Good News - Bad News On Using A Credit Repair Firm
- Date: 2006-11-28 - Word Count: 810
Share This!
If you do a search on the term credit repair in Google, the first website that comes up in the natural listings is the Federal Trade Commission. And the first thing they discuss is that people should really do their own credit repair work.
The reason why? Because of all the scam artists out there that profess to be an expert on credit repair and take advantage of many unsuspecting consumers. And they use every trick in the book to misrepresent the services they provide. The worst part of it (other than losing your hard earned money) is that they can actually do more damage to your credit score.
There are a lot of very good and honest organizations that can help you repair your credit score. Such as local civic organizations, churches, and legitimate non-profit agencies that will guide you through the maze. Our credit system has a lot of zigs and zags and it can be confusing to someone not familiar with the terms and laws that govern the industry.
And it does require some diligent effort on the consumer's part. And these days there are way too many companies that grant credit just to make a sale and ignore the fact that the consumer may be soon overwhelmed by the debt. So it's a lot easier to get into trouble than get out.
Why is good credit so important? Because your credit score (and other considerations) will determine the interest rate you are charged for any loans. It can mean the difference in 3+ interest points (on a new car the good credit rate is around 8% so if you have a low score that could mean up to 12%).
Insurance companies and employers are even starting to use credit score to determine rates and job offers. If you have a low score even car insurance can cost more. And you may not get that great job offer either.
Credit repair companies that make unrealistic claims, ones that are too good to be true, often are just taking advantage of the general lack of knowledge of most consumers. It got so bad a few years ago that congress passed an updated bill to help control the madness. Not that I'm in favor of too much government but in this case they did help the consumer.
Anyone who gives you a 100% guarantee to eliminate bad credit, remove a bankruptcy, liens, and judgements are not being honest. Any company that offers to make you a new credit file, give you a new identity, or asks you to apply for a new social security number is not doing you any favor and can land you in jail.
The good news is that you can improve your credit score, and in most cases sooner than you think. And all you have to do to start is learn a little bit about the credit system and how it works. Making the decision to start is the first step.
In order to get an accurate appraisal of your current credit score, you have the right to request a free credit report from each of the three credit bureaus (Equifax, Experian, and TransUnion) each year. You can find out how by going to www.ftc.gov/credit or call 1-877-322-8228 and ask for information.
The next thing to do is take an accurate look at what you owe, current status of payments, and what income you have to work with. Once you have a good picture of the current debts, make a realistic monthly budget. Getting the facts straight help you come up with a good plan.
The Federal Trade Commission website above has very easy to understand instructions on how to address incorrect information, how to contact the credit bureaus, and what can be challenged on your credit report. Take you time and read over the material.
You may well have incorrect information on your credit report that can be removed. You can also contact creditors to work out a viable payment plan and arrangements to get you back in good standing. Most companies are more than willing to work with you.
One word of caution though, if you are dealing with a collection agency, be careful. Most collection companies work on a percentage basis, and if you don't keep an open eye on them they can take advantage of you. To get the real scoop on what they can and can not do go to this website of the Federal Trade Commission: http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm
Depending on the individual situation, most consumers can improve upon their credit score in as short as 30-60 days. I've seen people get back in the high 600s or low 700s in 12-15 months which is very good. Since your credit score can dictate the interest rate on any large purchase, I would wait until I have a good score (it can mean 1000's of dollars over the period of the loan or purchase agreement).
The reason why? Because of all the scam artists out there that profess to be an expert on credit repair and take advantage of many unsuspecting consumers. And they use every trick in the book to misrepresent the services they provide. The worst part of it (other than losing your hard earned money) is that they can actually do more damage to your credit score.
There are a lot of very good and honest organizations that can help you repair your credit score. Such as local civic organizations, churches, and legitimate non-profit agencies that will guide you through the maze. Our credit system has a lot of zigs and zags and it can be confusing to someone not familiar with the terms and laws that govern the industry.
And it does require some diligent effort on the consumer's part. And these days there are way too many companies that grant credit just to make a sale and ignore the fact that the consumer may be soon overwhelmed by the debt. So it's a lot easier to get into trouble than get out.
Why is good credit so important? Because your credit score (and other considerations) will determine the interest rate you are charged for any loans. It can mean the difference in 3+ interest points (on a new car the good credit rate is around 8% so if you have a low score that could mean up to 12%).
Insurance companies and employers are even starting to use credit score to determine rates and job offers. If you have a low score even car insurance can cost more. And you may not get that great job offer either.
Credit repair companies that make unrealistic claims, ones that are too good to be true, often are just taking advantage of the general lack of knowledge of most consumers. It got so bad a few years ago that congress passed an updated bill to help control the madness. Not that I'm in favor of too much government but in this case they did help the consumer.
