Archive for Credit
Dec
25
Building New Credit for Credit Repair Success
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Ian Webber asked:
Build New Credit Now
The most common credit repair mistake people make is putting off building new credit. If bad financial times have left you without open accounts you must start the rebuilding process now. No matter how successful you are in correcting derogatory items on your credit report if you do not have any open accounts your credit score will not get off the ground. Your credit score is based on both the positive and the negative information on your credit reports. Removing the negative is essential, but without open accounts in good standing the credit scoring formula has nothing to grade you on.
No Excuse for Delay
The logic most people apply in delaying the opening of new accounts as part of a credit repair program is the belief that it would be better to wait. No one wants to get denied. The problem with postponing the task of opening new credit is that it takes time for the new accounts to be an asset. The first few months your new accounts are open will be a drag on your scores. It is best to get started today and to let those new accounts become seasoned. Your credit repair efforts can be very satisfying if you do it right.
Get the Right Type of Credit
If the quality of your credit is not sufficient to be approved for regular credit cards, just get secured cards, they are every bit as valuable for your credit repair efforts. If you are rebuilding your credit from scratch you should get two new secured cards. While we are on the subject it is worth mentioning that not all types of credit are equally beneficial. Focus on building your credit with MasterCard, Visa, American Express, and Discover. Avoid store cards and consumer credit like furniture store loans at all costs when your credit repair project is getting underway. These forms of credit are of questionable benefit and may even depress the scores of those with little credit depth.
Managing Your New Credit
Once you have opened your new credit cards you can pump up your credit repair efforts significantly or you can become your own worst enemy. These new little credit cards can easily make a difference of one hundred points in your scores, in either direction, depending on how you manage them. The FICO scoring formula to a surprising extent hinges on the balances you maintain on your cards. Specifically FICO recognizes card usage in 20% increments. It is handy to be aware that if you want the largest credit repair benefit you should use less than 20% of your available limit. And if you max out one of your new cards you can expect a precipitous breathtaking drop in your scores. If this should happen to you, here is a bit of good news. All you need to do is pay your balances back down again and your score will pop right back up, just as quickly as the creditor reports the new balance to the credit bureaus.
Credit Repair and Installment Debt
Generally speaking, in the long term it is very good for your credit repair efforts to have a balanced mix of credit types. As mentioned above store cards and consumer debt, such as furniture store loans are the exception; if you are making a credit repair effort I suggest you steer clear of these debt types altogether. Once your credit is well established you can feel free to use consumer debt and enjoy the discounts that often come with these new accounts. Automobile loans and mortgages are a healthy counterpoint to well managed revolving debt. From a credit repair perspective both of these credit types should be part of a long term credit building strategy. Unlike revolving debt, which can influence your scores dramatically from month to month in either direction based on your balances, the real impact of these installment loans builds over time as the FICO scoring model give you credit for longevity.
Get Some Credit Repair Help
There are a lot of little details that can make a significant difference in your credit repair success. Unfortunately, not all of these details are a matter of common sense. You need to study up a bit. The credit reporting system and the FICO credit scoring model have evolved into densely complex systems. It is no longer enough to just pay your bills on time and hope for the best. It is not a perfect world and you need to look out for yourself, and it may take some work. Buy a book on credit repair or contact a legitimate credit repair service to light the path for you. You can do it. Good Luck!
Copyright © 2008 Ian Webber. All Content. All Rights Reserved.
Build New Credit Now
The most common credit repair mistake people make is putting off building new credit. If bad financial times have left you without open accounts you must start the rebuilding process now. No matter how successful you are in correcting derogatory items on your credit report if you do not have any open accounts your credit score will not get off the ground. Your credit score is based on both the positive and the negative information on your credit reports. Removing the negative is essential, but without open accounts in good standing the credit scoring formula has nothing to grade you on.
No Excuse for Delay
The logic most people apply in delaying the opening of new accounts as part of a credit repair program is the belief that it would be better to wait. No one wants to get denied. The problem with postponing the task of opening new credit is that it takes time for the new accounts to be an asset. The first few months your new accounts are open will be a drag on your scores. It is best to get started today and to let those new accounts become seasoned. Your credit repair efforts can be very satisfying if you do it right.
Get the Right Type of Credit
If the quality of your credit is not sufficient to be approved for regular credit cards, just get secured cards, they are every bit as valuable for your credit repair efforts. If you are rebuilding your credit from scratch you should get two new secured cards. While we are on the subject it is worth mentioning that not all types of credit are equally beneficial. Focus on building your credit with MasterCard, Visa, American Express, and Discover. Avoid store cards and consumer credit like furniture store loans at all costs when your credit repair project is getting underway. These forms of credit are of questionable benefit and may even depress the scores of those with little credit depth.
