Tackling Bad Credit With The Fair Credit Reporting Act

What is Bad Credit?

Bad credit is when your credit report score or the ‘FICO report’ score is below par. If you have bad credit, you will have to put up with high interest rates, and may not be eligible for personal loans and mortgages. In addition to this, you may have to face penalties as well.

What is the Fair Credit Reporting Act?

It is a federal act that promotes accurate information and the consumers’ right to keep their information private. It is primarily concerned with consumer reporting agencies such as financial bureaus.

How can this act benefit people with a bad credit score?

Every American citizen is entitled to certain rights under this act.
First of all, you have the right to know if any information in your credit report has been used against you. So, if your loan or mortgage application is rejected because of a low credit score, you will be alerted to take appropriate action.

Secondly, you have the right to know what is in your report. This can help you in two ways. First, you would be able to spot the cause behind your low credit score and work on those areas. If you have too much current debt, too many accounts or pending debts, you can focus on those issues. Second, you will also have a chance to dispute a creditor or a financial bureau regarding any false errors on your list.

A significant percentage (20%) of credit reports is said to be faulty. So, there is a good chance your score is as less as it is because of inaccurate reporting or false charges.

Credit Restoration services are your best bet when you are trying to get your credit score up. The experts of such companies have the competency to spot every error on your report and dispute with a creditor or one of the three financial bureaus, which are:

Equifax

Experian

TransUnion

The reason you should take professional help is because they fully understand the extent of your rights. For example, you may not be able to distinguish an outdated piece of information on your report, which as per the act, you have the right to get removed.

A reputed credit services company handles such cases on a daily basis so they know how to dispute with creditors and bureaus. If the entries on the credit report prove to be inaccurate, the credit repair company will get them removed.

The Personal Credit Maze

The Personal Credit Maze

It’s too often in life that we find ourselves not paying attention to the details. I personally have been in that same situation many times in life. All you can do is learn from your mistakes right? I realized paying attention to the so-called little things can have enormous impacts on our lives.

Let me start with this analogy. If you were summons to court with no documentation would you go? Does that make you guilty if you don’t show? Are you left liable for anything down the road? Much like this situation the Personal Credit Bureaus report information on consumers that may or may NOT be correct. Along the line of the being sued with no paperwork scenario, the credit bureaus have no actual proof showing the consumer actually to have that information reported on their credit profile. This can be stopped there is a way to leave all that bad reporting in the rearview mirror.

I have a quick story to share, this involves a friend of mine. Before he entered into the program he decided he could find his way through the credit maze himself. He thought “I don’t need anyone to help me do it”. Wow was he wrong. What happen was he pulled his reports and noticed that he had some items reporting that didn’t belong to him. At that time in his life he was building new credit so he didn’t have any other open lines except the information reporting that was incorrect! He went ahead and filed a dispute after many hours of trial and error trying to get that far. After a few weeks and tireless hours which he didn’t have to spare) the credit bureaus removed the positive reporting incorrect information and well his score dropped 14 pts. Not a huge drop but not understanding the credit maze I learned the hard way what can and can’t affect your score.

Let’s talk about the 5 things that make up your credit score:

1) Payment History – 35% of your total credit score is based on payment history. Repayment of past debt is one of the leading factors that create your credit score.

2) Credit Utilization – 30% of your credit score is based on the percentage of available credit the individual has borrowed.

3) Length of Credit History – 15% of your credit score is based on 2 key things: the length of time each account has been open and the length of time it’s been since it last been utilized.

4) New Credit – 5% of your credit score goes into how much new credit you have. Applying for too much credit can flag you and make you look financially unstable to lenders. Only if you can see if fit financially or when it makes sense should you apply for new credit.* Remember inquires whether denied or approved still leave a lasting mark on your personal credit score*.

5) Mix of Credit – 5% of your credit score goes into you mix of credit. Experts say that by making on time payments with different vendors shows lenders you’re simply less of a risk. Once again Good behavior Gets Rewarded.

Learn how you can obtain the profile you need to go up against lenders and get the answer you deserve. Learn how to fight back and understand what it is you need to do to stay on track and maintain. We understand each situation is uniquely different! Start to make the change today.

When Was the Last Time You Monitored Your Credit Report?

If every major financial activity of yours is summarized into a single piece of paper, it will turn out to be a very important document, right? Your Credit report is an important document and the one with a positive credit history can be an excellent financial tool. You can use it to get a loan from a bank, a credit union, a private lender or any sort of a creditor when you are in need of funding.

Did you know that 40 million Americans have a credit report that contains at least one inaccuracy? Many of these reports show big mistakes. Why should you have to pay a higher interest rate or not be able to apply for a mortgage because of an error committed by others? These are only two of the possible consequences of having a low credit score.

This is why it is important for consumers to monitor their credit report on a regular basis. If you think you don’t have an eye for detail and doubt you will be able to make out everything that is wrong with your report at just one glace, it’s best that you leave the task to professionals.