How To Spot Credit Repair Scams

Be leery if you are tempted to contact a credit-repair company. The Federal Trade Commission and several attorneys general have sued credit-repair companies for falsely promising to remove bad information from credit reports. Here are tips to follow:

Contact the Attorney General's Consumer Protection Hotline at 800-392-8222 to check for complaints made against a company.

Avoid companies that tell you truthful information can be changed or erased to improve your credit or that only the credit-repair company can remove old or inaccurate information. These claims are false.

Be wary if you are asked for a large sum of money before the credit-repair company completes the job. A money-back guarantee will not protect you from a disreputable company.

Avoid new credit identities

If you have filed for bankruptcy, you may be the target of a credit-repair scheme, often called "file segregation." Here, you are promised a chance to hide unfavorable credit information by establishing a new credit identity.

However, there is a problem: File segregation is illegal. If you use it, you could face fines or imprisonment.

Other scams

Consumers looking for an easy fix often are targets of other credit-related scams:

Credit by phone: Pay-per-call or 900-number services have become a popular vehicle for credit scams. Advertisements promise that "guaranteed" credit or cash loans are only a phone call away. Instead, the caller might only receive a list of banks offering low-interest credit cards or a booklet on how to establish credit — and a phone charge of $50 or more. Consumers rarely end up getting credit.

Gold or platinum cards: Beware of promotions for gold or platinum cards that promise to get you credit and build your rating. Although they may sound like all-purpose credit cards, some cards only permit you to buy merchandise from special catalogs and will not help you obtain other credit. You also might be asked to call a 900 or 976 exchange number for more information. These phone charges add up quickly.

Checking-account scam: This scam, which tricks you into disclosing your checking-account number, typically begins with a postcard advertising easy credit approval or low-interest credit card rates. When you call, you are asked for your checking-account number as "verification." Your number then can be magnetically encoded on a draft, which is forwarded to your unsuspecting bank for payment from your account.

How To Repair Your Credit With Credit Counseling

Budgeting is a skill, like anything else, and takes practice. Some people have a natural aptitude for managing their income and staying in positive standing with their debtors. Most people have some kind of debt, whether it’s a credit card bill, a mortgage, or a car loan. Managing your debts properly will result in a good credit rating, and allow you to receive credit in the future. Making late payments on your loans - or worse, letting them go into default - will leave you saddled with a poor credit rating, robbing you of many opportunities to obtain future credit. To start the process of credit repair, you must take your time and build your credit rating up again. One way to do this involves seeking the assistance of a credit counselor.

Credit counseling is usually performed by non-profit agencies, and should not be confused with credit repair companies for-profit. Credit repair companies that operate for-profit should definitely be avoided. These types of companies, especially the online variety, have a reputation for scamming their customers. Even if the for-profit credit service you end up with doesn't scam you, you’ll likely end up paying them to do something that you could have done yourself. They'll instruct you to obtain a copy of your credit report, challenge all of the negative listings on it, and maybe even suggest that you attempt something illegal to repair your credit: like getting a "new" credit rating using a different address.

Getting help from a credit counselor is the best way to repair your credit. A non-profit credit counseling service will provide you only advice. They won’t try to tell you that rebuilding your credit rating is a quick process. Credit counselors will help you make the long-term plans you need to effectively repair your credit.

A good credit counseling organization will offer you advice, workshops, and educational materials. You will learn to make and stick to a budget, which will be an immense benefit to your financial standing in the long run and crucial to cleaning up your credit rating. A good credit counselor will also provide you with one-on-one help, so you can take a look at what you’ve done wrong in the past and learn what how to make positive credit-related decisions in the future.

Unfortunately, for-profit credit repair companies propose suspiciously quick, one-size-fits-all solutions. If a company claims that they can fix your credit quickly without even knowing anything about your individual situation, they are not being truthful. A credit counselor can provide the individual attention that credit repair companies typically avoid.

The best reason to engage in credit repair with a credit counselor, is the long-term solutions that will result. You will learn how to balance your budget effectively, and make necessary changes in your spending habits. This method is far preferable to paying a fly-by-night credit repair company to provide you with a "quick solution" that has no practical, educational, or financial value to you.

