Credit Guide Live

Did you know that credit report repair may be one of the biggest scams ever perpetrated on you the American Consumer? This article is a continuation of Part 1 of “Discover The Truth About Credit Report Repair”.

Many of the companies and individuals, which have bilked you he consumer, out of thousands of dollars have been put out of business and locked up for fraud. However, for every one that has been shut down it seems as if 3 more pop up. The sad thing is when the feds or the local state has shut them down; they simply pack a suitcase and move across the state line.

In some cases they simply change the name of the company and file for a new business license. In most states it is relatively easy to get a business license and open for business.

It is important for you to understand there are legitimate credit report repair companies. These companies will charge you a fee for doing the same thing you can do.

Here are some truths that you can do yourself without paying some one else to do it.

1. Disputed Debt: If you believe the amount of the money owed, shown on your credit transcript is wrong, you have the right to challenge it. You contact the lender with a letter or phone call, they have 30 days to respond. If they fail to do so you have the right to have it removed from your credit report.

Once the 30 days have passed it is your responsibility to call the credit reporting company and request it to be removed. Be sure you have a record of when and where you contacted the lender; you will need this for the credit reporting company to remove it from your report.

2. Bad debt shown but loan paid in full: Again if the loan has been paid off you have the right to negotiate with the lender and have it changed to “Loan Satisfied” or “Loan Paid In Full”. Even though it will remain on the credit report it will show others checking your credit you made it right.

3. Loan Negotiation: If you have failed to pay a loan on time or have defaulted on the loan, you have the right to try and make it right.

You can call the collection company or the lender and negotiate a settlement of the loan. Often times this could end up reducing the loan to pennies on the dollar. Once you have the reduced amount paid off, it will appear on your credit report as paid. Although it will reflect a reduced pay back it will show you have taken the necessary steps to try to make it right.

Folks you need to understand that the only way to do a legal credit report repair is to pay your debts. The debts you have paid late and defaulted on are going to be around for 7 years or longer. You heard right or longer being the keyword.

An example of this would be say if you have a defaulted loan in the year 2000. Normally it could drop off your credit report in 2007. However, you started to trying to clean up your credit report in 2005 and started a new pay back. Guess what? Its going to be on your credit report until 2012. But yet if you clean it up it will be for your good.

Credit report repair can be a long road, but you will find when you work at it, it will all be worth while.

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Did you just try to get a loan for car repairs and get turned down? That is a horrible feeling and it even makes you feel you have let your family and yourself down. Right? Don’t get desperate and run out to hire a company to do a credit report repair. You may find yourself in worse shape than before you started. This article may well give you 2nd thoughts about using one of these companies.

Chances are you have seen the ads for “Legally Repair Your Credit Report”, “Wipe Your Credit Report Clean In 7 Days”, “Buy A New House With A Clean Credit Repot” etc. You have been sitting in your favorite recliner watching the TV and suddenly somebody starts telling you can have a clean credit report in as little 30 days.

Hold on to your wallet if you are thinking about calling them. No matter what promise these companies make, bad credit transactions are going to stay on your personal credit report. They cannot wave a magic wand and make your bad debts vanish; like magic.

What you are hearing and reading is a first class con job, being played on desperate people. Many of these companies have been put out of business by the FTC (Federal Trade Commission) and local states Attorney General. The sad part is there are those that remain in business and continue to rake in $1000.00s of dollars per month from unsuspecting people.

Even some of the companies still in existence are a fly by night operation. You pay them a fee from as low as several hundred dollars to a high of perhaps a thousand or more. They collect your money and the next time you call them the phone has been disconnected.

However, there are some that actually offer a legitimate service. But you are going to be paying them to do something you can do yourself. All they are going to do is take the list of your debts, fill in a form letter to your lenders and ask them to prove the debt. Hey! You can do your credit report repair yourself.

O.K. are you now asking how you clean up your own credit transcript. You are most likely not going to believe this but the process is simple, but it can take some time.

