increased the risk of lawsuit for the credit bureaus when they do it. | ||||||||||||||||||||||||||||||||||||||||||||||
| Are there negative listings, such as bankruptcies and foreclosures, that are impossible to remove from the credit report?There is no type of negative listing that hasn’t been repaired and removed from a credit report thousands of times. Negative items, such as bankruptcy or unpaid debts, are certainly more difficult to repair and remove from the credit report, but this has more to do with the operational systems of the credit bureaus than with the severity of the bad credit item. For example, judgments and tax liens are severely negative listings, yet are, overall, easier to repair. |
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| I’ve heard that disputing the credit report is easy and any person can do it himself for the price of a few postage stamps. Is that true?Disputing the credit report is easy. Getting results (and actually repairing bad credit) is amazingly difficult, complex, and infuriating. It isn’t a coincidence that the Federal Trade Commission receives more complaints against credit bureaus than any other type of business. If you call the FTC today to report a complaint about the credit bureaus, their phone mail system will ask you if to press one if your complaint is about the credit bureaus, and press another number if your complaint is about anything else. Clearly, this situation evolved out of deep consumer frustration with the uncooperative nature of the credit repair process. Remember, the credit bureaus are primarily interested in protecting their profits. Investigating your challenge consumes these profits. Short of sparking a large number of lawsuits, the credit bureaus seem to do everything in their power to discourage consumers from making progress with their credit repair. Repairing your own credit is like repairing your own transmission or representing yourself in court; it is possible, but you must decide if your are willing to take the time and assume the risks of doing it yourself.Unless you hire a professional to help you, credit repair will have to become a full-fledged hobby. | ||||||||||||||||||||||||||||||||||||||||||||||
| If I declare bankruptcy, can I begin my credit report all over with a clean slate? Many bankruptcy attorneys do not adequately understand or explain the effects of bankruptcy to their clients. Stated simply, bankruptcy is to the credit rating what the atomic bomb is to the battlefield.When you file for bankruptcy, every credit account that you decide to include in bankruptcy will become an “included in bankruptcy” item. Additionally, a bankruptcy filing and bankruptcy discharge listing will appear in the court records section of your credit report. Because so many negative items are attached to the bankruptcy, it becomes very difficult to remove all trace of the bad credit. If at all possible, you should avoid bankruptcy. | ||||||||||||||||||||||||||||||||||||||||||||||
| Can I file a “100′word statement” on my credit report explaining my side of the story and will creditors read my statement and take it into consideration? No known creditor considers information given in a 100-word statement. It makes one wonder why they included this meaningless stipulation into the Fair Credit Reporting Act.Most creditors will not even look at the credit report when a credit application is made. Rather,they will simply take a numerical score from the credit report and make a determination as to whether or not they should extend the credit. This score, or FICO score,does not take into consideration the contents of a 100-word statement.The statement does, however, verify that some of the negative listings on the credit report are technically accurate. This just makes your credit repair job more difficult. Make 100-word statements the first things you delete from your credit file (if you ever added one in the first place.) |
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| By changing numbers in my social security number or by using an EIN tax number, can I fool the credit bureaus into creating a completely clean, new credit file under my name?Many credit repair operators have promoted this scheme, known as “file segregation”. Technically, we have seen some few people that have succeeded in using a false Social Security Number and have fooled the credit bureaus into giving them a new identity. The scheme is complicated: one must change almost all identifying information about oneself and be very careful never to use the old information again. Most often, we’ve seen people embark on these schemes only to slip and, at some time, provide the old information mixed with the new. Then, both credit reports merge and the consumer is left with a tangled mess of deception and suspicious credit reports.In the worst cases, people have been charged with crimes, or terminated from jobs, for using the false information.This scheme has proven to be complex, difficult, and (according to the FTC) illegal. Lying about any personal information on a credit application is usually a federal crime. Using these “file segregation” credit repair schemes requires an enormous amount of coordination, not to mention personal risk.Recently, the FTC has gone out of its way to shut down any credit repair company that promotes literature discussing file segregation. It remains to be seen if they will be successful under the First Amendment.If asked for our recommendation as to whether a person should try a file segregation credit repair program, our answer is always, “No, it is too risky, difficult and legally problematic.” | ||||||||||||||||||||||||||||||||||||||||||||||
| If I build enough good credit, will it offset my bad credit and make me credit worthy?Any amount of bad credit is devastating to your chances of being approved by a credit grantor. Most credit grantors never actually look at your credit report. A computer pulls your credit report, rates your credit standing, income, indebtedness, and stability, generates a number (or FICO score,) then spits out an acceptance or denial. Even one or two slow pays will usually trigger a credit card or personal loan denial. The slightest amount of negative credit will cause the interest on an auto loan to skyrocket. You will probably find that even a little bad credit, regardless of how much good credit you have, is an unacceptable barrier to credit approval. |
