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Tuesday, December 29, 2020

How To Repair Bad Credit

The only sure fire cure for a bad credit report is time. Time is your greatest ally when it comes to repairing bad credit. It can take up to 21 years to remove a bankruptcy from your report provided all payments have been made on time. If you have been late with payments on your mortgage, car loan, or other loan, good old time creditors can and will report your delinquency in your credit report. If you miss payments or make payments late on a credit card, credit card companies can and will report this too.

It can take seven years to remove a Chapter 7 bankruptcy from a credit report whereas it might only take three to four years to remove a Chapter 13 bankruptcy. Other things that might slow down the bankruptcy process is if you get fired from a job, have a divorce, or are unable to find a job. If you file for bankruptcy and are unable to get a job, this can also affect your ability to use a bankruptcy to buy a home.


Freeze Your Credit

Having credit that is "frozen" or closed requires no action on your part. Each time you buy on a credit card or open an account, this allows the card issuer to place a hold on your account for up to 90 days. That means they will not let you open new accounts unless you can prove necessary expenses. Once it is "frozen" it is usually at least six months before this type of credit report can be unfrozen again. This gives plenty of time for any delinquent accounts to be paid. This time is much less than if approval for a new card is contingent on the fact that the applicant can prove needed expenses.


Closing Your Credit Card

If a credit card is closed, when this occurs the account is closed. The card company cannot allow you to open another credit card for up to five years or place restrictions on administering a new credit card account. When this happens, the cardholder must call the closed card company and request that the closed card company restores the credit card. Some companies will do this, but some will not. The requirement is typically for the cardholder to have a new account opened and that the cardholder prove their need for the credit after the card was closed. For example, if a young student needed access to a credit card to fund a computer project, the issuing company might agree to this. Credit card companies do not want to limit their clients' ability to borrow.


Don't Be Late

This problem occurs after lenders closed your account. It is actually a good thing. These statements are true, but less so. A credit report lists most late bill payments and if the said loans were late by 30 days or more, the report will list them. A credit card which is "closed due to non-payment" doesn't help much. You still owe the debt, and if you can't pay it, it will be reported as a late payment. If the account was seriously delinquent, you might be faced with a lawsuit. In this case, the lenders will be more likely to obtain a judgment. Sometimes they will execute a sheriff's sale and have you arrested. The problem with a judgment is that all of your wages during the duration of the lawsuit are garnished. Ask the lender if they can fix it immediately, or close the account and do so only if you can prove useful to them as an account customer. By this time, even a credit worthy co-borrower can be denied credit if they show up on your credit report.

If you want to close the account, request the lender to list all outstanding obligations and their respective balances. From this, you can easily decide which card should be closed. Credit ratings and scores are not as pertinent to a credit line as being able to pay the bills in a timely manner is. Be sure to contact the lender and caused a hardship that will prevent you from making payments on the debt. This would be a good reason to set up automatic payments. If you become unemployed or are unable to work, request a forbearance agreement so your credit history will not be damaged.

The easiest is to simply pay your bills, but that is not always a viable option. Many people look for a way to find extra money to pay more than the minimum payment required. As long as the minimum payment is not adversely affecting your credit score, it is financially citizens' punishment to happen. What you can do is max outsource debt, including your bills.

People are generally apprehensive about doing this, but it hardly cost anything and is relatively easy to accomplish.

What To Know About Credit Reports

What is a Credit Report?

Credit reports are referred to as "reimbursement reports" or "credit history" or "credit reputation". In some cases, it can also be called a "Consumer Report".

Your credit history is used for many purposes:

The credit report is a history of all of your credit-buying and spending behaviors. It will show you were you spend your money, pay off your former loans and open new loans. It will show how much you have been charged on all of your old loans and deposited in your checking and savings accounts. It will also show your credit limits on loans, whether or not you used the full loan amount, and if the account was paid on time. The report will also show credit card companies, stores and other companies who have reviewed your report to check on your creditworthiness before and after you opened/cashed your account.

Could you be penalized for paying off your credit card?

There are several reasons you could be penalized for paying off your credit card. If you have credit card debt, it becomes a part of your credit history. If you pay off a credit card, it is no longer included in your credit history. Paying off a credit card brings your debt to zero. If you decide to include your credit card balance in a consolidation loan, then the balance on your card is brought to zero and will not change even if you use the consolidation loan to pay off your debts. If you never use your credit card again, then the credit line could stay the same. It is important that you make your payments on time. If you miss a payment or are a few days late and are still penalized, decide to include your payment as part of the loan so that the balance if you decide to do it yourselves.

