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Resolve to Repair Bad Credit in 2012

easysolu2n — Mon, 06 Feb 2012 02:30:57 +0000

Offers for different types of credit repair services are prevalent in the market. IF you need to repair your personal credit, should you sign up for these offers? Although there are trusted non-profit credit counseling organizations that provide free counseling to consumers, there are a lot of agencies that are only after one thing – make profit.

These agencies may present themselves as non-profit and may use outrageous promises to attract people. They may claim to instantly fix your bad credit or to have the power to remove derogatory marks such as bankruptcy, tax liens, and court judgments from your credit report. In reality, these agencies are fraudulent and consumers need to be aware of them to avoid being a victim.

The truth is, you can do certain steps to improve bad credit by yourself. You do not need to pay an agency to help you resolve your bad credit problem. Consider the following steps that you can do to repair bad credit in 2012.

Check your credit report. You are entitled to receive free credit report from each of three major credit bureaus (Experian, Equifax, TransUnion) annually. Order your free annual credit report at www.annualcreditreport.com to make sure that all information and charges in your file are accurate.

In case you find errors, send a credit dispute letter to the bureau that issued your report. In your letter, point out the specific error that needs to be corrected. Enclose photocopies of documents that support your claim and a photocopy of your latest credit report, with the incorrect items clearly marked.

Upon receiving your letter the credit bureau must conduct an investigation which can take up to 30 days. If your dispute is valid, the errors will be corrected and you will receive an updated copy of your report for free. This step can instantly improve your credit score by a few points.

Know the truth. Consumers must understand that no person or company can remove any negative information from a credit report, unless the detail is incorrect. Thus, if a certain credit counseling agency or debt consolidation agency claims to erase negative details from your file, it is a clear sign of a fraudulent agency. If the charges in your account are correct, then it is your obligation to pay back your creditors. However, you can try to negotiate with a creditor and request for modification of the terms to make repayment easier.

Seek free credit counseling. Check out the NFCC’s (National Foundation for Credit Counseling) website for a list of credit counseling agencies that offer free or affordable service. Keep in mind that an agency should not require you to submit any upfront fee before rendering service.

A trusted counselor should spend time evaluating your financial situation. Initial counseling typically lasts for an hour, but follow-up session may be necessary. A genuine counselor should help you devise a suitable debt repayment plan and monthly budget plan. He/she must help you recognize the root of the problem to make sure that you can repair bad credit and avoiding being stuck in the same situation again.

About the Author:

Suzy Vanstrusen is a credit analyst and a writer on the website EZCreditRepairSolutions.com. She has been providing consumers with tips and wise information about credit repair as well as helping you out more with your bad credit loans. Copyright © 2010

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Understanding How the Fair Credit Reporting Act Helps You

easysolu2n — Mon, 23 Jan 2012 01:54:10 +0000

The Fair Credit Reporting Act (FCRA) has been created to protect the rights of consumers. Are you aware of the stipulations of the FCRA? Understanding your privileges and limits can help you avoid bad credit or improve your personal credit. In this article, let’s take a closer look at some of these stipulations.

Free Annual Credit Report

Under the FCRA, all consumers are entitled to receive one free credit report from each credit reporting agency annually. The three major credit bureaus (Experian, Equifax, TransUnion) has set up an official website where consumers can request for their free annual credit report. You can get all your three reports at once or order one copy at a time throughout the year.

To get your free report, visit www.annualcreditreport.com or print out the Annual Credit Report Request Service form from the FTC’s website (ftc.gov/credit) and send it via post mail to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can also request through telephone by calling this toll-free number, 1-877-322-8228.

You will be asked to provide personal information such as your name, address, Social Security number, and date of birth. Hence, it is very important to make sure that you are on the official website when requesting for your free online credit report. Instead of clicking on a link, it is recommended that you manually type the URL (http://www.annualcreditreport.com) in the address bar of your browser.

Take note that annualcreditreport.com is the only website authorized by the government to distribute free consumer credit reports. You might come across other websites that offer free credit reports but these sites might be owned by unscrupulous lenders or identity thieves who are trying to victimize people.