How to Repair Your Credit and Buy a Home

There are three major consumer reporting agencies (CRAs), or credit bureaus, that mortgage companies use to assess a buyer’s credit rating: Experian, Equifax and Trans Union. Credit scores typically range from 300 to 850. For home loan purposes, a score of 650 or higher indicates a good credit history and will make it easy for you to secure a mortgage. If your score falls between 620 and 650, your borrowing capability will be examined more closely. And if you rate below 620, you may have a credit crisis.

When you’re in the market to buy a home and discover that you have bad credit and your score is low, don’t despair. Although it may delay the purchase of your home, there are ways to repair your bad credit rating so that you can still qualify for a home mortgage with a decent interest rate.

To evaluate your credit rating you’ll need to obtain copies of your credit reports from the various agencies. Examine them carefully to see what transactions are lowering your score.

A special note about bankruptcies: A bankruptcy can lower your credit score by 200 points or more. Repairing bad credit following a bankruptcy is beyond the scope of this article.

Charge-Offs: Charge-offs appear on your credit report if a creditor has given up trying to collect from you and ends up writing off the amount you owe as a bad debt. Charge-offs are one of the main reasons why loan applicants are denied credit.

How to Repair It: If you have any charge-offs, contact those creditors immediately and make arrangements to pay off the old debt. After a few months of regular payments, or if you repay a charge-off debt in full, submit a written request to that creditor to change the status on your credit reports.

Late Payments: Late payments are handled slightly different depending on whether they are isolated incidents or recurring problems.

How to Repair It: If you have a single late payment here or there listed on your credit report, the best thing to do is contact your creditors by phone to discuss the situation. Follow the conversation with a written request to have the isolated late payments removed from your reports. If you’re consistently late with payments, however, repairing the problem is a little more involved. You’ll need to begin by setting a pattern of paying on time over several months. Once this positive pattern is established, call your creditors (and follow-up in writing) and let them know that you’re back on track. With persistence and patience, you may be able to delete these score-lowering marks.

Reporting Mistakes: Sometimes, creditors just make mistakes when reporting to the bureaus. Other mistakes might include charge disputes that resulted in an initial late payment that was eventually reversed. Unfortunately, it’s the individual’s responsibility to spot – and repair – reporting mistakes that lead to bad credit.

How to Repair It: Once again, contact your creditor by phone and follow up with a written request that the mistake be corrected. Because the Fair Credit Reporting Act (FCRA) requires that credit agencies and their information providers investigate reports of inaccuracies, you’ll also want to contact the CRA directly to report the discrepancy.

As you work on repairing your credit rating, there are other things you can do to improve your score:

• Make sure that you pay all of your monthly bills on time

• Avoid opening new credit card accounts, including department store cards

• Work toward paying down your unsecured debt, but keep accounts open even if you pay them off

• Pay cash for the things you need instead of charging them

If, after all your work, you still score below the 620 mark, it doesn’t mean that you won’t qualify for a home loan. It may mean, however, that your mortgage will take longer to process and the terms and interest rate may not be as good as you were hoping for. Talk to your real estate agent about referrals to high-risk lenders.

Repairing bad credit can take many months to a year or more. But when you’re ready to buy a home, you’ll be glad you took the time to improve your score – and your mortgage payment will be lower because of your efforts.

How To Repair Your Credit

If you have less than perfect credit, you are probably attracted to the many commercials on TV which promise credit repair and debt consolidation. While there are many things companies can do to help you fix your credit, there are a number of things you can do yourself to get back on your feet. Many people make the mistake of avoidng their lenders. They choose to ignore phone calls or letters which are sent in the mail.

You want to make sure you contact your lenders promptly when you find yourself in a situation where you may not be able to make payments. Calling them to look for options is a responsible thing to do. They are likely to work with you, because they have a vested interest in getting back the money which is owed. If you are willing to setup a budget, most of your lenders will work with you. If you work with your lender, it is likely you won't have to worry about repairing your credit.

