Financial Education
Credit Repair
How to Repair a Bad Credit Rating, The Right Way!
If you have a bad credit rating, then you might find that your ability to get financing, loans, and even some jobs greatly diminish.
Once you have a bad credit rating, it might seem like there's nothing that you can do about it but you don't have to believe that. It's not as difficult as you might think to get by with a bad credit rating; with a little work and time you can even repair it! Of course, before you do that it's important to realize exactly what a credit rating is.
Every time a lender or other creditor makes a report concerning your payment history to them, this report affects your credit score.
Your credit score is a numerical indication of the positive and negative reports that you've received from creditors and lenders; if the number is high then you have a good credit rating, and if it's low then you have a bad credit rating.
In the U.S. a 630 rating will qualify you for a mortgage. You can still get credit with a lower score but not at a premium interest rate.
The important thing to do is obtain your credit report and study it. Mark all the negative items. Most unsecured credit, mostly credit cards, can stay on your report for 7 years. If you find any over that, write to the credit bureau and ask them to remove it. They are required by law to research and report back within 30 days.
If they don't, you can threaten them with a letter to the Better Business Bureau or Federal Trade Commission.
Find any other negative items and determine they are correct. If not, write the bureau and tell them its not your debt.
Even if you aren't sure, ask the credit bureaus to investigate. Many times, they will not be able to verify the debt because the credit card company, auto loan company or other creditor won't get back them within 30 days (required by Fair Credit Act).
HOW TO IMPROVE YOUR FICO SCORE
Lenders analyze your credit scores to establish whether or not to grant you a home mortgage, a car purchase, and nearly all other types of loans. If you think that you may apply for credit sometime soon, it would be advisable to improve your credit status. However, note that this quick fix can only deal with current credit issues and not the ones which have been present for years.
The best way to have good credit history is always pay your bills on time. In case you do come across rough patch contact your creditors as soon as possible and discuss the best course of action you should follow. If you are vigilant and contact them within a good time period the companies may agree upon a lower rate or work out a payment arrangement. This can help reduce the portion that shows up on your credit reports. You can also consider contacting a non profit credit counselor.
It goes without saying that maintaining your credit card balances, and if possible, paying your bills regularly are good ways to keep your credit score good. Don't open new accounts that you don't require as a quick fix to achieve a better debt-to-credit-limit ratio. It actually would lower your score.
Similarly, don't open a number of new accounts in a short span of time, particularly if your credit history is no more than three years. Adding accounts too rapidly may be read as you are not able to handle your credit responsibly. Quite a few credit inquiries in a small time could lower you FICO score as you are attempting to open multiple new accounts.
The types of credit accounts for 10 per cent in your FICO score. These consist of credit cards or retail cards and loans such as installment loans, mortgages and car loans. You can loss as much as 20-40 points for such credit.
Faq's
What happens to my creditors while I'm saving on my program?
Creditors want you to pay the full amount of your debt, but they understand that lending money is a risk. They do not want you to file bankruptcy because they know if you do, they may receive nothing. They may try to recover the debt, assign it to a collection agency or sell it to another debt recovery agency altogether. However, creditors are typically open to debt arbitration once they understand that they cannot recover the full amount debt amount as a result of your financial hardship. This is why it is important that our clients have legitimate financial hardships. Debt arbitration is an established practice, but not everyone is qualified.
Can't I negotiate on my own; some creditors have already offered me a deal?
Certainly, However our company and affiliates have a growing relationship with creditors ,a high success rate , and arbitrate debt in volume. Therefore our company can negotiate a substantially lower settlement amount.
Whats the difference between debt settlement and debt consolidation?
debt consolidation programs let you consolidate your monthly payments, often with a reduced interest rate and a lower monthly payment. With debt settlement you also have only one monthly payment, but instead of paying it to creditors each month it goes in a savings account until there is enough to offer your creditors a settlement.
What type of results do your clients typically see?
While individual results vary, Our average client typically saves between 25% to 50% of the balance owed.
How will a creditor know I joined your program?
When you complete your enrollment forms, we notify your creditors that you have joined our debt arbitration program and we will send them an official proposal that includes all the pertinent information that your creditors require. If there are no changes to the proposal, you can begin the program. If changes are necessary, we will notify you of the requested changes. The majority of creditors are willing to work with debt management plans. Its a better alternative than if you decided to file for bankruptcy. In the end, a debt management program is more beneficial for them and you.
What is the Fair Debt Collection Practices Act (FDCPA)?
This is a federal law that protects consumers from harassment or threats made by creditors. It also prohibits creditors from making false statements. This law also prohibits a debt collector from disclosing what you owe to anyone but you or your attorney.
