What it Takes
You can hire the best credit repair company in the world, send the sharpest dispute letters ever, validate every debt you have, and still be left with crummy credit scores. Do not get me wrong, cleaning up your credit report is important, but by itself it will not get you to your goal.
The Measure of Success
In the final analysis, great credit is all about you. What makes your credit great? Your credit scores are the only measure of credit repair success that counts. credit repair Credit scores are designed to gauge your ability to repay debt, and the formula employed places by far the most weight on the way you manage your open accounts.
Learn the Tricks
So, while your credit repair company works hard at cleaning up the tangle of old errors on your report, you need to settle into a new program of thoughtful and prudent account management. For the most part this is all common sense, but there are some formula specific tricks you need to know if you do not want to accidently shoot yourself in the foot.
The Right Accounts
Are you are wondering what you could possibly need to do aside from making your payments on time? There is plenty. For a start, the credit scoring model in use by the vast majority of lenders values certain types of credit more than others. Understanding this will insure that your efforts will bear fruit. The right accounts to use for credit repair are major revolving credit cards, specifically MasterCard and Visa.
Wrong Types of Debt
Debt types to avoid, at least when it comes to building the edifice of your new improved credit, are store cards and all forms of consumer credit such as furniture store loans, and electronics and appliance financing. credit repair These types of debt can be convenient, and are essentially not bad, but will deliver a muted benefit on the positive side, while punishing you terribly if you err.
Low Balances Equal High Scores
The other major issue that you must accommodate is the weight that the scoring formula places on your account balances. If you let your balances run up to the limit your scores will be dismal. credit repair The optimal level of card usage for credit repair purposes is under twenty percent of the total limit. Depending on your limit, this may be a tiny amount, so use your debt as you wish, but beware of the correlation.
Save a Little Each Month
Many people embarking on this endeavor find it helpful to start a savings plan. If you find yourself running your checkbook down to nothing by the end of each month, you may want to review your entire budget and make room for a modest regular contribution to a savings account. Savings is the perfect complement to credit repair. When an unforeseen expense pops us you will have the resources to keep up your timely payments.
The Goal is Yours
So, although the contribution of a good credit repair company can play a big role, in the final analysis it is all about you. There are a lot of things that you can aspire to in your life. Great credit is a worthy goal. The good news is that great credit is perfectly attainable. You can do it, just make the effort and the goal is yours!
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Thursday, July 1, 2010
The Pros and Cons of Do It Yourself Credit Repair
With more and more people losing jobs and falling behind on their mortgage and other credit obligations, maintaining a good credit rating has become extremely difficult. What makes matters worse is that the scoring method imposed by the credit bureaus is punitive in nature and punishes a person for 7 to 10 years. Criminals receive lesser sentences than someone who has had the misfortune of losing their job or had a serious health issue. For those of you that have low credit scores and are in today's version of "debtor's prison" you can fight back.
HOW? is the question. Before you go into battle, you need to develop a strategy. The very first step is to find out exactly what is on your credit report. credit repair You are entitled to a free credit report one time per year. You can order one from each of the credit bureaus or you can sign up with a monitoring service where they will provide you with a credit report and report any changes that occur. Once you have your credit report you will have to go through each and every item that is being reported by your creditors. This is where most people have the most difficulty and start to question whether they should hire a professional credit repair company or try to do it themselves. There are pros and cons for both methods.
The biggest benefit for Do It Yourself Credit Repair is the savings. For the cost of paper, stamps and a little elbow grease, you can dispute the items that are reported incorrectly. While it is true that you can do for yourself what a credit repair company can do for you, and in some cases, you may actually do a better job of it. The problem is that most people do not know their legal rights. Congress enacted several consumer protection laws. The most widely recognized laws are the Fair Debt Collection Practices Act ("FDCPA") and the Fair Credit Reporting Act ("FCRA"). The other problem is what, and how to dispute and/or challenge the information provided by a creditor to the credit bureau. While it is easy to find the most obvious errors such as your name, date of birth or social security number, the mumbo, jumbo they use for the actual creditor information is archaic and very difficult to interpret or understand. In fact, one of the most widely abused practices used by creditors is misrepresenting the date of first delinquency. This is the date that is used to start your 7-year sentence and in many cases, this information doesn't even get reported or shown on your credit report. Creditors routinely report incorrect balances, account numbers and a multitude of other errors. credit repair Each negative item is then used to calculate your credit score so it is vitally important that the information be correct.