What is negative information on my credit report?

Any information that is negative is listed on your credit report. These may include late payments and some balances. Large balances may be listed for a chunk of time each month. If you have certain negative accounts, you may not be able to get additional credit for several years. An aim to improve your credit score is generally accepted if you are at least making the minimum required payment on your accounts. If you are late on any bill, you will receive a letter from the creditor and it will include information on the late payment. It will also include the amount of the late payment and a brief explanation of the late payments. If there are other reasons for late payments, a brief explanation for each may be included. Such explanations are as follows, overdue payment: you were thirty days or more overdue on your accounts. Overdue test is 30 to 60 days overdue on your account and your accounts have not been paid as of the may be due. Most creditors have the ability to give you sixty days grace. You may still be able to obtain credit while you take your financial plan and do your obligation for 6 months. If you need credit during the grace period, many creditors will accept it. This is a very common situation. However, if you pay late over the years you will most likely receive a credit report. If this occurs, it will most likely not cause you further credit problems until you decide to make another late payment.

Monday, December 28, 2020

How The Scoring System Affects Your Life

 

Your credit score is a three digit number between 300 and 850 as a reflection of you and your financial dependability. Credit scores range from 350-800, with the later being the worst. The higher your number, the more likely you are to pay your bills on time, not taking advantage of every opportunity to borrow money, have credit, or receive credit from other sources. exclusively situations such as bankruptcy or tax liens. On the other hand, with a low number, you may prefer them to home loans, vehicle loans, or any other credit. lowest established ones are mostly existent because the credit bureaus do not have enough information to rate people effectively enough. When your credit is good to excellent, you usually receive many credit card offers. One of those credit offers will be accepted.


Understanding Your Credit Score

It sounds simple, but how do you know where you stand with your credit? This score puts you into the appropriate range of what lenders, banks, or credit card companies consider to be risk for default. Knowing whether your credit score is good or not usually involves checking in with a credit score reporting agency (CRA.) The CRA gathers information about your financial history and creates a score. This score is a tool used by these companies to determine how much of a credit risk you will be. Obviously, the higher the risk, the less chances of getting credit. Consumers usually have a fairly good idea of how they generally stand as a credit risk, anyway. Thus, checking them is a good way to see if you can boost your credit score.

If your score is low, don't worry. By using common sense, following a budget, and working on paying of your debt, you should be able to boost your score. Of course, having a budget will help too. It's crucial to your financial success. It's like a roadmap to your financial destination. As the score gets worse, the more likely you will miss out on important things such as better loans with good terms or lower interest rates. When this does happen, it's important to know about and cope with how it's affecting you before it gets out of hand, and then it becomes a hopeless situation. Finally, you must acknowledge that it is not the credit that's bad, it's your debt, and you can get back on track by paying off your debts.

Credit scores affect transactions from loans to employment. Credit utilization rate is calculated as a ratio (utilization rate/credit limit) which is a tool in a computer to give you a number that is a percentage of your credit limit taken by you. The credit utilization rate is looked at to find the average and not just the individual account that you happen to open and on how many times you used that credit for others. This causes a higher utilization which shouldn't occur and therefore an increase on your credit score.

There are several factors that affect your credit score, but the most important for you to understand is this one: The credit score keeps track of the impact of your past credit behavior. The longer your credit history, the higher score you get. The more recent your credit history, the higher score it gets. The score is affected negatively when your accounts go into delinquency or are unused for a long period of time. Credit cards especially will affect your credit score the most. The more you use your cards, the lower your score.

On the other hand, making small payments to creditors, your score goes down. Finally your utilization rate is 100%. That means that if you have a credit limit of $10,000 on your credit card and you made a $2,000 payment the previous month and now you have a $10,000 credit limit, you have made $2,000 worth of consumption.

How To Fix Credit Report Errors

 

The law allows you to obtain a free copy of credit report from the lenders three major credit reporting agencies: Experian, Equifax and Trans Union. Before you request a credit report, there are a number of things that must be in order. As a credit consumer, you have the right to complain about what's in your credit report and there are a number of ways that you can order a copy of it.