Managing Your New Credit
Once you have opened your new credit cards you can pump up your credit repair efforts significantly or you can become your own worst enemy. These new little credit cards can easily make a difference of one hundred points in your scores, in either direction, depending on how you manage them. The FICO scoring formula to a surprising extent hinges on the balances you maintain on your cards. Specifically FICO recognizes card usage in 20% increments. It is handy to be aware that if you want the largest credit repair benefit you should use less than 20% of your available limit. And if you max out one of your new cards you can expect a precipitous breathtaking drop in your scores. If this should happen to you, here is a bit of good news. All you need to do is pay your balances back down again and your score will pop right back up, just as quickly as the creditor reports the new balance to the credit bureaus.
Credit Repair and Installment Debt
Generally speaking, in the long term it is very good for your credit repair efforts to have a balanced mix of credit types. As mentioned above store cards and consumer debt, such as furniture store loans are the exception; if you are making a credit repair effort I suggest you steer clear of these debt types altogether. Once your credit is well established you can feel free to use consumer debt and enjoy the discounts that often come with these new accounts. Automobile loans and mortgages are a healthy counterpoint to well managed revolving debt. From a credit repair perspective both of these credit types should be part of a long term credit building strategy. Unlike revolving debt, which can influence your scores dramatically from month to month in either direction based on your balances, the real impact of these installment loans builds over time as the FICO scoring model give you credit for longevity.
Get Some Credit Repair Help
There are a lot of little details that can make a significant difference in your credit repair success. Unfortunately, not all of these details are a matter of common sense. You need to study up a bit. The credit reporting system and the FICO credit scoring model have evolved into densely complex systems. It is no longer enough to just pay your bills on time and hope for the best. It is not a perfect world and you need to look out for yourself, and it may take some work. Buy a book on credit repair or contact a legitimate credit repair service to light the path for you. You can do it. Good Luck!
Copyright © 2008 Ian Webber. All Content. All Rights Reserved.
Dec
23
The Amazing Truth About Credit Repair
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Jim Kemish asked:
The Great Credit Repair Misconception
Before starting your credit repair project you must overcome a very common psychological barrier. I’m not talking about the fear of dealing with your credit report. I’ll assume that you can handle the moment of terror many people feel when sitting down with a copy of their credit report. The real credit repair barrier is much more subtle.
Things Are Not What They Seem
There is a widespread misunderstanding about credit repair that if you can recognize the information reported it is accurate. This is far from the truth. It is true that credit reports should accurately represent your payment, or non-payment history. But this is only partially correct. The information the credit bureaus provide must conform to a litany of regulation, much of limits not only the time they are allowed to report information, but the circumstances in which they are allowed to report.
Your Rights
What does this mean? It means there may be many derogatory items on your report that stem from real events, but should not legally be on your report. Millions of consumers proofread their reports with absolutely no knowledge of the reporting rules that may allow them to remove a significant number of damaging items. This is a major issue.
The Cost of Misinformation
I have seen an amazing number of people achieve more than a hundred point increase in their credit score by simply consulting a credit repair expert to help them identify the derogatory items that should not be on their report. I believe that there may be over one hundred million people in the United States who are paying premium interest rates on car loans, credit cards, and mortgages because of the errors on their reports.
The Silent Credit Killer
There is virtually no publicity about this problem. On the contrary, there is a widespread public perception that most credit repair efforts are futile and even of questionable legality. This is an economic travesty, as millions of people who could easily improve the quality of their life through a round of intelligent credit repair are dissuaded by misinformation.
Free Your Mind
Before starting your credit repair efforts you need to eliminate all of your pre-conceptions about credit reporting accuracy. Forget about looking only for the unfamiliar derogatory information. You cannot afford to assume that anything on your report is accurate just because you have a recollection of the event involved. You need to educate yourself or hire a legitimate credit repair service to intercede on your behalf.
Credit Repair Laws
The body of law which provides the credit reporting guidelines that all national credit reporting agencies must adhere to is called the Fair Credit Reporting Act (FCRA). Beyond the FCRA itself there are thousands of Staff Opinion Letters which clarify the intent and practical application of the law. An informed credit repair effort must utilize all of this information. Remember that your credit score is not to be taken lightly. This is truer today than ever before. A lazy attitude about your credit score will take money out of your pocket.
Collections Are Misunderstood Too
And there is more. Many people who have had legitimate credit issues in the past are now being confronted by collectors. The same lack of information that devastates so many people’s credit scores applies to their legal rights in dealing with collection situations. The body of law that governs the collection industry is called the Fair Debt Collection Practices Act (FDCPA). The FDCPA provides consumers with powerful collection defenses, virtually none of which are known by the very people who could benefit the most.