The biggest disadvantage to do it yourself credit repair is that the credit bureaus spend thousands of dollars each year discouraging individuals from using a credit repair company and encouraging them to dispute the items themselves. They even provide you with an online dispute process. The question you should be asking yourself is WHY? It's important to know that a credit bureau is a privately owned "for profit" corporation and their primary business is gathering information "for a fee" and selling that information "for a fee" to companies that are interested in extending credit to their customer. In other words, the credit bureaus' customer is your creditor or your potential creditor. The information they receive from their customer is what gets reported on your credit report. They apply the philosophy of the "customer is always right," and will always trust that this information is accurate if their customer says it is so. So the judge and jury has already ruled in favor of the creditor and if the proper procedures aren't followed during the dispute process you will be found guilty.
The biggest advantage to using a reputable credit repair company is that they know the laws and they know what to look for when looking at your credit report. credit repair They will use every legal method available to fight for your rights.
So which is better? Only you can answer that question. If Do It Yourself Credit Repair is the method you choose, I would recommend that before you make your decision, you should do some research of the consumer laws and learn as much as you can before sending off that first dispute letter.
Web Designer PSD to Wordpress
HOW? is the question. Before you go into battle, you need to develop a strategy. The very first step is to find out exactly what is on your credit report. credit repair You are entitled to a free credit report one time per year. You can order one from each of the credit bureaus or you can sign up with a monitoring service where they will provide you with a credit report and report any changes that occur. Once you have your credit report you will have to go through each and every item that is being reported by your creditors. This is where most people have the most difficulty and start to question whether they should hire a professional credit repair company or try to do it themselves. There are pros and cons for both methods.
The biggest benefit for Do It Yourself Credit Repair is the savings. For the cost of paper, stamps and a little elbow grease, you can dispute the items that are reported incorrectly. While it is true that you can do for yourself what a credit repair company can do for you, and in some cases, you may actually do a better job of it. The problem is that most people do not know their legal rights. Congress enacted several consumer protection laws. The most widely recognized laws are the Fair Debt Collection Practices Act ("FDCPA") and the Fair Credit Reporting Act ("FCRA"). The other problem is what, and how to dispute and/or challenge the information provided by a creditor to the credit bureau. While it is easy to find the most obvious errors such as your name, date of birth or social security number, the mumbo, jumbo they use for the actual creditor information is archaic and very difficult to interpret or understand. In fact, one of the most widely abused practices used by creditors is misrepresenting the date of first delinquency. This is the date that is used to start your 7-year sentence and in many cases, this information doesn't even get reported or shown on your credit report. Creditors routinely report incorrect balances, account numbers and a multitude of other errors. credit repair Each negative item is then used to calculate your credit score so it is vitally important that the information be correct.
The biggest disadvantage to do it yourself credit repair is that the credit bureaus spend thousands of dollars each year discouraging individuals from using a credit repair company and encouraging them to dispute the items themselves. They even provide you with an online dispute process. The question you should be asking yourself is WHY? It's important to know that a credit bureau is a privately owned "for profit" corporation and their primary business is gathering information "for a fee" and selling that information "for a fee" to companies that are interested in extending credit to their customer. In other words, the credit bureaus' customer is your creditor or your potential creditor. The information they receive from their customer is what gets reported on your credit report. They apply the philosophy of the "customer is always right," and will always trust that this information is accurate if their customer says it is so. So the judge and jury has already ruled in favor of the creditor and if the proper procedures aren't followed during the dispute process you will be found guilty.
The biggest advantage to using a reputable credit repair company is that they know the laws and they know what to look for when looking at your credit report. credit repair They will use every legal method available to fight for your rights.
So which is better? Only you can answer that question. If Do It Yourself Credit Repair is the method you choose, I would recommend that before you make your decision, you should do some research of the consumer laws and learn as much as you can before sending off that first dispute letter.
Web Designer PSD to Wordpress
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