Several years ago, the Federal Government of the United States, made it mandatory that the consumer had the right to get a copy of his credit report once a year. So the first step you have to take is write or call the “Big 3”, TransUnion, Experian and Equifax, and request a copy. By law they have to send you a current copy of your credit narrative.

If you should find false information reported by a creditor, your next step is write the company about their false information. By law, in 30 days, they must either prove the debt or have it removed if false. However, if you find the reported debts on your report are accurate, this is where the rubber hits the pavement. Because they will remain on your report for 7 years or until you clean them up.

When you hear the outrageous claims made by these companies, the old adage applies; “If it sounds to good to be true it probably is.”

In Part 2 of “Discover The Truth About Credit Report Repair” it will give you more information on how you can legally clean up your own credit transcript.

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A lot of people these days have bloated credit card debts. According to studies, about 1 in 20 American household has about $8000 in credit card debt. Credit card debt management is something that everybody needs to know, whether you are in debt or not.

The first step to effective management and reduction of your credit card debt is to know exactly how much money you owe. Many people carry more than one credit card with them all the time, and not everyone know exactly how much money he or she owes the credit card company.

Track how much money you spend. You’ll be surprised at how much money goes into the little things that you buy everyday. Try writing down the items that you buy as soon as the money leaves your pocket. Seeing everything in writing will help you plan your budget better.

Decrease your consumption. Do you take a cab everyday to work? Try riding a bus for a change. It’ll save you a lot of money at the end of the month, not to mention that it’s also environment-friendly. Stop buying expensive lattes and settle with plain coffee. Take the time to bring your lunch to work instead of eating out everyday. All these little things siphon money out of your pocket without you noticing it. Once you track your spending and identify things that you can do without, you effectively decrease your consumption.

Increase your productivity. A more realistic approach to dealing with debts is to increase your income while you decrease your spending. How many times have you tried to sit down and calculate how much you really need to save every month to pay off your debts in x numbers of years? It wouldn’t be a surprise if you find out that you’ll end up needing more money than you make monthly to cover your expenses plus debt payments. Find a freelance job that you can do from home or in your spare time. If possible, you may also want to consider adding overtime hours at work.

Make a monthly spending plan. In order to free up as much money as possible to put into your debts payment, create a spending plan where you estimate how much money you will need to spend every month, and how much money you probably will be able to save if you follow the plan. Take note of special events (like holidays and birthdays) where you will probably need to spend more money than usual and factor this into your monthly spending plan.

Prioritize your spending. Put your necessities first, taxes second, and other debts third. Define clearly the things that you consider to be necessities in life. Things like mortgage or rent, transportation expenses, child support (if applicable), food, and some money kept in a safe place for bills in an emergency situation, such as hospital bills.

Identify and understand your spending issues. Most problematic debt situations build up because spending issues are not identified or addressed. Do you spend to make yourself feel better about something? Take the time to sit down and really think this over.

Get rid of the clutter around the house and make the money work for you. If you have accumulated a lot of things that you do not use anymore, consider starting a garage sale and put the proceeds towards debt payment.

Taking steps towards credit card debt management is not something that you can perfect overnight. It takes a lot of dedication and the proper attitude to make it work. It’s difficult, but it’s far from being impossible.

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Several financial planners would agree that one of the foremost and important steps that you should take to protect your financial stability is to set aside funds as emergency reserve. The concept that you have the fund for emergency and unexpected events is enough to help you stay away from using your credit card and drown yourself in debt.

How to Get Started

Everyone must stash a little extra cash in case of emergencies. However, how much money should you keep? Although the topic of exactly how much money is needed for your emergency fund is open to debate, the minimum amount should be enough to cover your expenses for daily living for at least three months. It is also wiser to save for six months though most financial planners agree on a full year worth of cash.

