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Obtaining credit has become a little more difficult due to recent events in the financial markets, but most people will have no problem obtaining the credit that they desire.  Depending on their actions in the years prior to applying for credit, they will either be easily approved for credit by the credit card company or denied quickly.  The final decision will depend on the person’s credit score and their credit report.

Credit Report

A credit report is an electronic record of the way a person uses their credit and manages their payment obligations.  A credit report will include records of all credit accounts opened by the person, their payment record on their credit accounts, and their payment record on other bills.  Any late or missed payments for any of these accounts will be reflected in the credit report.

Credit issuers will review a person’s credit report to see how the person manages their debt and whether they can be depended on to make their payments on time.  If the person’s credit report shows that they have been using their credit wisely and have been making all of their payments on time, then the credit issuer will have no problem with issuing a line of credit for the person.

Credit Score

A credit score is a snapshot of the person’s entire credit profile reduced down to a three digit number.  A person’s credit score is compiled from a number of different variables including the amount of credit the person has available, how much of that available credit is being used, the number of times the person has missed a payment on a credit account, and the number of times that the person’s credit report or score has been checked in the recent past.

A person with a high credit score will have a much easier time obtaining credit than a person with a low credit score.  For most credit issuing companies, a high credit score is considered to be a credit score of 650 or higher and a low credit score is considered to be 550 or lower.  People that have low credit scores are not automatically denied credit, but the credit that they are offered will probably require a higher interest rate to be paid and have a lower credit limit than the credit lines extended to people with high credit scores.

Individuals that have a low credit score have several options for obtaining credit.  The first option is to find a credit issuing company that accepts applications from individuals that are trying to establish their credit or increase their credit score.  Another option is to get a trusted individual with good credit to co-sign for the credit account with them.  Although it will not be as simple as getting credit with a good credit score, it is not impossible to get credit if you have bad credit.

Over the past decade, credit reports have dramatically increased in importance and ability to affect your daily life.  This piece of personal information holds enormous power over your ability to obtain credit, obtain employment, or obtain a place to live, so it is very important that you know what information is included in your credit report.  Here are the three best reasons to check your credit report.

To Guard Against Identity Theft

In many cases of identity theft, the only reason that the person became aware that their identity had been stolen was because they reviewed their credit report and saw that there were accounts that they did not remember opening on the credit report.  The identity thieves will use the person’s real name and social security number to obtain the credit but will use a false address and other contact information so that there is very little chance of the person becoming aware of the identity theft through contact with the creditor.  By reviewing your credit report regularly, you will be able to quickly identify fraudulent accounts and have them closed before the identity thieves can do much damage to your credit.

To Check For Errors

Experts estimate that nearly one-quarter of all credit reports contain errors that could affect the person’s ability to obtain credit at the best rate they should qualify for.  Mistakes that are found soon after they have been reported to the credit reporting bureau are much easier to fix than mistakes that have gone unnoticed for years before being reported.  The credit reporting bureaus are required by law to investigate reports of inaccurate information on a credit report and if the information is found to be incorrect, it will be removed from the individual’s credit report.

To Review Credit Worthiness

It can be very frustrating to fill out all of the paperwork and provide all of the documentation to apply for credit just to be denied because of the information on your credit report.  Checking your credit report on a regular basis will help you determine your credit-worthiness before you take the time to fill out the application and allow you to estimate the interest rate you should qualify for when you apply for credit.  This will prevent you from applying for credit that you will not be approved for or signing up for a credit product with an interest rate that is much higher than what you should qualify for.

Experts estimate that close to 25% of individuals with a credit history have errors on their credit reports.  The reason that the volume of errors is so large is that the three major credit reporting bureaus process large volumes of information each day, increasing the chance that an error in the information entered or a calculation error can go unrecognized for a long period of time.  In many cases, these errors are severe enough to cause a drop in credit score that causes the person to be denied credit.