Free Credit Reports

There are also other circumstances that entitle consumers to a free credit report. For example, if you think you have been a victim of identity theft, or if you have been denied by a creditor on account of your credit history, you can request for a free report. You can also ask for your free credit report if you are unemployed and plans to look for a job within the next 60 days.

The Right to Dispute

According to the FCRA, consumers have the right to dispute errors and unauthorized charges in their credit reports. You can also request the bureau to remove outdated information from your file particularly when they are derogatory. Examples of negative remarks that should not remain in your file for more than seven years are bankruptcy, tax liens and court judgments.

If you discovered errors in your credit report, you can send a credit dispute letter to the bureau that issued your report. In your letter, you should clearly identity the items in your file that needs to be corrected. If applicable, enclose copies of documents that support your claim.

The Right to Free or Affordable Credit Repair Service

Under the law, a legitimate credit repair agency must provide a customer with a copy of the “Consumer Credit File Rights under State and Federal Law” before signing a contract. This document stipulates your consumer rights and obligations to make sure that you will not be scammed or ripped-off by fraudulent credit repair agencies.

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Get Your Free Credit Report in 2012

easysolu2n — Mon, 16 Jan 2012 06:03:18 +0000

All consumers in the US are entitled to receive one free credit report each year from each of the three credit reporting bureaus – Equifax, Experian, and TransUnion. You can request a report from one bureau at a time or get all your three credit reports at once. This is clearly stipulated in the Fair Credit Reporting Act (FCRA) and the three major bureaus must comply.

This 2012, you can start the year right by checking your free credit report. Why is it important to check your personal credit report? Checking your file will give you the opportunity to ensure that all the details are accurate and up-to-date. It is also a great precautionary measure against the threat of identity theft, as you can be immediately alerted in case someone might be using your personal information to open new accounts or commit fraud.

If you plan to apply for a loan such as a car loan or a housing loan next, checking your credit report is a crucial step. Errors in your report can badly pull down your credit score so if you notice anything that needs to be corrected, you can immediately notify the credit bureau. Fixing an error in your report can instantly boost your score. Consequently, a higher credit report score will enable you to access better loan deals and get approved more easily.

Where you can you request for your free report? The three major bureaus set up an official website for free consumer credit reports – www.annualcreditreport.com. Keep in mind that if you will order directly from a credit bureau, there is fee of $9 to $12 for each report.

To order your free online credit report, you can visit the website or call the toll-free number at 1-877-322-8228. You can also print out the Annual Credit Report Request Service form from the FTC’s website (ftc.gov/credit) and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

What information do you need to provide when your order for your free credit report? You must provide your name, address, Social Security number, and date of birth. When you request online from annualcreditreport.com, you will be able to instantly access your report. On the other hand, if you requested via telephone or post mail, you can expect to receive the copy of your free credit report within 15 days.

However, consumers must watch out against fraudulent websites that offer free credit reports as these might be operated by illegal companies or identity thieves. The personal information you provide on these websites to order your free report might be used against you to commit crime. In some cases, unscrupulous lending companies may also offer free credit reports from their website but once you sign up, you might discover that the service is not entirely free at all. You might be forced to sign up for another service that comes with a fee.

Aside from the annual credit report, you may also be eligible to request for a free report if you suspect to be a victim of ID theft, if you have been denied credit by a creditor or insurer because of your personal credit, or if you are unemployed and plans to seek a job within the next 60 days.

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How to Rebuild Your Personal Credit for Free

easysolu2n — Mon, 09 Jan 2012 05:46:42 +0000

Is it possible to rebuild your own credit? If you have a poor credit score or bad credit history, what can you do to repair it? The good news is that there are steps you can by yourself to improve bad credit. However, it’s important to remember that repairing bad credit takes time. Complete credit rehabilitation cannot be done overnight.

How long will it take for you to get out of bad credit? The length of time it will take to repair bad credit depends on the situation. Needless to say, if you currently have a credit score way below average, you might need a little more time to work for improvement. It can take anywhere from six months to a year or a few years to achieve an excellent status, depending on the steps you take to improve your credit.