You are entitled to get a copy of your credit report, under the following conditions: you have been denied credit because of the content of your report; you believe your report is inaccurate because of fraud; or you want to make sure the information matters so that the person attempting to extend credit to you sees it the right way. When you request your report, there may be a charge involved, but the charge is usually less than $10.

When you get your report, take an honest look at it. It may not be a problem if your credit is good or bad, but for those with bad credit, they can find many errors on their credit report. You should examine your report and figure out if there are any errors. If there are, you should have them checked out simply because the errors might or may not be down to you. One possibility is that the debt you're trying to pay may not be showing. Another possibility is that you may have been able to pay your bills, but the amounts may not show that you have actually paid the bill. Some credit cards and loan companies notify credit bureaus if payments are made late so, if you're three months behind on your car loan, they can raise your rate because of the delay in payments. If the report is correct, when you correct your report, there shouldn't be any problems. If your credit is bad enough that you don't qualify for credit card or loan companies to extend credit to you, there are solutions. You can get a secured credit card and pay the money back as soon as you can, or you can get a loan from a bank or a lender that reports to all three credit bureaus so that you can begin to improve your credit. You should get several smaller credit accounts reporting on your credit report if you can. This is necessary for as long as you carry over your receivables, and it shows that you are making payments so you can get a regular credit card in the future. If you your credit is poor, some banks will avoid you and lend you money or close your accounts. These banks will report your credit to the bureaus, but it is up to you to obtain the credit and make the payments. If you could get a credit card, loan, or charge account and make the payments on time, you would be a much better credit risk. All lenders want to make sure they are going to get their money back, so you can apply for as many credit cards, loans, or charge accounts as you want. In the end, though, your credit report may be marred by non payments and late payments, but that is not the point of the credit report. If you pay everything on time, your credit report should improve over time.  An important factor in getting credit is the income the prospective spouse earns, and also the income of both spouses. If the prospective spouse earns more than the average family in their income bracket, there may be some problems. This is approximately 80% of the income to apply for most credit. For purposes of this guide, we're only discussing the income that a young couple may bring in together if both the prospectives work.

How to Deal with Credit Score

A credit score is a numerical performance that is a measurement of your credit worthiness. It makes up part of your credit report and credit rating that creditors and lenders look at before extending credit to you. Your credit report contains detailed information about your financial history. It contains information about you. It contains who you owe and what you owe. It contains information about your employment and any public records that may affect your credit history. It includes details about your driving history and whether you have ever been the victim of identity theft. Credit lenders use this information to determine if a customer will be a credit risk to them. What is in your credit report is a concise picture of your credit history. With that information, they can come up with a credit score or credit rating for you.

 

Read the Fair Credit Reporting Act and contact both the consumer reporting agencies and the business that provided the information. You have the right that the information on your credit report is accurate and should not cause you any harm. Consumer reporting agencies must correct inaccurate and incomplete information in your credit report. They are required by law to do so if you dispute the information. Because of this, it is to the consumer's interest that the agencies verify an account as soon as they receive your request. If they cannot or do not, they must change the information to what you request. Write your dispute letter and send it to the agency. Make sure you send it return receipt requested so you will have documentation that they received it. By law, they must investigate the dispute within 30 days. If the agency finds that the information was not verified then they must remove it from your report. They do this by contacting the creditor and request that the information be removed. If the creditor does not respond within a reasonable period of time then the disputed account must be deleted. This is an important part of the process.  If you do not receive a reply within the 30 days then the bad credit information must be removed from your report.

If you are working on improving your credit and you want to add a credit item that would affect your credit score then you can add a statement of this type to your credit report.This will indicate that you disputes the information as being false and or they may take steps to verify it. Close any accounts that don't have a balance and which are less than half of your credit limit. If you have a credit card with a $50,000 spending limit and you have only a $10,000 balance on the card then you are using 90% of your spending and therefore have a higher debt to credit ratio. Also, make sure that your credit limits are well within your financial ability. Overwriting your credit limits may lower your credit score. Limit the amount of information in your credit file. Do not have credit cards or other easy access to funds.  Do not apply for more credit than you can comfortably handle. 

 

Keeping a good credit score is a simple thing.  But you can't do it without being proactive.