Take Action Now
A little bit of credit repair information can pay amazing dividends. You can either educate yourself or consult a credit repair expert. If you are going to try it on your own make sure to invest time in the learning process. It’s not hard, but will take some effort. One of my favorite books on credit repair by one of the most prominent exponents of the do-it-yourself movement starts by warning you not to take any action until reading the entire book; it is 500 pages long.
Spread the Word
The credit crisis has made it exceedingly clear; the time has come for consumers to understand their legal rights. Credit repair has the potential to offer significant and even life-changing benefits. If you have experienced the potential of intelligent informed credit repair, spread the word.
Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.
The Great Credit Repair Misconception
Before starting your credit repair project you must overcome a very common psychological barrier. I’m not talking about the fear of dealing with your credit report. I’ll assume that you can handle the moment of terror many people feel when sitting down with a copy of their credit report. The real credit repair barrier is much more subtle.
Things Are Not What They Seem
There is a widespread misunderstanding about credit repair that if you can recognize the information reported it is accurate. This is far from the truth. It is true that credit reports should accurately represent your payment, or non-payment history. But this is only partially correct. The information the credit bureaus provide must conform to a litany of regulation, much of limits not only the time they are allowed to report information, but the circumstances in which they are allowed to report.
Your Rights
What does this mean? It means there may be many derogatory items on your report that stem from real events, but should not legally be on your report. Millions of consumers proofread their reports with absolutely no knowledge of the reporting rules that may allow them to remove a significant number of damaging items. This is a major issue.
The Cost of Misinformation
I have seen an amazing number of people achieve more than a hundred point increase in their credit score by simply consulting a credit repair expert to help them identify the derogatory items that should not be on their report. I believe that there may be over one hundred million people in the United States who are paying premium interest rates on car loans, credit cards, and mortgages because of the errors on their reports.
The Silent Credit Killer
There is virtually no publicity about this problem. On the contrary, there is a widespread public perception that most credit repair efforts are futile and even of questionable legality. This is an economic travesty, as millions of people who could easily improve the quality of their life through a round of intelligent credit repair are dissuaded by misinformation.
Free Your Mind
Before starting your credit repair efforts you need to eliminate all of your pre-conceptions about credit reporting accuracy. Forget about looking only for the unfamiliar derogatory information. You cannot afford to assume that anything on your report is accurate just because you have a recollection of the event involved. You need to educate yourself or hire a legitimate credit repair service to intercede on your behalf.
Credit Repair Laws
The body of law which provides the credit reporting guidelines that all national credit reporting agencies must adhere to is called the Fair Credit Reporting Act (FCRA). Beyond the FCRA itself there are thousands of Staff Opinion Letters which clarify the intent and practical application of the law. An informed credit repair effort must utilize all of this information. Remember that your credit score is not to be taken lightly. This is truer today than ever before. A lazy attitude about your credit score will take money out of your pocket.
Collections Are Misunderstood Too
And there is more. Many people who have had legitimate credit issues in the past are now being confronted by collectors. The same lack of information that devastates so many people’s credit scores applies to their legal rights in dealing with collection situations. The body of law that governs the collection industry is called the Fair Debt Collection Practices Act (FDCPA). The FDCPA provides consumers with powerful collection defenses, virtually none of which are known by the very people who could benefit the most.
Take Action Now
A little bit of credit repair information can pay amazing dividends. You can either educate yourself or consult a credit repair expert. If you are going to try it on your own make sure to invest time in the learning process. It’s not hard, but will take some effort. One of my favorite books on credit repair by one of the most prominent exponents of the do-it-yourself movement starts by warning you not to take any action until reading the entire book; it is 500 pages long.
Spread the Word
The credit crisis has made it exceedingly clear; the time has come for consumers to understand their legal rights. Credit repair has the potential to offer significant and even life-changing benefits. If you have experienced the potential of intelligent informed credit repair, spread the word.
Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.
Dec
23
Answering Some Common Questions About Credit Repair
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James Sampson asked:
Credit repair is one of those topics that most people are not familiar with and many of those that think they are, do not have a correct understanding of what credit repair really is. To help provide an introduction to the concept, provided below are answers to three common questions people have about credit repair.
Is Credit Repair Legal?
Absolutely! All a creditor has to do is report a negative item to a credit bureau for it to be added on your credit reports. They do not have to prove that you did anything wrong and the credit bureaus are not going to contact you to get your side of the story.
By disputing the items in your credit reports, you are asking the credit bureaus to perform an investigation to determine if the negative items on your credit reports are being reported correctly. If they are not, then they must be revised or removed.
In a perfect world, credit repair would not be necessary, but because of the obvious flaws in the credit reporting system, the Fair Credit Reporting Act was enacted to protect your rights against unfair credit reporting. Because of this act, you have the right to dispute any items in your credit reports that you feel are not completely accurate.
