Credit Report Repair Advice
Credit Repair - Understanding The Basics
By Claire Bowes
What is Credit?
Credit means that you are using someone else's money to pay for things. It
also means that you are making a promise to repay the money to the person or
company that loaned you the money.
Whenever a person applies for a loan, mortgage, a credit card or for any
other purpose for which he needs to borrow funds from a lending agency, the
agency will check the financial credit-worthiness of the person and based
upon its assessment of the financial risk involved in the deal, the agency
will decide upon the terms and conditions of granting credit. A positive
assessment necessitates a sound
financial background and a credit history with no bad remarks.
What is Credit Repair?
'Credit repair' is a process in which consumers with
unfavorable credit histories attempt to re-establish their
credit-worthiness. The process usually involves procuring a
credit report from the rating agencies and then taking
appropriate steps to address any apparent issues such as
errors, omissions, misinformation, misreporting or
misinterpretation. A consumer can then formally dispute
those errors or issues which unjustly distort their financial
healthiness and credit-worthiness. Various laws and
regulations designed to ensure legal and fair undertaking
of the credit repair process can then be utilized to
formally and legally start the credit repair process.
Consumers are entitled to a copy of their credit report
legally, if they have been denied a credit card or loan and
if the information provided on the report is inaccurate, an
investigation relating to true facts is necessary for a
Why Repair Credit?
A consumer's credit record significantly influences his
future purchasing power and his eligibility of availing any
credit facilities in the future. A good rating, or score,
can insure a low interest rate and loans for longer term
for various purposes like credit card balances, car or home loans. A poor
rating makes a consumer vulnerable to finance companies charging exorbitant
interest rates and imposing various unnecessary repayment and loan terms.
Considering the stakes and the consequences involved, it is absolutely
imperative for consumers to understand the importance of repairing their bad
or low credit ratings.
The Safe and Legitimate Way to Repair Credit
Credit repair can only be achieved through financial
discipline and hard work. Any easy way out of a poor credit history is
undoubtedly tempting, but it may lead to further financial difficulties in
If a poor credit history is due to circumstances beyond a consumer's
control, and they are able to somewhat make amends to their credit records
after that time, then a creditor can be requested to upgrade credit rating
because of a sense of customer loyalty.
Most creditors don't trust the customers defaulting on
their debts, so it may be very difficult to obtain new
credit. But once a person is able to demonstrate continuing income stability
and prompt payment patterns, his situation can improve in a period of two to
three years. This way, even in the case of bankruptcy, a consumer is likely
to be offered charge and credit cards within a year or two if maintaining a
What is most important is evaluating the financial
situation. If one finds that they are unable to make at least the minimum
payment on outstanding accounts, a contact should be made with the
creditors. Many creditors will appreciate the willingness to pay and are
most likely to help set up plans for repayment. Avoid making promises which
cannot be kept as a small payment is preferable to a large payment that
never arrives. Sometimes a small contact can be enough to reduce payments
and forestall more severe measures.
The next step is consulting a credit counseling agency.
These organizations are staffed with trained individuals
experienced in the credit field. A distinction needs to be
made between these and the commercial "credit repair"
companies who claim that, for a fee, they will undertake
No one can legally remove accurate and timely negative
information from a credit report. But the law does allow
one to request a reinvestigation of information in their file that may be
inaccurate or incomplete. There is no charge for this. Everything a credit
repair clinic will do can be done by a consumer themselves at little or no
The most important factor in credit repair is recognizing
the legitimate and viable options available, recognizing
what the scams are, and differentiating between the two. A poor credit
history can make it difficult to obtain
additional lines of credit making consumers fall prey to
many unethical programs that target consumers with less-than-perfect credit.
There are no quick fixes in credit repair. Common sense tells you that a
third party doesn't know your credit history better than you. Through
contacting credit bureaus, making your own corrections, consolidating your
debts and budgeting, you can improve your own score. You don't need to pay
someone to fix it for you. It's better to apply that money towards
discharging your debt.
Understanding the basics of credit repair and knowing what exactly is needed
in order to rebuild your credit history goes a long way to getting it
resolved. However, you must be disciplined, find the right credit repair
solution for you and not be tempted to fall back into debt.
Claire Bowes is a successful freelance writer and owner of http://www.uk-secured-loans-centre.co.uk
where you will find further advice and information on all aspects of secured
loans for debt consolidation, car loans and home improvement loans.
Article Source: http://EzineArticles.com/