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Repair Your Bad Credit
Credit is more than just a plastic card used to buy things. It's your financial trustworthiness. Good credit means that your history of payments, employment and salary make you a good candidate for a loan, and creditors (those who lend money or services) will be more willing to work with you. Having good credit usually translates into lower payments and more ease in borrowing money. Bad credit, however, can be a big problem. It usually results from making payments late or borrowing too much money, and it means that you might have trouble getting a car loan, a credit card, a place to live and, sometimes, a job. People who are just starting out might find it hard to get a loan or a credit card. That's because having no credit history makes it difficult for lenders to know if you're a good risk to repay a loan and make your payments on time. Establishing a good credit history is not as difficult as it seems. In all cases, however, you'll need to make payments on time. Some tips include: 1) Apply for a credit card through a local store. Local stores are more likely to extend credit to people without an established credit history. 2) Apply for a secured credit card. By borrowing against your own money, creditors find this to be far less risky. 3) Ask someone with a good credit history to co-sign on a loan or a credit card application. By co-signing, the person is agreeing to pay back the loan if you don't. By you making the payments each month, you will build a good credit history for yourself. Also beware of companies or services that promise they can fix credit reports quickly. They can be fraudulent and expensive. Getting out of debt will take time, patience, and sacrifice. Credit Counseling Many universities, military bases, credit unions and housing authorities operate nonprofit financial counseling programs. Some charge a fee for their services. Creditors may be willing to accept reduced payments if you are working with a reputable program to create a debt repayment plan. Bad Credit Problems If you have bad credit problems, still shop, compare, and negotiate. Don't assume that minor credit problems or difficulties stemming from unique circumstances, such as illness or temporary loss of income, will limit your loan choices to only high cost lenders. If your credit report contains negative information that is accurate, but there are good reasons for trusting you to repay a loan, be sure to explain your situation to the lender or broker. If your credit problems cannot be explained, you will probably have to pay more than borrowers who have good credit histories. But don't assume that the only way to get credit is to pay a high price. Ask how your past credit history affects the price of your loan and what you would need to do to get a better price. Take the time to shop around and negotiate the best deal that you can. Whether you have credit problems or not, it's a good idea to review your credit report for accuracy and completeness before you apply for a loan. Your Access to a Free Credit Report There are three major nationwide Consumer Reporting Agencies (CRAs): Equifax P.O. Box 740241 Atlanta, GA 30374-0241 Telephone: 1-800-685-1111 Web site: www.equifax.com Experian P.O. Box 2104 Allen, TX 75013 Telephone: 1-888-397-3742 Web site: www.experian.com TransUnion P.O. Box 1000 Chester, PA 19022 Telephone: 1-800-888-4213 Web site: www.transunion.com For more information visit www.ftc.gov/bcp/conline/pubs/credit/repair.htm |
Federal Laws Organizations Fannie MaeFreddie Mac Ginnie Mae Nellie Mae Sallie Mae Consumer Info Credit BureauCredit Report Directory of Federal Agencies Federal Trade Commission (FTC) Identity Theft Predatory Lending Repair Your Bad Credit Truth in Lending Act Borrowers Beware Copyright & Miscellaneous Private Mortgage Insurance (PMI)Prepayment Penalty |
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