It is very important to ensure that all of the information that is contained in your credit report is accurate and if inaccurate information is found, steps to correct the incorrect information should be undertaken immediately.  Mistakes on a credit report become harder to remove the longer they are allowed to stay on the credit report so the amount of time between when the information was entered and when the information is discovered to be incorrect should be a short as possible for the best results.  Here are the steps that should be taken to correct any errors in your credit report.

Prepare Yourself To Go To Court
You should go into the process of correcting your credit report with the realization that you may have to go to court to have the information corrected properly.  Although this outcome is not the most common outcome experienced, keeping your efforts in the proper frame of mind will prevent you from making mistakes that can be costly if you do have to go to court to get the situation corrected.

Keep An Accurate Log
Be sure to keep track of all of the actions that you have taken to try to remedy the situation by writing them down in a notebook or ledger so that you have an accurate record to present if legal action is needed to correct the information in your credit report.  All phone calls, mailings, document submissions, and responses should be entered into this log.

Keep It Professional
Although it may be tempting to scream or rant in frustration, it will not do you any good in the long run.  Remember that the person that you are currently communicating with is not the person that entered the incorrect information and that they are trying to help you in the best way that they know how.  Courtesy will always get you farther than belligerence.

Make The Right Contacts
Be sure that the person that you are communicating with is actually a person that may be able to help you by specifically spelling out your problem and asking them if they will be able to help you.  If they say that there is nothing further they can do to assist you in correcting the problem, ask to speak with their manager or the next person up in the chain of command until you reach someone that will be able to correct the issue.

Send Information By Mail
The laws governing consumer protection state that the credit bureaus must be notified in writing of any inaccuracies in a person’s credit report and that notification, along with any other documentation, should be sent by certified mail.  Sending information by mail allows it to be tracked much more easily than simply providing information over the telephone and having a copy of the information along with a tracking number certifying that the information was sent and received can provide the proof that you need if legal action is needed.

Confirm Everything
Ask for written confirmation for anything that is promised or proposed by the representatives of the credit reporting bureau or the creditor that you are contacting.  If they state that the information on the credit report is being corrected, ask for a copy of the Universal Data Form that is being used to update the information.  Be sure to document the details about the proposal, the contact’s first and last name, when the confirmation was promised, and when the confirmation was received.

Use All Tools In Your Arsenal
If contacting the credit reporting bureaus is not giving you the results that you need, use other options to see if you get better results.  Tactics like contacting the creditor and going up the chain of command, hiring a credit repair company, copying the executives of the credit reporting bureaus on communications with their firm, or writing to the Federal Trade Commission about the issue may produce the desired outcome if no other avenues are working.

Experts estimate that as many as 25% of people with credit histories have errors on their credit report.  Incorrect information on your credit report can cause a number of different problems, including causing the person to be turned down for a loan, home, or job or requiring the person to pay higher interest payments on loans.  Ensuring that the information on your credit report is correct and fixing mistakes that have been added to the report is not as difficult as you may think and can be accomplished in several simple steps.

1. Review Your Credit Report Regularly

The easiest way to identify incorrect information on your credit report is to review your credit reports regularly so that you know what information should be in your credit report and what information should not be included.  The federal government has mandated that every person is entitled to receive one free credit report from each of the three major credit bureaus each year so that you can see what information has been added to the report.  Identifying mistakes quickly will make it much easier to correct the information.

2. Contact The Credit Bureau

If incorrect information is found on your credit report, the next step is to contact the credit bureau to let them know about the mistakes that you have found.  The credit reporting bureaus are required by law to investigate any allegations of incorrect information on a credit report and if the information is determined to be incorrect, it must be removed from the credit report completely.  It is very important to remember to be polite and courteous to the representative at the credit reporting bureau because you are asking them to help you correct the issue.

3. Keep Careful Records

Once you have contacted the credit reporting bureau about incorrect information in your credit report, it is very important to keep careful records of all interactions that you have regarding the incorrect information until the information is corrected or deleted from your credit report.  Every contact that is made should be logged and include information such as when the contact was made, who you spoke with, and what solution was presented to you.  These records will come in handy if you ever need to involve a third party, like a lawyer, in the process to get the information in your credit report corrected.

