Fix Credit

By: James Credit

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Wednesday, 30-May-2012 10:13 Email | Share | | Bookmark
Fix Credit Score - Some Useful Tips

When your credit score gets calculated their are five pieces of information that are used to give you your overall credit score. This scoring model looks at your: payment history, amount owed, length of credit history, new credit, and types of credit used.

First let's look in more detail at your payment history. This is where your credit report comes in to play and the accounts are examined, do you have any late or missed payments? Do you have and credit card charge-offs, collections, outstanding debts, repossessions…

Your payment history is 35% of your overall score. We would encourage you to work with lenders to remove any negative information. Additionally it would also be in your interest to dispute and fix bad credit listings the bureaus directly.

The next most important piece of information is your amount or debt owed. This is also known as your ratio of available credit to debt and it accounts for 30% of your overall credit score.

This is going to take into account all the debts you have such as: credit cards, student loans, car loans, mortgages… It also is going to look at how much available credit you have. For example unused credit on your credit card.

It is important to show that you have available credit because this makes you appear that you are in a much more secure financial position than if you can't borrow a dollar on any of your credit lines. However it is important also to show that you do have a balance on your credit card because this will display that you do responsibly use your credit. The experts recommend keeping a monthly balance of roughly 30% of your overall credit limit to improve your credit rating.

The next piece of information is your length of credit history and this is only 15% of your overall credit score. This is going to look at, how long have you been using credit. For example when did you get your first credit card. It also is going to look at how old each individual account is, the idea is the older the account the better a credit risk you are. In other words don't close old credit cards because your credit score may suffer.

The last two items are: what types of credit do you have and your new credit. The types of credit you have is just what it sounds like, what types of credit lines are you using for example: credit card, personal loan, student loan… The idea is the more diverse or different your accounts are the better your score will be.

Your new credit is looking at how often you are applying for new lines of credit. The scoring model understands that it is normal to have your credit report checked periodically just in the everyday of life.

For more about how credit repair companies and credit repair firms will work under the Fair Credit Reporting Act to legally fix credit marks on your credit reports.

Wednesday, 30-May-2012 10:12 Email | Share | | Bookmark
Credit Repair Firms - Professional and Legal Credit Repair

If you have discovered that you have bad credit or are just simply tired of living with a low credit score then you can benefit from hiring a credit repair firm. The main benefit to hiring a credit repair firm is that they are going to handle the credit bureau dispute process, negotiate with any active debt collectors, and clean up your credit report for you.

Frequently a credit repair service is going to be a group of credit attorneys that specialize in consumer credit laws and frequently you will have a paralegal actually perform the work on your case. These companies use the Fair Credit Reporting Act which gives you the right to dispute and challenge any item on your credit report with the credit bureaus.

How Does It Work

You need to send a copy of all three of your credit reports, one from each major credit bureau to the service that you hire. On your credit reports you also need to indicate what items you want to dispute and potentially remove. Now, the credit repair service is going to create and send a dispute letter to each one of the bureaus requesting that they investigate the bad credit items that you have indicated on your credit report.

The credit bureaus will frequently respond to a dispute letter requesting more information. This is an attempt on the credit bureaus behalf to frustrate and get individuals to give up on their credit report dispute. The credit bureaus are private, profit generating businesses, and investigating consumer disputes does not generate any revenue or income for the credit bureaus.

Therefore the credit bureaus try to avoid investigating consumer disputes and only investigate a select few because they are required to by federal law and the Fair Credit Reporting Act. Many people are surprised to hear that the credit bureaus have been fined by the FTC multiple times for not complying with the Fair Credit Reporting Act and investigating consumer credit report disputes.

The credit bureaus hesitancy and frustration generating tactics with handling consumer disputes is what created an alternative in the form of professional credit repair services. It is important to do your homework and proper research to avoid any credit repair firm that requires a large upfront payment, wants to give you a new identity, or wants you to do anything else that sounds unethical and illegal.

Legal credit repair comes in the form of disputing bad credit information on your credit report and some debt settlement for some individuals. The credit repair lawyers and staff will handle all continuing communications with the credit bureaus, however you will receive letters directly from the credit bureaus and you will need to forward this information on to your credit repair firm.

This way you can all stay on the same page and ensure that the firm is only performing pertinent work and not wasting time disputing an item that has already been removed. Professional services have been around since the early 1990s and we encourage you to choose a company with a long established track record.

For more about how credit repair companies and credit repair firms will work under the Fair Credit Reporting Act to legally fix credit marks on your credit reports.

Wednesday, 30-May-2012 10:10 Email | Share | | Bookmark
Do Credit Repair Companies Work?

Credit repair companies that promise to work under the Fair Credit Reporting Act and other consumer credit laws to remove any inaccurate, incorrect, and unverifiable information from your credit report do work and legally. However those services that promise to give you a new identity, credit profile, or any too good to be true outcomes should be avoided and viewed with suspicion.

Credit repair companies were created not just to make things easier for consumers but because of a legitimate need for these services. There are many reasons you can have incorrect information on your credit report such as: a collection agency reporting your debt longer than legally mandated, a record-keeping mistake, a lender mistake, a paid account, fraud…

It is reported that one in every four credit reports contains an error. This error on your credit report could be the difference between you getting approved for financing or rejection. Additionally it is reported that employers checking a job candidate's credit record before offering them a position is continuing to rise. In other words more and more employers are checking your credit report before offering you a job.

Congress passed federal law called the Fair Credit Reporting Act which gives you and every US citizen the right to dispute any item on your credit report directly with the credit bureaus. This is the law that credit repair companies will utilize to potentially remove negative information from your credit report.

The debt accounts that are reported to the credit bureaus must be reported following strict federal laws and they must be verifiable. In other words if a collection agency is reporting that you owe a debt of $2000, for example, then if the credit bureaus request documentation or even verification of this account then collection agency must comply.

When you file a credit report dispute or a credit repair firm files a dispute on your behalf you are requesting that the account on your report be verified. According to credit bureau insiders roughly 50% of all credit bureau investigations result in an item not getting verified by a collection agency or lender. If this happens then the credit bureaus must comply with the Fair Credit Reporting Act and remove this item from your credit report.

If you happen to have an item that is verified this doesn't mean you have to just live with it. We encourage you to hire a firm that has professional credit attorneys on staff because they may be able to negotiate with the debt collector, request escalated disputes, and use other legal tools to challenge an item on your credit report.

Why Won't The Credit Bureaus Respond To You

The credit bureaus will respond to you, however a little known secret is that when credit bureaus correct information that they have collected about you they are only spending money. The credit bureaus are private businesses and are profit motivated, just like any private business.

The credit bureaus are spending potential profits when they investigate consumer disputes and instead will try to avoid it. We also feel that Washington has been influenced by the big-money credit reporting generates in our economy because they have given the credit bureaus the power to decide if your credit report dispute is valid before the bureau is required to investigate.

Naturally the credit bureaus use this to their full advantage and it takes multiple communications before a dispute is deemed valid and investigated. If you have a company with credit lawyers on staff you can feel more confident that the bureaus will comply with your dispute requests.

For more about how credit repair companies and credit repair firms will work under the Fair Credit Reporting Act to legally fix credit marks on your credit reports.


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