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| If I’m having trouble paying my bills, can I go to Consumer Credit Counseling Service and will they help me to repair my credit?Consumer Credit Counseling Service or CCCS is a nonprofit debt counseling service that assists consumers who are over their heads in debt. CCCS is funded and controlled by the credit grantors and the credit bureaus.Often, CCCS provides a beneficial service to the consumer. Because of the obvious allegiance between CCCS and the credit bureaus, you cannot reasonably expect CCCS to do anything that the credit bureaus would frown upon, such as help you repair your credit.In fact, if you decide to leave CCCS before you have finished their program, they can list your failure to complete the process as a negative listing on your credit report (though this is rare.) When you are participating in the CCCS program, your creditors will often note it on your credit report. If you have perfect credit, and wish to keep it, you may not want to use a credit counseling service. These services usually create negative listings because their process will generally make you late on your bills at least 30 days.The fact that you resorted to a debt counseling program is a red flag for prospective credit grantors. Remember, paying off your debts is a step in the right direction, but it does not repair your credit.With these factors in mind, consumer credit counseling can be a life-saver if you’re over your head and need some help and some breathing room. |
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| Is it illegal for creditors to take a negative, accurate listing off my credit report? They tell me that the law requires that these items remain on the credit report for at least seven years.When you speak with credit grantors, collection agencies, or credit bureaus, their typically under-educated staff may tell you all manner of such pseudo-legal nonsense. The law demands that negative listings appear on your credit report for no longer than seven years. The credit grantor or the credit bureau can choose to delete the negative credit listing whenever they see fit. | ||||||||||||||||||||||||||||||||||||||||||||||
| How hard is it to repair my own credit?Repairing your credit by yourself is possible. But remember, the credit bureaus are committed to the failure of credit repair efforts, and the credit bureaus have far more experience in discouraging hopeful consumers than you have in beating giant credit bureaus.Yet, some consumers have achieved results in repairing their credit without professional assistance. The following is a guide to help you determine whether or not you should seek professional assistance in your credit repair efforts.Attempting to repair your own credit while failing to dedicate sufficient time or attention can result in further damage to your credit rating and may make it impossible for anyone to repair your credit for you. For this purpose, we’ll give you a preview of the time commitment required to repair your credit. Examine very carefully your capabilities and your schedule before deciding to repair your own credit.
This chart shows liberal estimates of time required to repair your own credit. If you are a single person working on his/her credit alone, you can subtract 25% from the total time required. This time investment will continue on a monthly basis, gradually shrinking as creditors agree to delete their listings. On the average, you can expect the process to take between twelve to eighteen months, unless you have very little negative credit (meaning, one negative item per report.) Each response to a creditor or a credit bureau must be an original and must pertain specifically to your present situation or you may be red-flagged as a frivolous credit repair troublemaker or be ignored altogether. There are no effective “form letters” or “fill in the blank” responses that yield results. Credit bureau checkers spot form letters easily as the sign of someone attempting to repair their credit. As such, these letters generally earn a swift “frivolous and irrelevant” response. Dueling with the credit bureaus and credit grantors requires an aggressive and tenacious personality. You must be willing to wade through rejection after rejection until you achieve your desired credit repair. The credit bureaus will shoot down the majority of your claims and disputes. They will treat you like a disreputable person and a liar. You must take this rejection without becoming discouraged. If you are the kind of person who tires quickly from an emotional struggle, you should seriously consider hiring a professional to repair your credit. If you are the kind of person who becomes angry when dealing with the slow, bureaucratic employees of big bureaucracies, you will not fare well. Patience is an absolute requirement. If you are thick-skinned and have the fortitude to fight the credit bureaus and your creditors for as long as it takes, then you may have the proper disposition to repair your own credit. In the process of repairing your credit, you will have to track and monitor dozens of communications at once. This will require organized, disciplined habits. Every day, you must check up on each of these communications to make sure that the credit bureau or credit grantor hasn’t overextended their time limit. You must spend at least one-half to one hour per day tracking your responses, results, and taking appropriate actions. Remember, you will be dealing with three credit bureaus per person, plus you will be communicating with each credit grantor appearing on each credit report. In most cases, the number of simultaneous communications will exceed twenty or thirty. If you are not a very organized person, you are definitely not in a good position to attempt to repair your own credit. Click Here To Learn More About Credit Repair. |
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To be sure, credit bureaus are working ruthlessly to protect their chief asset - the perception of having accurate data about the credit worthiness of consumers, namely YOU. Fighting to preserve your good name is something that is worth the effort in a multitude of ways. Getting help to clear your good name and your credit report may take professional help however.