Anyone who gives you a 100% guarantee to eliminate bad credit, remove a bankruptcy, liens, and judgements are not being honest. Any company that offers to make you a new credit file, give you a new identity, or asks you to apply for a new social security number is not doing you any favor and can land you in jail.
The good news is that you can improve your credit score, and in most cases sooner than you think. And all you have to do to start is learn a little bit about the credit system and how it works. Making the decision to start is the first step.
In order to get an accurate appraisal of your current credit score, you have the right to request a free credit report from each of the three credit bureaus (Equifax, Experian, and TransUnion) each year. You can find out how by going to www.ftc.gov/credit or call 1-877-322-8228 and ask for information.
The next thing to do is take an accurate look at what you owe, current status of payments, and what income you have to work with. Once you have a good picture of the current debts, make a realistic monthly budget. Getting the facts straight help you come up with a good plan.
The Federal Trade Commission website above has very easy to understand instructions on how to address incorrect information, how to contact the credit bureaus, and what can be challenged on your credit report. Take you time and read over the material.
You may well have incorrect information on your credit report that can be removed. You can also contact creditors to work out a viable payment plan and arrangements to get you back in good standing. Most companies are more than willing to work with you.
One word of caution though, if you are dealing with a collection agency, be careful. Most collection companies work on a percentage basis, and if you don't keep an open eye on them they can take advantage of you. To get the real scoop on what they can and can not do go to this website of the Federal Trade Commission: http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm
Depending on the individual situation, most consumers can improve upon their credit score in as short as 30-60 days. I've seen people get back in the high 600s or low 700s in 12-15 months which is very good. Since your credit score can dictate the interest rate on any large purchase, I would wait until I have a good score (it can mean 1000's of dollars over the period of the loan or purchase agreement).
Related Tags: credit repair, credit score
Get The Best Self Help Credit Repair Advice On The Internet. For Free. Learn how to get Free Credit Reports and raise your Credit Score in 30 Days. Click here For Free Credit Repair Information
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- The Resurgence of Fred Perry Clothing
Summer might long be over and Wimbledon may be a distant memory, however the fashion is a year round - Uncovering Men's Tank Tops
I don't know a thing about you, but I'll bet that you have worn a tank top. Tank tops have also been - Make Use of Silk Scarves to Take Good Care of Your Skin
In the event you are new about silk scarves, you could never read about this particular feature of s - Just For Men Scarves - the Preference For Guys in the Vogue Domain
If you are not certain what style of present you could provide for men, maybe you can consider men s - Think Black Friday Shopping is Beyond Your Budget?
Moms who are juggling the bills and still trying to provide the perfect holiday gift to loved ones a - How to Make Conscious Shopping Choices
Many people have heard the phrase "voting with your dollars" and they understand that it means your - Silk Scarves - Unique Present Approach in Xmas Seasons
The most prevalent silk add-on is scarves, and many focus is presented on inspired designing on thes - Benefits of an Aloe Vera Shampoo
A lot of people are not aware of the specific benefits that using an aloe vera shampoo can do to the - How Effective is the Power of Your Subconscious Mind?
Most people are bombarded with this thought whenever they feel weak and wish to affect certain chang - Silk Scarf - the Record For Human Being in the Style History
Throughout the 19th and 20th centuries the worldwide recognition of silk scarves developed dramatica
Most viewed articles in this category:
- Surf and Turf: the Race Track
Surf and Turf: The Race TrackOne of the favorite places for The G to hang out at, especially in Summ - Are You Looking For Cholesterol Drugs Without Side Effect?
High cholesterol level is probably one of the widely spread complication among Americans. Almost for - Friday the 13th could be a lucky day?
Friday the 13th sounds unlucky ? Traditional superstition ? And a lot of people dislike it and beli - Don't Judge A Man
Our world is full of bad tongues, fault-finders, gossipers, mockers, and insulters but do these grou - When Personalized Gifts Make a Difference
Finding the right gifts for a particular occasion is always a challenging task. Sometimes it is nic - Managing My Resistance: Learning To Flow With What Life Offers
One of the things that interests me most about conflict is the tendency to resist it and the ways in - What Are Horoscopes Based On?
If you do not know much about astrology, you may wonder what are horoscopes based on and how astrolo - 7 Dumbest Relationship Mistakes Smart People Make
We often find ourselves amid the wreckage of a love gone wrong, wringing our hands and asking, "Why - Motivation as the heart of self improvement
You should be able to find several indispensable facts about Motivation in the following paragraphs - Is Complete Abstinence from Use of Paychoactive Substances Necessary for Recovery?
Can a sober alcoholic in recovery who has no history of abuse of marijuana, use marijuana without