Tuesday, December 22, 2020

Advantages of Having a Good Business Credit Rating


A business credit report provides basic information to help businesses run efficiently. Credit risk management is a program offered by many serious credit report companies that will help make sure a business doesn't suffer financial ruin if a potential customer defaults on its accounts. 

Obtaining credit can help an entrepreneur secure an independent identity. By getting a business credit report before exclusive agreement with a customer, an entrepreneur can use credit reports as a guide to establishing business credit lines to be used for the company's own unique purposes. If a company is experiencing financial difficulties or requires an immediate expansion of its operations, it can also use a business credit report as a way to secure enough money in advance to help prevent bankruptcy. It is when a business has encountered major financial problems and needs to expand or improve its operations that companies begin leasing more cash to keep their businesses running smoothly. By getting a business credit report early on, a business can make sure it will have the credit rating it needs to effectively operate in the future. In addition to that, business credit reports can help a business determine the amount of debt or credit it can obtain for a new account.

A business' credit rating can qualify or disqualify a firm from a number of accounts, such as accounts receivable, accounts payable, and accounts payable. In addition to that, within a 30 day period, a business credit report can show information related to new accounts and who has recently opened the accounts. When a business decides to secure a bank loan, the bank or lending institution will need a basic business credit report to help verify your particular business is a good credit risk. A business credit report is necessary when applying for a bank loan, and if your business credit report shows a poor history of payment, it could cause your application to be denied. If a company needs to secure a line of credit or advance funds, a business credit report will help a business to determine in advance whether lenders will grant the loan or account.

Since business credit reports are so important, a business has to determine how important it is to them. If a business has just began a new endeavor and maintain a poor credit score, the business would be fired from the responsibility of a line of credit, and possibly having to pay back a business credit report fee. A business needs to acquire a business credit report and find out if a loan or line of credit is feasible before it achieves financial stability. Lenders may consider extending a line of credit to a business that has a poor credit score, but the interest rates and limits may be rather high.

Monday, December 21, 2020

7 Tips For Credit Repair


If you're reading this article, then you likely have a copy of your credit report. If so, remember that we recommend that you obtain a copy of your credit report at least once a year. We recommend that you check your credit report at least every six months since errors are common and be prepared to take further action, if necessary.

Below are a number of tips that can help you repair your credit if there is an error reported on the report. It's important to repair errors as soon as possible so that your credit rating can be seen as a positive, and thus worthy, factor in every loan you apply for.


  • Check the report for inaccuracies. If you find information that doesn't fit your life, such as accounts you didn't open, balance information that is incorrect, or payments you never received, check your credit report for inaccuracies. Report errors by contacting the responsible credit reporting agency immediately.
  • Always pay under the minimum due when it becomes due. It's always a good idea to pay your bills so that you don’t become late, but it can be a good idea to pay larger debts so that your payments will be posted to your credit report promptly and on time.
  • Use a secured credit card. When you request your credit card, you will also gain a credit card number, and, shortly afterward, you will begin to see a small but constant line of available credit on your account.
  • Begin re-establishing credit by requesting a small loan from your credit union or banker. If you use the card responsibly over a two-year period, you will regain the ability to qualify for larger loans.
  • Request small loans start with debt consolidation. Home equity loans can come in handy when you are ready to make a large purchase like a car, and you may be eligible for tax credits against the interest you pay on your home equity loan.
  • Ask your employer if there is a no-credit check clause in your employment contract. When you are working for someone for a particular employer, they may not check your credit unless you are fired first for unpaid credit. This also protects you from identity theft if you have accounts under your name, and while a valid credit report often identifies you, it may not always do so for Federal and State taxes.
  • Have a relative or friend add you to their credit card account. Though it is not really advisable, it is always a good idea to add someone to an account as an authorized or joint user if they maintain a good repayment history. Generally, however, only income has to be present on the account and it must be current. Everybody has participated in something that has gone on a "charge" date from an authorized party. Once you can establish credit to a fair extent, you will further improve your odds of obtaining credit. If a friend or relative cannot help you this way, a secured credit card can get you started. As your credit rating improves, you will be able to open more accounts or voluntarily make larger parameters of your credit limit.
By practicing a measure such as the above, you can easily develop and maintain a good credit report. With a sound financial plan, and by being an conscientious and considerate person, there is nothing that you cannot accomplish.