Your personal circumstances and what it takes to provide you with a peace of mind are the elements to help you determine just how cautious you want to be. If for instance, you have well-off parents who have always been supportive and willing to help you in a financial crisis, an emergency fund for three months will be sufficient. On the other hand, if you had reach for you credit card for help and end up paying 15% in interest on the debt, you would be better off saving enough money for your expenses that would last for at least six months.

If by any chance you are thinking about where to place your money, emergency fund, paying off the credit card debt or funding your 401(k), you can always start with your credit card debt. Next, you can contribute to your 401(k). This step is especially useful since you can later borrow money from your 401(k). However, as soon as all those are finished, return to your project of setting up your emergency fund.

If you do not feel like you are required to make your entire funds this week, you can start like everyone else. Begin by setting aside a monthly amount, like for instance, 5% of your paycheck or other amount that allows you to build one month’s worth of living expenses over the course of a full year. It is also advisable and helpful to make this automatic. You can do this by asking your bank to do an automatic program for deduction from your checking account to your savings account.

Additionally, monitor you spending habit each month and always search for areas that you can develop. If by any chance you receive a promotion, bonuses, or other unexpected windfalls, always think about including them to your emergency fund.

Where to Keep the Cash

Keep your emergency fund somewhere that is both easily accessible and safe because you might be required to get the cash in a hurry during emergencies. Remember not to put your cash in the freezer but do not tie them up together in stocks whose worth may have declined by the time you need them.

The best option you have is to open a savings account or money market account. However, always examine their offer with regards to the minimum balance, interest rate and other terms.

By time you think you have saved enough, learn how to stop. You can now sleep easier and try to start placing your additional saving into higher-interest and usually less accessible investments or accounts.

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By having a credit, you are using someone else’s money as payment for your purchases. In addition, it also indicates that you are swearing to repay the money to the agency or person that loaned you the amount.

If you are applying for a loan, credit card or mortgage, it is normal for the agency to check your credit worthiness. This is essentially based on the assessment of your credit history, thus helping them determine the possible risks of the deal and decide the terms of the loan. Positive assessment means good financial background, which increases your chances of applying a credit.

The Credit Repair

The process wherein consumers with poor credit histories try to reestablish their worthiness is called the credit repair. It involves procuring the credit report from agencies and taking careful and
appropriate steps in addressing apparent issues, including omissions, misreporting, misinterpretation or other inaccuracies.

If there are any discrepancies found in the credit report, the consumer is entitled to dispute the errors that unjustly harm their financial healthiness and credit worthiness. There are several laws and regulations that are designed to guarantee fair and legal undertaking of the credit report process. These laws can be used to legally and formally start the process of credit repair.

Every consumer is entitled to one copy of credit report each year from each credit reporting agency. Investigations with regards to the real nature of the inaccuracies and errors are possible and necessary for a successful credit repair.

What influences your purchasing power and eligibility of availing any credit facilities in the future is
your credit record. You should keep in mind that a good credit score can help in several purposes, such as: mortgaging a home, buying a car or applying for a job. On the other hand, a bad credit score can make you vulnerable to exorbitant interest rates and unnecessary loan terms from several companies. These two facts are important in helping you understand why maintaining a good credit score is vital.

How to Repair Your Credit

The process of credit repair can be achieved through hard work and discipline. Easy methods,  which can help you get out of poor credit history, can be quite tempting. However, these easy way outs can only lead to further difficulties in the future especially if they are done illegally.

In case your poor credit history is caused by circumstances beyond your control, you can always request for an upgrade in your credit rating to your creditor. However, this can only be done if you were able to make amends to your credit records after the circumstances.

Creditors do not normally trust consumers who default on their payments. This can pose a difficulty to you in obtaining a new credit. However, once you are able to demonstrate enduring stability in your income and prompt patterns in your payments, the situation can improve in the span of two to three years. This way, even though there is a case of bankruptcy, you are likely to be eligible for credit cards within two years if the steady income is maintained.

Keep in mind that there are no quick fixes in repairing your credit. By contacting credit bureaus,
creating your own corrections, budgeting and consolidating your debts can improve your own score.

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