The earlier you start rebuilding bad credit, the sooner you can regain good credit as well. So, don’t feel disheartened if your current credit is not perfect. Check out these tips on how you can repair your personal credit for free.

Evaluate your credit report. All consumers are entitled to receive one free credit report each year from the three major credit bureaus (Experian, Equifax, TransUnion). You can request for your free report at www.annualcreditreport.com. It’s a good idea to get your annual free report at the start of 2012, especially if you need to repair your personal credit.

Clean up errors. By checking your credit report, you will be able to see whether all the information and charges in your report are correct. Take note that errors can badly pull down your credit score. You can instantly improve your score by a few significant points by correcting these errors.

Send a credit dispute letter to the bureau that issued your report via registered post mail. In your letter, point out the exact items in your report that needs to be correct. You should also enclose photocopies of documents that support your claim and a photocopy of the report with the errors clearly marked.

This process can take up to 30 days. From the date of receipt of your letter, the bureau will conduct an investigation and if your dispute is valid, the necessary corrections will be applied and the bureau will send you an updated copy of your report.

Speak with your creditors. Some people think that they always need the help of a debt consolidation company to negotiate their debts. However, you can personally speak with your creditor to negotiate a new repayment term that will work for you.

Before approaching a creditor, carefully assess your situation and create a repayment plan. Explain to your creditor the reason why you are struggling with repayment and request if your current repayment terms can be modified. You can even ask a creditor to lower your interest rate or waive the penalty fees to make it easier for you to catch up with repayment. Most creditors are willing to modify their terms if they can see your willingness to stand by your obligations.

Seek free counseling. You can acquire professional advice from a non-profit credit counseling organization accredited by the government. Check out the NFCC’s (National Foundation for Credit Counseling) website for a list of agencies that offer free credit counseling service.

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How to Check Your Credit Report

easysolu2n — Mon, 05 Dec 2011 01:44:16 +0000

If you have not already done so, you will need to get your hands on a credit score. This is the magic number that lenders and others judge you by. Once you know the number, you take a big step toward managing your credit. As you go looking for credit scores, you’ll be inundated with offers. Go to any search engine and type in the words “credit score.” Every one of the listed results will have your phrase prominently displayed and bolded.

Any time you get a loan, ask your lender for your credit score. Since they just pulled your credit reports, they will have an up-to-date credit score for you. If you don’t like what you see, dig deeper. Order your credit reports and see what may be affecting your scores.

You need to be careful out there because you’re working with some very sensitive information. If you give your sensitive personal information to the wrong party, you risk becoming a victim of identity theft. Stick with the big names, or ask your lender which credit score they use when evaluating a borrower.

Your FICO credit score

The granddaddy of all credit scores is the FICO score. The Fair Isaac Corporation pioneered credit scoring, and is deeply entrenched as a market leader. For most mortgage loans, lenders will look at your FICO credit score. This is because selling mortgages in the secondary market has traditionally been easier if the borrower had a good credit score. The use of the FICO score for automated underwriting is beginning to shift, but the FICO credit score is still by far the dominant scoring model.

Because of its dominance, you might consider buying your credit report score directly from the Fair Isaac Corporation. That way, you will be sure to get a FICO credit score, not an imitation. You can purchase your FICO credit scores directly from Fair Isaac at their consumer web site, www.myfico.com. If you only need one credit score (because you know which credit-reporting company your lender will use) then you can buy a single score from a single bureau. If you want a FICO credit score from all three of the credit-reporting companies, you can buy those as part of a complete package.

While the FICO credit score is a strong market leader, the VantageScore may catch up. VantageScore is the scoring model created by the three major credit-reporting companies: TransUnion, Equifax, and Experian. To purchase your VantageScore, you can visit one of the credit-reporting companies’ Web sites, or you can do so at www.vantagescore.com.