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3 in 1 Credit Bureau Report : Find Your Credit Rating
Do the Big 3 Credit Bureaus have you “under their thumb” thinking you can’t do anything to fix your credit score?
Credit Report Repair done right is legal, effective, and increasingly necessary in our “electronic” society.
Do you know the facts?
It’s sad to say, but computer databases seem to mess up credit reports more than they actually HELP them. In fact, 7 out of 10 Credit Reports are incorrect. Sadly, most people do not take positive action to correct these errors because they believe any number of worthless myths. What are these myths? There are too many to list on this page, but you can learn more about credit repair myths here…
Here are some facts about your credit report score or FICO (Fair Isaac) score. The most important thing to realize however is that while your credit report score is a simple, three digit number based on information that may or may not be true, it can hurt you financially in a wide variety of ways.
Fact 1: Failing to repair your credit score meaning can hurt you in a number of ways. For instance, a bad credit rating has a number of hidden costs. Totaled together over time, they can cost you thousands of dollars annually and tens of thousands or hundreds of thousands of dollars over your lifetime. Here’s how:
Your credit report score determines the interest rates you receive on mortgage and auto loans and credit cards. Your credit score can influence your auto or homeowners insurance rates - or keep you from getting insurance at all (the insurers are afraid you’ll stage a claim to get a “windfall”). Trying to get that “dream job”? Your credit report score can keep you from getting hired for a better job! They’re afraid you might dip your fingers in the cash drawer I suppose.
That’s why it’s a FACT that your credit score can make the difference between living well in retirement or continuing to pay off debt into what should be your “golden years”. Bad credit scores can eat away at your income from at least three different angles.
By increasing the expense of borrowing, increasing the cost of insuring your assets, and keeping you from obtaining greater income for your labor, errors on your credit report can increase your expenses, decrease your potential income, and given the time value of money (the opportunity cost of increased expense and decreased income) - credit score problems can make huge inroads into your lifestyle.
You may not be able to do much about how taxes or inflation eat away at your income, but you can fix your credit report score and remove inaccurate and prejudicial information. At least that is something you CAN control!
You can learn more about understanding the meaning of your credit report score here…
Fact 2: Your credit score can be destroyed through identity theft even if you are completely innocent. Frequently this goes on unnoticed long before you realize it unless you are monitoring your credit score and taking aggressive steps to protect yourself. Many only find out when they go to finance a new car or get a home mortgage. You can even be pursued to repay loans taken out in your name using your identifying information unless you protect yourself up front!
Fact 3: “Sticking your head in the sand” may work if you can wait 7 years for your credit report to “clear up” on it’s own. But since there’s nothing to protect you from new false information being added to your credit file, denial and avoidance are not recommended strategies! The 7 year time limit keeps getting extended.
Do you know your legal rights with regard to your credit score?
Right #1: “Credit Reports” are governed by Federal Law and you have a legal right to challenge their content for it’s accuracy. Learn more about your legal rights here and here…
Right #2: Items challenged on your credit report must be verified within a legally mandated time limit or be removed.
Right #3: You have the right to retain an attorney who specializes in the Federal laws governing your credit report to challenge inaccuracies in your credit file.
Right #4: You have the right to receive professional help from a credit repair attorney without paying large up front fees or outrageous hourly charges. Many lawyers charge $150 to $500 dollars per billable hour. Choose the right credit repair attorney and you’ll be paying a small fraction of these amounts per month!
Learn more about deleting bad credit information legally - even bankruptcies!
Note: Fighting the Big Three Credit Bureau “System” is serious business. You must understand your credit score meaning and take the proper steps to improve your credit report score. Please, don’t make any credit repair decision simply by what you read on a “website”. Some will promise you anything! Instead, protect your interests by calling to talk with a trained paralegal staff about the services they provide. Click here to talk toll free or by online chat… If calling, please write down the special reference number before calling to identify you as our reader!
