Avoiding Credit Repair Scams – Bad Credit Help

Avoiding Credit Repair Scams – Bad Credit Help

If you have less than perfect credit, you’ve probably seen advertisements for credit repair services. In newspapers, TV, radio, and on the Internet credit repair services claim to be able to remove bankruptcies, create new credit identities, and even erase bad credit.

Unfortunately, many of these credit repair companies exist only to cheat money out of their customers. After you’ve paid them hundreds of dollars in fees, these credit repair companies simply vanish because they can’t deliver what they have promised. The only real way to improve your credit report is with time, effort, and a personal debt repayment plan.

If you decide to work with a credit repair service, there are certain warning signs you should look for to decide if the company is legitimate. A credit repair service should not want you to pay for credit repair services before any services are provided. Another warning sign is if a credit repair service recommends that you not contract the credit bureau directly or refuses to answer questions about your legal rights as a debtor.

Some phony credit repair services will advise you to dispute all information in your credit report or take any action that seems illegal, such as creating a new credit identity by applying for an Employer Identification Number to use instead of your Social Security Number. If you follow illegal advice and commit fraud, you may be subject to prosecution. It’s a federal crime to make false statements on a loan or credit application, to misrepresent your Social Security Number, or to obtain an Employer Identification Number from the IRS under false pretenses.

Negative information on your credit report is generally reported for seven years. Bankruptcy information can be reported for ten years. Default information regarding US government insured or guaranteed student loans can be reported for seven years.

While no one can legally remove accurate and timely negative information from a credit report, the good news is that the law does allow you to request a reinvestigation of information in your file that you dispute as inaccurate or incomplete. According to the Fair Credit Reporting Act, you can dispute mistakes or outdated items for free. Ask the credit reporting agency for a dispute form or submit your dispute in writing. Include supporting documentation, clearly identify each item in your report that you dispute, explain why you dispute the information, and request a reinvestigation. Make sure you remember to keep a copy of the dispute for your records. If the new investigation reveals an error, ask that a corrected version of the report be sent to anyone who received your report within the past six months. If the reinvestigation does not resolve your dispute, have the credit bureau include your version of the dispute in future reports.

Many states have laws regulating credit repair companies. If you believe you have been cheated by a fraudulent credit repair service, don’t hesitate to report the company to your local consumer affairs office or your state attorney general.

What is Credit Counseling? – Bad Credit Help

What is Credit Counseling? – Bad Credit Help

If you are in trouble financially, you have probably heard the term “credit counseling,” but do you understand what it is? Oftentimes this term is used in the same sentence as debt negotiation or debt settlement, but actually, it’s a completely different process. With credit counseling, you will actually work with a credit counselor to pay off your debt in smaller, monthly lump sum payments that you can afford.

The people most likely to need credit counseling are those who are receiving troubling phone calls from bill collectors, or whose accounts have gone to collection agencies. If you think that you may benefit from using a service like this, please read the following outline of the best way to work with a credit counseling service.

First, you’ll need to be able to identify a good credit counseling service, and not fall victim to one of the many scams that are out there. Start by avoiding any ads that promise you quick fixes for your credit report-quite simply, there is no such thing. Instead, look for a reliable company accredited by Consumer Credit Counseling Services.

Next, you’ll have to meet with your credit counselor, and provide them with all of the details of your debt. Don’t be tempted to leave anything out because he or she will need that information in order to create a workable re-payment schedule for you.

Now, you’ll get to sit back and allow the credit counselor to work for you. They will contact all of your lenders and inform them that you are trying to create a plan that will allow you pay off your debts. They will work with them all and coordinate a re-payment schedule that you can live with. Oftentimes, they will be able to lower your interest rates in order to allow for lower payments.

Some credit counseling services offer a debt management system. What is it? Instead of having to keep up with all of the payments yourself, you will have the option of submitting one lump sum payment to the credit counseling service and they will do it for you. One note of caution here: there have been instances of a credit counseling services missing their client’s payments, and if that happens, your credit report will suffer for it. Knowing that, be sure to check out the company thoroughly before signing up for their debt management program.

What will you pay for all of these services? A reputable company will only charge you a small fee, somewhere around fourteen dollars per month. That’s another way to know if you are dealing with a scam operation-if they want a lot of money up front, it’s almost a guarantee that they don’t have your best interests at heart.

You should be aware that working with a credit counseling service can do some damage to your credit report. However, for most people who are at the stage in their financial lives who would even consider such a move, would most likely benefit from it. After all, it’s much easier to explain away an honest attempt to get your finances in order than it is to explain a bankruptcy or a report full of charge-offs.

Your Credit Report Can Be The Envy Of All Your Neighbors!

Your Credit Report Can Be The Envy Of All Your Neighbors!

Sometimes, by the time you find out that there is such a thing as “AAA credit”, it’s only because you don’t have it anymore. It is possible to repair your credit once things have gone wrong and reestablish credit at that level, but beware of gimmicks. There are the obvious options of bankruptcy, credit counseling, and debt negotiation in order to get your credit cleaned up. Those are viable options, but you may be disappointed to find out that they will take some time to reestablish your credit rating-sometimes years. Many people try and bypass these common sense methods and instead turn to the plethora of books and videos that promise to give you an “AAA Credit Rating in 30-Days.” They make promises of “credit secrets,” and amazing tricks that they will share with you-for a fee. Unfortunately, all of these are either scams, or someone packaging and selling information that’s available for free. In short, if your goal is to reestablish AAA credit, it might be best to take the long road instead of the quick fix.

If you are just starting out with a clean slate and want to build fabulous credit and keep it, the first thing you’ll need to do is to set up a checking and a savings account. Points will be deducted from your score if you don’t have them. If you don’t have any credit history, begin by getting a credit card that has a manageable limit and low interest rate. Secondly, don’t borrow more than you can pay back. As you begin to use credit cards, which are an excellent way to build AAA credit, make sure you don’t go over credit limits or keep balances too high. Eventually, you will want to own two to four cards. This will help your score because it shows lenders that you are managing your credit and you can handle the responsibility. If you are trying to rebuild, you may have to start with a secured credit card, and then build from there.

It’s important to keep your debt to income ratio under 20 percent, and don’t make too many requests for additional credit. Every inquiry for a credit card or a loan shows on your report. If there are more than four over the past year, that’s a strike against you. Stability with your home and your employment helps a great deal in establishing AAA credit. If you’ve been in your home four years or longer, and with your current employer for five years or more, you add more points to your score.

Finally, make sure to monitor your credit history. There are agencies that will send you notification every time someone makes an inquiry on your report and will allow you a certain number of requests for your credit report per year. If you don’t require that much monitoring, just request a copy of your report once a year from each bureau. Look it over carefully and then follow the procedures to challenge any errors in writing. If you are diligent and responsible, you will have AAA credit before you know it!