Buying Other Scores

You can buy other scores, but you may not want to. There are a million different vendors out there selling credit scores of questionable value. There is so much confusion about credit and credit scores that these companies get away with selling consumers a score that a lender will never use. The major credit-reporting companies are guilty of this. However, they also sell FICO credit scores, so you have to be careful when buying from them. You might get a proprietary score, or you might get the genuine article. Read the fine print to make sure you get what you want. Other scores typically score you a little higher than your FICO credit score would be, giving you a false sense of security.

Monitoring Services

You can also buy credit scores in conjunction with credit-monitoring services. Typically, these services might hold themselves out to be identity-theft protection services. As an added bonus, they say that they will throw in a credit score. Unfortunately, these credit scores are rarely FICO credit scores. They might move up and down similar to the way the FICO credit score will move, but they’re not exactly the same.

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Understanding How Credit Scoring Works

easysolu2n — Mon, 28 Nov 2011 01:48:56 +0000

Do you know how the credit scoring system works? Many consumers may be familiar with a credit report and credit score, but some may not fully understand the whole process behind the credit scoring system. In this article, let’s talk about basic facts about credit reporting. Understanding how credit scoring works will help you avoid bad debt and keep your personal credit in good standing.

What is a credit score?

The credit score is numerical value used by credit reporting agencies to define an individual’s credit worthiness. Banks, lending companies, and creditors check credit report scores to determine whether a person can be granted approval. Some lenders may require a high credit score while others can be less exacting when it comes to gauging credit scores.

There are three major credit reporting agencies that monitor account activities of consumers. These are Equifax, Experian and TransUnion. Each credit bureau does its own independent reporting and uses its own credit scoring model.

Equifax uses the FICO scoring system, created by the Fair Isaac Corporation. The other two bureaus Experian and Trans Union created their own model which is based on the FICO scoring system. The FICO score ranges from a low of 300 to a high score of 850.

Calculations are made based on five basic factors: payment history (35%), credit utilization (30%), length of credit history (15%), types of credit (10%), and credit inquiries (10%). Based on these criteria, it is easy to see why timely payment of your bills can dramatically affect your personal credit rating. At 35%, even a few misses on your due dates can badly pull down your credit score.

Another significant factor is how you utilize your credit limit. Credit utilization makes up 30% of your total FICO score so if you have a high debt-to-credit ration, your score can really drop. This is why financial experts recommend not using more than 40% of your credit card’s limit, even if a credit card offers zero APR or a low interest rate. If you get into the habit of maxing out your limit, your credit score can suffer.

The other three factors are just as important. Length of credit history makes up 15% which is why students are encouraged to apply for their own student credit card as soon as they are ready to handle debt and repayment.

What about the types of credit you use? This makes up 10% of your FICO score. For instance, owning multiple credit card accounts will not boost your score. You can show your capability to handle debt and credit effectively by managing different types of debts such as a personal loans, mortgage, auto loans, aside from a credit card.

Finally, credit inquiries or hard inquiries made by creditors in response to your credit application can affect your credit score. This is why consumers are strongly advised not to submit multiple applications to various lenders at once just to see who will grant approval more quickly. Instead, you should take time evaluating your options and once you have found the right creditor, then that’s the only time you can submit an application.

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What You Can Do to Boost Your Credit Score

easysolu2n — Mon, 21 Nov 2011 01:27:37 +0000

Are you concerned about your personal credit score? Would you like to boost your credit? If yes, consider the following credit repair tips:

Check your report. The first important step is to get a copy of your personal credit report from each of three major bureaus (Equifax, Experian, TransUnion). If you have not yet received your free report for this year, you can request for it by visiting www.annualcreditreport.com. All consumers are entitled to one free annual credit report so be sure to take advantage of this privilege.

Fix errors. There might be differences with each report so make sure that all your three reports contain accurate information. By fixing errors in your credit reports, you can make a significant improvement in your current rating. What kinds of errors can be fixed? Unauthorized charges, charges that have been paid, outdated information such as a record of bankruptcy or foreclosure older than seven years, and inaccuracies with your personal details (spelling of your name, a missing digit in your SSN, etc).