4. Verify That The Information Has Been Corrected

Do not make the mistake of assuming that the information in your credit report has been corrected just because you have contact the credit reporting bureau and alerted them to the mistakes that were made.  In some cases, information is lost or cannot be verified, stalling the process of correcting the information in your credit report until the credit reporting bureau has received additional information.  It is important to keep making contact and reviewing your credit report until you are sure that the incorrect information has been removed.

Many people are looking for a personal loan to decrease the debt load that they are carrying, especially when the person is battling a low credit score as well.  When applying for personal loans or cash advance loans, there are several things that the person must keep in mind in order to get the best rate and the quickest approval for the loan that they desire.

Loan approval is based mainly on an person’s credit history, payment history, and the amount of debt that the person is carrying.  When using these factors to determine whether the person should be approved for a personal loan, a low credit score can result in the person receiving a much higher interest rate for the loan or being rejected for the loan outright.

Shop Around For The Best Loan

When applying with a lender for a personal loan, there are several things to keep in mind.  The first thing that should be taken into consideration is that the first loans that the person may find may not be the best one for the person’s situation.  Different types of loans will have different terms associated with them and the best terms can save you hundreds of dollars over the life of the loan.

In many cases, a person that has a low credit score is so desperate for loan approval that they will apply for the first loans that they see regardless of the terms and choose whatever loan company offers them approval first.  It is best to shop around for several different loans to find out which ones will offer the best interest rates.

It is always great to find personal loans with low interest rates, but the person must be careful to make sure that the low interest rate is not just to get the person to accept the loan.  In some cases, the interest rate will change after a brief period, after which the interest rate will reset to a dramatically higher rate.  This higher interest rate can raise the payments on the personal loan by a significant amount.

Find A Company With A Good Reputation

When dealing with companies that offer personal loans or payday advance loans, it is best to be sure that the person is dealing with a lender that is reputable.  There are many scam artists and shady lenders out there just waiting for people that are unaware of their true financial situation or who do not know enough about financial matters to recognize a scam.

For instance, some lender that issue personal loans insert a great deal of hidden fees into the approval for loan.  The fees that would be charged to the person will be detailed in the terms and conditions associated with the loan, but if the person does not read this information carefully, they may be unaware of the fees that they will be responsible for paying.  These fees can total hundreds of dollars and is solely for the privilege of having the loan issued to the person.

People that submit their information to these lenders can find themselves even deeper in debt because of the numerous fees that have been charged before the person ever receives the loan.  Be sure to read the terms and conditions for the personal loans carefully before applying for the loan.

Although checking your credit report is one of the best and easiest ways to keep more of your own money in your pocket, many people neglect to check their credit report at all.  In fact, as many as 50% of people that have a credit profile have no idea what information has been added in the last three years and this is one of those cases where what you don’t know can hurt you. 

The most common reasons for neglecting to check a credit report is the cost of obtaining the actual report, believing that what is in the credit report is already known, and believing that knowing what is in the credit report will not be of any benefit because the information included cannot be changed.  Most people would be surprised that none of these reasons are completely accurate and are no excuse for not learning what has been reported to the credit bureaus and entered onto their credit report.

Reason: Cost Of Obtaining The Report

Many people do not check their credit report because they believe that it will cost them money to obtain the report or that they will have to pay for some type of service in order to view their report.  The truth is that every person is allowed to access their credit reports from the three major credit bureaus for free every year. 

Government legislation has dictated that each of the major credit bureaus (Experian, Equifax, and Trans-Union) must provide one free credit report each year to any consumer that requests the information.  This allows the consumer to see what is contained in their credit report without having to spend a dime of their own money.

Reason: Already Aware Of What Is In The Report

Some people believe that they already know what is in their credit report based on their memory of how they have conducted their financial transactions in the past.  Unfortunately, experts estimate that nearly 25% of all credit reports contain incorrect information and fraudulent transactions. 