Even though your credit score may slightly be lowered if you have problems making payments, things will be a lot worse if you choose to ignore the lender. By showing that you are trying to pay off your debts, you will often find that your credit report remains relatively unchanged. When you decide to ignore them, this is when you will be reported to the credit agencies. Once this happens, it will become difficult to apply for a car, home, or even a job. If you are already in this situation, you should start looking at credit repair services which can help you rebuild your credit.

These organizations can help you setup a budget and payment schedule. It is also important to know your rights with the Fair Credit Reporting Act. If you have been denied employment or other things due to having bad credit, you are allowed to get a free report of your credit history. However, you have to ask for this at least two months after you've been denied. The reason why it is important to get a report of your credit history is because there may be errors.

If you find that information on your report is false, you can file a dispute with the credit agency to get the issue resolved. Though this will cost you nothing, you have to explain why the information on the report is false.

How To Deal With A Credit Bureau To Repair Your Credit

Good credit is crucial in today's economy. Good credit allows you to have credit cards, obtain car or home loan, and to take advantage of many other money-related conveniences. It is possible to live without good credit, but having a bad credit rating can affect you negatively for the rest of your life.

You might be surprised to know that only a handful of credit bureaus in North America hold the key to your credit rating, and therefore your financial future. These credit bureaus receive the positive and negative reports issued by your creditors and create your personal credit report and credit score based on the results. If your credit history is poor, it is important to repair your credit so that you don’t get turned down for a mortgage or even a department store credit card. In order to do this, you must first learn how to deal effectively with a credit bureau.

Begin by finding out what credit bureau has your file. This information will be on any rejection letters you may have from a declined credit application. Next, you’ll need to obtain a copy of your credit history. Remember that you are allowed, by law, to obtain a copy of your credit history if you’ve been denied credit, though some organizations might imply otherwise. You should only pay for a credit report if you want an instant copy, rather than to have one mailed to you, in which case a bureau will send you one for a fee.

It is important to remember that a credit bureau is in the business of collection and selling information. This means that you should never provide them with any information that you are not required to by law, unless you want them to use it against you. It is legally necessary for you to provide the following to get a copy of your credit report:

1. Name
2. Social Security Number
3. Legal Address

The credit bureau might request copies of your social security card or your driver’s license. If they ask for a copy of your driver’s license as proof of address, it’s best to provide them with a copy of a bill or something else addressed to you instead. You should be careful when providing credit bureaus information, because most own collection agencies and they will use any of the information that you provide to hassle you with the credit and collection issues that you are already trying to fix.

Examine your report closely and note any possible errors. If you have questions about a specific debt, you can mail a written request to the credit bureau that they investigate that particular debt. Legally, the credit bureau is required to document any discrepancies on your credit report, otherwise, if they don’t do this in 30 days, the entire item must be removed. Most of the credit repair companies out there will charge you fees to perform this service, but you can do it yourself for free with just a little bit of time and effort.

Learning to deal with credit bureaus will allow you to engage in successful credit repair without paying a credit repair company a high fee. When you educate yourself in what the legal obligations are that credit bureaus entail, in many cases, you can effectively repair your own credit just as quickly as a credit repair company.

How To Contact Creditors To Help With Credit Repair

Good credit has become nearly a necessity these days. Credit has become almost essential to buying a car or a home (unless you have large amounts of cash lying around) and with the advent of online buying, it's generally difficult to operate without some kind of credit card. Unfortunately, credit does cause problems for some people. Minimum payments on credit cards can be missed, or a loan could go into default and your credit rating will begin to slide. When you have negative activity, the creditor reports it a credit reporting agency, who then records it on your credit history. A tarnished credit report can be tough to clean up, as most negative items will remain stay on your report for seven years before they expire and are removed.

If you have bad credit history, you'll end up dealing with previously unknown problems. You can’t rent a car or buy things online, renting property will be difficult, and getting a mortgage may be impossible. It's important to repair your credit as soon as you notice a problem because you’d be surprised at what kind of credit repair you can accomplish by being proactive.