If you find any error in your report, you should immediately send a credit dispute letter to the bureau that issued your report. Upon receiving your letter, the bureau will conduct an investigation which can last up to 30 days. If your dispute is valid, the necessary corrections will be made on your credit file. The bureau will also notify the two other credit reporting agencies about the updates and send you an updated copy of your report for free.

Pay off your debts. If you have unpaid debts in your name, the only way you can repair bad credit is for you to pay your creditors. Remember that you are personally responsible for the repayment of your debts and no credit counselor or credit repair agency can magically erase the charges in your report.

Negotiate with your creditors. What if you can’t pay off all your debts at once? If this is not possible, you should speak with each creditor and try to work out a new repayment plan that is suited to your current financial situation. Don’t be afraid to admit that you are experiencing crisis. Trying to hide the truth will not be helpful. Instead, you need to be honest and request your creditor to make adjustments in your repayment terms.

Some people might be hesitant to try this step. But many creditors would gladly modify their terms to help a borrower who is experiencing financial problems rather than wait for them to file for bankruptcy. If you’re having second thoughts or if you’re not sure how to negotiate properly, you can ask advice from a trusted credit counseling agency.

Don’t be scammed. People who are in deep financial trouble can be an easy prey to scammers and fraudulent agencies that offer “instant debt relief”. If an agency promises to get you out of debt in an instant without any effort on your part, you are most likely dealing with a fraud. You can check out the NFCC or National Foundation for Credit Counseling’s website for a list of accredited agencies that offer low-cost or free counseling.

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Where to Get Your Online Credit Report

easysolu2n — Mon, 14 Nov 2011 01:22:47 +0000

Would you like to check your credit report? If yes, did you know that you can actually order your report for free? Yes, all consumers are entitled to receive one free report per year from each of the three major credit bureaus – Experian, Equifax, TransUnion. This is in accordance with the Fair and Accurate Credit Transactions Act (FACT Act) so if you have not yet received your free credit report for this year, then you should.

Where can you order your annual credit report and credit score? The three credit bureaus have set up a website for free annual consumer reports. www.annualcreditreport.com is the only online resource authorized by the government to distribute free credit reports. You can either request for one report from one bureau at different times throughout the year, or order all your three reports at once.

You may come across other websites that offer free online credit report and credit score. However, consumers should be careful about signing up for a free report from unknown websites. The free credit report and credit score offer may turn out to be bait. You may be required to sign up for one of the services the agency offers before you can claim your free report.

If you have already received your free credit reports for this year, you can still monitor your report by ordering directly from the three major credit bureaus. This service comes with a fee ($9 to $12 per report) but if you want to make sure that your report is accurate, the fee is well-worth it.

There are also other circumstances when you can get your credit report for free. For example, if you have been denied credit or if you suspect to have been a victim of ID theft, you are entitled to get a free report. Are you presently unemployed? If you plan to look for a job within the next 60 days, request for your free report from any of the three major bureaus.

Check Your Credit Report

As soon as you received your credit report, carefully examine your file for errors, incorrect details or outdated information. In case you find any mistake, be prepared to send a credit dispute letter to the bureau that issued your report. Even a single error can badly hurt your final rating so it’s important to update your report right away.

If you have been discharged from bankruptcy seven years ago, make sure that the record of bankruptcy does not appear in your report any longer. Other derogatory remarks such as foreclosure, tax liens, and other court judgements can only remain in your report for seven years. After this period, you should request the bureau to remove these remarks from your report if it’s still there.

When should you check your report? Ideally, you should check your report at least twice a year. Doing so is your best protection against fraud and ID theft. If you are going to apply for a credit card or a loan, it is also recommended that you check your report prior to submitting your application.

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Writing an Effective Credit Dispute Letter

easysolu2n — Mon, 17 Oct 2011 01:20:19 +0000

Do you need to write a credit dispute letter? If you recently checked your credit report and noticed unauthorized charges or incorrect details in one of your accounts, then you should definitely send a dispute letter to the bureau that issued your report.

The question is, how can you write an effective dispute letter that will surely get the bureau’s attention? On this post, we present tips and techniques on writing credit repair letters:

Check your facts. Before going through the process of cleaning up your credit report, see to it that your dispute is a valid one. If you want to dispute debts that you already paid but still appear as unpaid in your report, see to it that you have proofs that you did send payment.