If mistakes have been made on your credit report or someone else has been using your personal information to obtain credit fraudulently, you will never know until you have your credit history pulled.  Many people only learn of the incorrect information on their credit report after they have applied for additional credit and have been denied, causing a financial headache for the consumer as these mistakes can be difficult to correct after an extended period of time has passed.

Reason: Information Cannot Be Changed

Many people believe that there is nothing that they can do to change the information that has been reported to the credit bureaus for inclusion on their credit report, so obtaining their credit report would be a futile pursuit.  The truth is that federal legislation has made it possible for any consumer to challenge the information in their credit report if the information is inaccurate and the credit bureaus are required by law to investigate any allegations of inaccuracies in a credit report.

These rules prevent the consumer from being denied credit because of mistakes in their information or deliberate attempts to ruin their credit rating by third parties.  The credit bureau will request information from both the consumer and the creditor for review and will make a determination as to whether the information included in the credit report is correct.  Any inaccurate information must be removed from the credit report as quickly as possible.

Many potential homeowners know that having to obtain a subprime mortgage loan will make paying for their home more difficult but a lot of these homeowners that must obtain a subprime mortgage loan are unaware that they will only qualify for a subprime mortgage because they have no idea that their credit history is as bad as it is.  A credit history is not one of the things that is seen on a frequent basis, so it is difficult for many to determine whether or not they fall into the good or poor credit categories.  There are several different ways that a homeowner can use to determine their credit worthiness.

Estimating Your Credit Score

The first way to determine whether you will need to obtain a subprime mortgage loan is estimating the credit score.  Using this method, the individual reviews their debt levels and their financial actions to determine whether these have led to a credit score increase or decrease.  An individual that paid off their credit cards, put money in savings, and have not been late on any bills can expect to have a credit score increase while individuals that have missed some payments and have used more than 50% of their available credit can expect a decrease, resulting in the need to settle for a subprime mortgage.

Although this method of determination is imprecise, it will provide a reasonable estimate of what the credit score will be.  As long as the information is remembered accurately, the person may be able to correctly judge their credit score and whether they must obtain a subprime mortgage loan.  There are even some credit history calculators available on the internet that will take this information and calculate your credit score online.

Reviewing Your Credit History

Another method of determining whether you must obtain a subprime mortgage loan is to obtain your actual credit history and score from one of the three major credit reporting companies; Equifax, Experian, or Transunion.  This can be difficult because the homeowner will need to verify their identity to the company before their credit information can be released.  In some cases, it can take up to two weeks to obtain the information because of the number of requests that these companies handle every day from businesses and individuals.  If there is a problem with the information that is submitted, it can take even longer to find out if they must obtain a subprime mortgage loan.

One of the most devastating and damaging things that could happen to affect your financial future is to experience a dramatic drop in your credit score.  In most cases, the points deducted from your credit score can take many years to correct and rise back to its previous acceptable levels.  A bad credit score has the ability to affect many different areas of your life and can make it impossible for you to do many of the things that you desire.

Where You Work

Many people do not know that having a bad credit score can affect the places that they are allowed to work and the positions that they will be allowed to hold within their company.  Many businesses have begun to use pre-employment credit checks to determine whether the applicants for their open positions will be trustworthy and responsible individuals.  The common belief is that trustworthy, dependable employees will be responsible with their money and pay all of their bills on time, resulting in a higher credit score.

Some specific employment positions require the interviewer to review the applicant’s credit score.  These positions are generally positions of trust, such as management or security positions, or positions where the employee will have access to company money, such as a bank teller or a cashier.  The rational behind this practice is that applicants that have a higher credit score will be less likely to succumb to temptation and use the company’s funds to repair their credit situation or pay off their obligations.

Where You Live

A bad credit score can also affect where you will be able to live.  Most people understand that a bad credit score will prevent them from being able to obtain a mortgage loan to purchase a home, but many do not know that a bad credit score can prevent them from being able to rent a home or an apartment.  Rental companies and homeowners that are renting out their homes use credit checks to determine whether they will have an issue with a potential tenant paying their rent.  If an applicant’s credit history shows many missed payments on bills and an inability to use their credit wisely, it is a red flag to the owner that they may not receive all of their rental payments in a timely manner. 