The first thing you should do if you fall behind in your loan payments is contact your creditor. This can be scary and many people take the opposite approach, avoiding "collection calls" out of embarrassment or even fear. Unfortunately, it’s best to deal with the problem immediately and to avoid long-term credit difficulties. Contact your creditor right away – as soon as you find you are having trouble with a debt.

Remember the solution to your credit repair process starts with your credit report, and what is on your report is what your creditor reports about you. By contacting your creditor, you may be able to discuss possible payment plans or alternative solutions. It is in the creditor's best interests to work with you, as if you go into default, they might never get payment.

There are many reasons that you should contact your creditor immediately, but most of all, it helps to speed up the credit repair process. Once you’ve contacted your creditor, suggest a payment system that works for both for you. Be sure to propose a payment plan that is realistic for you, and stick to it. Defaulting on these payments will look to the creditor as if you were just trying to stall and avoid further payment.

When you contact your creditor about your outstanding debt, be sure to remember that it is in your best interest to convince your creditor not to report your non-payment to the credit report agency. By facing up to your payment problems, contacting your creditor right away, and creating a payment system that will work for both of you, you are taking a very effective step credit repairing your credit.

Home Owners: Avoid Complications In Credit Repair

Avoiding complications in credit repair is almost important as getting out of debt.

When we have bills that were neglected simply because we didnТt have the money to pay the bills, or else we purchased items instead of paying the bills, we are in debt.

If you are considering a Home Equity Loan to get out of your current mortgageЕDON┤T!

Why? Simply because most Home Equity Loans get you deeper in debt and once you are obligated you will find the problem is more complicated than we you applied for the loan.

Lenders often target home owners with financial difficulties offering them high interest rates and making them believe it is a solution for debt relief. In most cases, this is where foreclosures come in, or selling homes come into place. The solution is only an option to get you in debt deeper. One solution then is for homeowners to consider the Reverse Mortgage Loans.

This type of loan is often as equity against your home, belongings, and so on. The loan offers a Сcash advanceТ solution and requires that the owner does not pay on the mortgage until the end of the mortgage term or when the home is sold.

Most lenders provide a lump sum advance, a line of credit, or else a monthly installment to the home owners. Some lenders even offer a combination to the homeowners. This is certainly a good solution for repairing your credit, and building your credit to a new future.

The downside is that Reverse Home Mortgage Loans often are more suitable for the older generation of people that have built equity over the years in their homes. Another disadvantage is that almost all home loans require upfront payments, such as title, insurance, application fees, origination fees, interest and so on.

Therefore, it pays to ask questions and shop around before taking out another loan to repair or build your credit. Fannie Mae Home Keeper Mortgage Programs are one of the many that offer a Reverse Home Mortgage Loan.

Another option for paying off your debts and repairing your credit is to borrow the money from family members or friends.

If you have someone that trusts you enough to loan you the money to get out of debt, it is often better than getting a loan. There are several options or questions you must consider before asking family members or friends to loan you the money to build or repair your credit.

One of those questions should be the obvious. Can these people afford to lend me the money to get out of debt? Are these people kind enough to loan you money without putting high demands on you. Of course there may be interest involved, but remember they are loaning you money they could be spending on their own bills.

Is it possible that you can repay the loan without complicating your situation further? Can I repay these people that loan me the money to free myself of one debt? How long do I have to repay the loan? Make sure there are no extra complications before asking friends or family for money to help get you out of debt.

One of the best solutions for finding a way to repair your credit is searching the options to make the money yourself. If you have a mortgage payment and struggling each month to make ends meet, you might want to sell your home. Many homeowners go for this option simply because they make more money in the long run.

Once they sell their home they are often able to repay their mortgage loan and then take out a loan for another mortgage more affordable. If you decide to sell your home to repair your credit and get out of debt, be sure that you look around for the best possible solutions in order to prevent further complications.

Make sure you know how much is owed on your home before you set a price for resell. If there are any repairs that are minor or major, try to repair them first before selling. If you canТt afford to repair the home, try to do minimal repair so that you can up the price of the home you are selling.