Check out sample letters online. You can find sample credit dispute letters from the internet. Look for ones that tackle an issue or problem that is quite similar to your own situation. You can actually use these letters as a guide on creating your own. However, be careful not to copy the exact sample letter as you may forget to change the details.

Proofread your letter before sending it out. Make sure that there are no typographical errors or grammatical errors in your letter. Double check the details especially the items in your report that needs corrections. Check the spelling of your name and your address to make it easy for the bureau to locate your file and to make sure that your identity will not be mixed up with another person.

Make it clear and straightforward. A dispute letter need not be lengthy or elaborate. You do not need to include the full story behind your dispute. What’s important is for you to point out the exact error in your report and provide a brief explanation why you it needs to be corrected. Two to three short paragraphs should be enough.

Enclose a photocopy of your report. Include a photocopy of your latest credit reports and mark the items that you are disputing. Mention in your letter that a copy of your credit report is enclosed.

Enclose proofs of your claim. Include COPIES of receipts or documents that support your claim. Never send the original documents as this will be your personal reference. Mention the specific documents you’ve enclosed in your letter.

Send via First Class Mailing. First Class Mailing gives you the Return to Sender option. This way, you can be sure that your credit dispute letter will reach the credit bureau and not get lost along the way.

Wait for 15-30 days. Upon receiving your letter, the bureau must send a response informing you that an investigation regarding your complaint has already been started. The investigation can take up to 30 days to complete. If your dispute is found valid, the bureau will send an updated copy of your credit report for free and it will notify the two other major credit reporting agencies about the corrections made in your file.

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Guides and Facts about Credit Repair Services

easysolu2n — Mon, 10 Oct 2011 01:25:21 +0000

Advertisements on various types of credit repair services can be found everywhere. The fact that a lot of people need help or advice in rebuilding their credit history and credit score has brought about the emergence of companies or agencies offering credit repair services.

Unfortunately, not all credit help available today are legitimate. Some companies that offer fast credit repair help are actually fraudulent and are out to make money at the expense of people suffering from bad credit. How can you protect yourself against such companies? Consider these reminders:

Don’t believe false promises. Is the agency offering to fix your bad credit in exchange for a fee? You may come across credit repair agencies claiming to magically fix bad credit by removing negative items from your report.

But the truth is, no person or agency can remove derogatory information from your credit reports unless it is outdated. For instance, if you have a record of bankruptcy, delinquent payments, tax liens, and other court judgements, these will remain in your report for at least seven years.

The only way you can improve your score is by paying off your debts and staying current with your payments. Opening a new account is also a great way to rebuild bad credit as long as you will be able to submit your payments on time.

If a credit repair agency advices you to create a different identity and other illegal tactics, you should never heed the advice. For instance, there are people who use an Employer Identification Number in place of their Social Security Number to cover up their poor score. However, be warned that if you resort to these methods to improve, you are putting yourself at a greater risk. You may face lawsuits if you get found out.

Do what you can do. If you want to improve your credit score, there are some things you can do on your own. For example, you can begin by checking your personal credit report. Order a copy of your annual credit report from each of the three major credit bureaus (Experian, Equifax, TransUnion).

See to it that there are no errors or outdated information in your report. Remember that errors can negatively affect your credit score. However, you can ask the credit bureaus to do the necessary corrections by sending a credit dispute letter.

Be patient. Repairing bad credit takes time. Remember that no credit repair service can help you regain good credit overnight. You will need to work for improvement and it can take anywhere from a year to a few years, depending on your present credit standing.

Be informed. Do your own research. You can actually find a lot legitimate companies and organizations accredited by the government. These companies offer credit counseling services so you can be given correct and specific advice on how you can rebuild bad credit.

Check the US Department of Justice website (http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm) for a list of approved credit counseling agencies. The National Foundation for Credit Counseling of NFCC (www.nfcc.org/) is another resource where you can find agencies that offer financial counseling and education.

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