How Do Inaccurate Items End Up On My Credit Reports?
There are a number of reasons why inaccurate items could end up on your credit reports. For example, a simple human error such as typing in your Social Security number instead of someone else’s could result in their bad credit showing up on your credit reports. Also, mistyped dollar amounts, items reported more than once, incorrect dates, and other errors could results in errors on your credit reports.
Another common reason for credit errors is mistaken identity. It is very common for your credit reports to show negative items from someone else with your same name. This could happen if you have a fairly common name or in some cases, in the case of a son who is named after their father. It has happened many times that someone gets denied for credit only to find out that a bankruptcy or some other serious negative item has been erroneously added to their credit reports because someone else with the same name was not responsible with their finances.
Finally, identity theft is a major source of credit reporting errors. Someone steals your personal information and destroys your credit all in your name.
Can I Save Money and Repair My Credit Myself?
Yes, you have every right to repair your credit yourself. As is mentioned in numerous credit repair articles, anything a credit repair company can do, you can do yourself.
Of course, this is true of almost any service. Just as you have the right to repair your own credit, you also have the right to change your own oil, cut your own hair, or even represent yourself in a court of law. But as is also the case of these services, many people find that is is easier, cheaper, and more effective to hire a professional.
When considering whether or not to repair your credit yourself, also consider what your time is worth. Depending on the severity of your credit problems and the cooperation level of your creditors, effectively repairing your credit reports could involve learning about and analyzing your credit reports, researching the Fair Credit Reporting Act, research the Fair Credit Billing Act, researching the Fair Debt Collection Practices act, writing and sending dispute letters to the credit bureaus, writing and sending dispute letters to your individual creditors, and properly responding to all of these entities.
Many people find that it is simply easier to get help with credit repair than to do it themselves. In fact, a sizable percentage of people who end up using a credit repair company to help them with their credit reports do so after already trying to repair their credit themselves.
Credit repair is one of those topics that most people are not familiar with and many of those that think they are, do not have a correct understanding of what credit repair really is. To help provide an introduction to the concept, provided below are answers to three common questions people have about credit repair.
Is Credit Repair Legal?
Absolutely! All a creditor has to do is report a negative item to a credit bureau for it to be added on your credit reports. They do not have to prove that you did anything wrong and the credit bureaus are not going to contact you to get your side of the story.
By disputing the items in your credit reports, you are asking the credit bureaus to perform an investigation to determine if the negative items on your credit reports are being reported correctly. If they are not, then they must be revised or removed.
In a perfect world, credit repair would not be necessary, but because of the obvious flaws in the credit reporting system, the Fair Credit Reporting Act was enacted to protect your rights against unfair credit reporting. Because of this act, you have the right to dispute any items in your credit reports that you feel are not completely accurate.
How Do Inaccurate Items End Up On My Credit Reports?
There are a number of reasons why inaccurate items could end up on your credit reports. For example, a simple human error such as typing in your Social Security number instead of someone else’s could result in their bad credit showing up on your credit reports. Also, mistyped dollar amounts, items reported more than once, incorrect dates, and other errors could results in errors on your credit reports.
Another common reason for credit errors is mistaken identity. It is very common for your credit reports to show negative items from someone else with your same name. This could happen if you have a fairly common name or in some cases, in the case of a son who is named after their father. It has happened many times that someone gets denied for credit only to find out that a bankruptcy or some other serious negative item has been erroneously added to their credit reports because someone else with the same name was not responsible with their finances.
Finally, identity theft is a major source of credit reporting errors. Someone steals your personal information and destroys your credit all in your name.
Can I Save Money and Repair My Credit Myself?
Yes, you have every right to repair your credit yourself. As is mentioned in numerous credit repair articles, anything a credit repair company can do, you can do yourself.
Of course, this is true of almost any service. Just as you have the right to repair your own credit, you also have the right to change your own oil, cut your own hair, or even represent yourself in a court of law. But as is also the case of these services, many people find that is is easier, cheaper, and more effective to hire a professional.
When considering whether or not to repair your credit yourself, also consider what your time is worth. Depending on the severity of your credit problems and the cooperation level of your creditors, effectively repairing your credit reports could involve learning about and analyzing your credit reports, researching the Fair Credit Reporting Act, research the Fair Credit Billing Act, researching the Fair Debt Collection Practices act, writing and sending dispute letters to the credit bureaus, writing and sending dispute letters to your individual creditors, and properly responding to all of these entities.
Many people find that it is simply easier to get help with credit repair than to do it themselves. In fact, a sizable percentage of people who end up using a credit repair company to help them with their credit reports do so after already trying to repair their credit themselves.