A bad credit score and spotty credit history can affect many different areas of your life in ways that you may not realize until you have experienced the effects for yourself.  The only way to avoid these issues is to ensure that your credit score remains in the acceptable range by making all of your payments on time and using your credit wisely.

Due to the fact that credit is very important today, many individuals are wondering how to find a good credit repair company.  Finding a good credit repair company is not hard, regardless of how bad your credit score may be.  There are businesses that average individuals with bad credit can consult with to repair bad credit quickly and knowing where to look for these companies and how to take advantage of what is offered is one thing that every individual should know.

Different Types Of Credit Repair Companies

Finding a good credit repair company does not have to be difficult.  There are many businesses that specialize in credit repair that you can use and where you turn depends on what required you to seek the company out in the first place.  The most popular businesses used for credit repair are traditional companies affiliated with government programs that offer credit repair plans and financial counseling. 

After you consult with the company, the representative will submit your information to the creditors and the creditors determine whether you are eligible for any actions that could reduce your debt and help you repair your credit quickly.  Using these types of credit repair companies works well for people that have a lot of creditors and not a lot of time to negotiate with each of them. 

Another option  is to respond to one of the credit repair advertisements that frequently show up in the mail.  These advertisements will often have a website or phone number listed within the information that can be used to contact the company to learn about your options for repairing bad credit.  Individuals are required to give their information to the customer service representative or type their information into an online form and access to the program can typically be granted or denied within a few minutes. 

There are a couple of drawbacks to taking this approach to finding a credit repair company.  One drawback is that even though you are granted instant access, it will still take a few days to submit all of your information and have someone from the credit repair company contact you about your situation.  There is also an increased risk of becoming the victim of a scam when you use this method of finding a credit repair because there are a number of criminals that will prey on desperate people that are looking for a way to repair their credit score.  By conducting a careful review of the company before allowing them to take your personal and financial information, you will reduce the risk of becoming a victim of a scam.

Many individuals are looking for a credit repair method to decrease the debt load that they are carrying, especially when the person is battling a low credit score as well.  When looking for repair methods, there are several things that the person must keep in mind in order to get the best price and the quickest approval for the method that they desire.  The method used will be based mainly on an individual’s credit history, payment history, and the amount of debt that the individual is carrying.  When using these factors to determine whether the person should be using a credit repair method, a low credit score can result in the person receiving a much higher price for credit repair assistance or being rejected by the company outright. 

Review Your Options

When looking for a credit repair method, there are several things to keep in mind.  The first thing that should be taken into consideration is that the first methods that the person may find may not be the best one for the person’s situation.  In many cases, a person that has a low credit score is so desperate for a solution that they will use the first method that they see regardless of the terms and choose whatever method that looks like it may work.  It is best to review several different methods to find out which ones will offer the best results. 

Be Wary Of Deals

It is always great to find repair methods with low prices and little effort involved, but the person must be careful to make sure that the low price is not just a hook to get the person to accept the method.  In some cases, the price will change after a brief introductory period, after which the price will rise dramatically higher for the services to continue.  This higher price put the person deeper into debt by a significant amount and may even make the method unaffordable for someone that has a low credit score or financial situation, making the situation worse. 

When dealing with companies that offer credit repair methods, it is best to be sure that the person is dealing with a company that is reputable.  There are many scam artists and shady lenders out there just waiting for the unwary, which includes many people with a low credit score.  For instance, some companies that offer repair methods insert a great deal of hidden fees into the price of the program.  These fees can total hundreds of dollars and is solely for the privilege of using the methods offered by the company.  Individuals that submit their information to these companies can find themselves even deeper in debt because of the numerous fees that have been charged before the individual ever receives any assistance with their problem.  Be sure to read the terms and conditions for the company carefully before giving them any personal or financial information about you to avoid becoming the victim of a scam or unscrupulous business practices.