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In a recent survey, more than 70 million citizens in the United States have bad credit. Having adverse credit bars you from buying a house, getting a car loan and increases current interest rates on credit cards. Fix your credit. Get accounts current and stop worrying about creditors. Take the first step by receiving your credit report. Learn details about repairing credit and get started today.
Where to Get Started
Did you know that credit bureaus give away a free report each year? Order credit information from three credit-reporting companies, known as Experian, Trans Union and Equifax. You receive it in just a few minutes and can print and save.
Why Do I Need My Credit Report
In a credit report, you receive updated information from every account. This includes credit cards, mortgage information, car loans and any other companies that require your social security number for an account. Details in a credit report also display contact information for each company. Collection agencies’ information lists inside the report if a creditor outsourced an account for collections.
Why Should I Check My Credit Score
With a free credit report, get details about your credit, but the free copy does not include your credit score. Receiving your score is an extra fee through either of the three reporting bureaus or FICO. Pay for the score and discover where you rank. Credit scores determine your eligibility for approval of a loan. You can increase your score through repairing bad credit.
Do It Yourself
Step 1: Create a budget. Determine what you can pay toward debt. Use software to help or a sheet of paper. List all income you now receive and bills. Rank each payment, classifying what is necessity and extra. There are several things you can do to lower bills. Get rid of satellite or cable unless you must watch television for work purposes. Reduce features on your telephone. Take garbage to the dump instead of paying local garbage collectors.
Step 2: Call creditors. Keep creditors informed about your situation. Ask for the minimum amount they will accept each month. If you have an account in charge-off standing, request the lowest payment. Many credit card companies will reduce amounts owed in half.
Although paying a reduced amount will take care of old debt, you might experience a drop in your credit score. Handle this when you first speak with the creditor. Ask that they remove charge-off statuses before making payment. If they do not agree, ask them to remove it after paying. Get any agreement in writing or recorded over the phone. Tell agents you are recording the conversation at the start.
Step 3: Keep payments current. Generate a schedule with creditors and pay on time each month. If you fall behind on mortgage or credit card payments, contact creditors now. Lenders will often reduce payments or suspend them for a short time, according to the Federal Trade Commission.
When to Get Help
Many debtors work jobs that restrain them from having time for calling creditors. Sometimes it is necessary to receive help with negotiating. If amounts owed exceed your current income level, get help from a debt consolidation company. Get credit details of your accounts to continue this step.
Debt consolidation companies will work with creditors on creating a payment plan. Credit counselors will help you budget and learn about establishing good credit. Use their services, helping you walk through the process of re-establishing credit and managing existing debt.
Inaccurate Reporting
When you get your credit report, look over information carefully. According to a Zogby poll, four out of ten people have damaging incorrect information reported. Inaccurate reporting might arise from credit bureaus or creditors. If you think your insurance and current credit card companies do not check your score, think again.
In recent news reports, a woman received notice that her American Express account closed because she had a bankruptcy inaccurately reported, according to Clark Howard, a leading consumer advocate in Atlanta. Another incident involved one man’s credit score, which plummeted from a 760 to a 410 in one month, then restored to its original position. Although you might not think this could happen to you, keeping watch over credit information and score helps you catch any discrepancies that might arise.
Dispute any information that has passed the seven-year reporting limit. If you find inaccurate information, contact the reporting bureau in writing. Experian, Equifax and Trans Union will research the incident. You might have to provide proof that the account is inaccurate. Keep copies of everything and stay in contact with the company until the error disappears.
Monitoring Credit Report
If you fear identity theft, there is a solution. You can receive instant alerts to changes in reporting details. When you sign up for this service through the credit bureaus, you receive email alerts at any time your score or accounts change. This useful feature can help decrease your chance of effects from having your identity stolen. You can instantly call reporting agencies and tell them of any discrepancy on your credit report. Monitoring credit information helps you be active in keeping your identity safe.
Charge-offs
One problem that arises with charge-offs is aggressiveness that creditors exhibit attempting collection of debt a few months before the seven-year limit is up. Debt collectors know that if you start making payments on debt when they contact you, they can possibly have a right to sue. According to the New York City Department of Consumer Affairs, debt collectors should include in contact with you that the statute of limitations has expired if seven years has passed. You reserve the right to have charge-offs taken off your report after seven years from the first missed payment, according to the Fair Credit Reporting Act.
Last Resort
Bankruptcy is a choice, but at a high price. Kenneth Harney, a syndicated writer, reports that bankruptcy can cause your credit score to plunge by 365 points. If you do not earn enough income for the minimum amount owed for debt, you should see a bankruptcy lawyer. They can advise you of possible choices and consequences of filing bankruptcy.
Getting New Credit
When you work toward taking care of bad accounts using credit details, they will still display. You might have to dispute several old accounts. Many will change, reflecting good standing or closed accounts based on your situation. Your credit score should increase. You will not receive a perfect score until you start building credit again. Apply for new credit. Try applying for secured credit cards.
Start changing your credit by getting a credit report. From there, you can judge which path to choose. Use the information listed to straighten credit or get help. Get started closing the bad financial chapter of your life. Receive your credit report today. Start planning your future by repairing credit.
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