If you have a bad credit rating, then you might find that
your ability to get financing, loans, and even some jobs is
greatly diminished.
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.
Basic credit repair
Get organized! Make a folder for all your correspondence
offline and online. You will have to do some snail mailing
but in most cases you can work your repair online.
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.
In fact, even a chapter 11 bankruptcy (erases all negative credit)
is not as bad as many think. I am not advocating filing for
bankruptcy (the laws have changed so you might have to
set up a re-payment schedule if your income allows) but for
those caught between a rock and hard place, unemployment,
medical crisis, divorce...many good reasons for finding yourself
unable to pay your bills, filing for bankruptcy is a god-send.
Many times, you will find creditors very eager to extend credit because
you don't have any debts! It is the irony of the debt-income picture...
if you have a steady income, you will have no problem getting credit
cards, auto loans and even a mortgage.
So, don't despair, your situation is not as bad as you think! You will
find a way to less worry, more sleep and better relationships.
To begin correcting your credit, 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 if 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).
For the contact information on credit bureaus as well as
samples of letters to send to them, go to:
http://www.repair-credit-right.com
You may freely reprint this article provided the following
author's biography (including the live URL link) remains
intact:
Dan Farrell is the owner of Repair Your Credit...The Right Way and this article on credit repair and others on credit can be found by going to:
Credit Repair
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