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November 11, 2005

Repairing your credit rating

Repairing your credit rating by Rudy Hadisentosa

By: CCN.com

It's not just the negligent who can end up with having a bad credit rating. Courtesy fraudsters, you can have a bad credit rating even if you have been making all your payments in time and taking all precautions. Whatever landed you with a bad credit rating, the important question is how to repair it.

Let's start with the scenario where you have been doing everything right and still ended up with a bad credit rating. First thing to do in any case is get a copy of your credit report from your national credit bureau (e.g. three major US credit bureaus are Experian, Equifax and TransUnion) and check it thoroughly for discrepancies, if any. If you have been tricked by a fraudster, then report it immediately to the bureau. There are fraudsters who somehow retrieve information about an individual and use it to apply for credit cards in his/her name and then obviously default on payments.

However, if you are the one responsible for spoiling your own credit rating, then the following recipe needs to be put to use to prevent any further damage and improve the credit rating:

If you can, then wipe off any long standing debt on your credit card account as soon as possible. Ensure that you are making timely payments of your monthly installments for any loans or home mortgages that you might have taken. Do not apply for too many loans or credit cards all at once. Do not overspend on your credit cards. In fact try to remain within 70-75 of the total credit limit available to you.

Opening a credit card account with a department store you shop with frequently can also help in repairing your credit rating. Just make sure that you make the payments with the newly acquired credit card and pay your credit card bills in time.

Ensure that you are following all the safety and fraud protection instructions to prevent yourselves from becoming a target of the fraudsters. These include basic things like signing at the back of your credit card when it first arrives and destroying all the credit account related documents before binning them.

If you find it difficult to handle the situation all by yourselves, don't hesitate to take professional help. Even though you have to shell out a small fee for such an advice, it can benefit you a lot in the long run and save much more for you.

Remember that a good credit card rating can go a long way in making your future credit requests/transactions smooth and a bad one can be an obstacle. So give it the attention it deserves. Also, a good credit rating cannot be gained overnight but only through a responsible and disciplined attitude towards your credit related transactions over a period of time.

About the Author

Rudy Hadisentosa: CCN.com is a free online credit cards review and application website. We offer credit cards selection from visa,master cards, discover, american express and many others. We have quite some categories and hundreds of credit cards selection to fit your need. Apply for a credit card at CCN.com.

Posted by nicheguide at 05:52 AM | Credit Repair Comments (0)

November 05, 2005

Avoiding Credit Repair Scams

If you have less than perfect credit, you’ve probably seen advertisements for credit repair services. In newspapers, TV, radio, and on the Internet credit repair services claim to be able to remove bankruptcies, create new credit identities, and even erase bad credit.

Unfortunately, many of these credit repair companies exist only to cheat money out of their customers. After you’ve paid them hundreds of dollars in fees, these credit repair companies simply vanish because they can’t deliver what they have promised. The only real way to improve your credit report is with time, effort, and a personal debt repayment plan.

If you decide to work with a credit repair service, there are certain warning signs you should look for to decide if the company is legitimate. A credit repair service should not want you to pay for credit repair services before any services are provided. Another warning sign is if a credit repair service recommends that you not contract the credit bureau directly or refuses to answer questions about your legal rights as a debtor.

Some phony credit repair services will advise you to dispute all information in your credit report or take any action that seems illegal, such as creating a new credit identity by applying for an Employer Identification Number to use instead of your Social Security Number. If you follow illegal advice and commit fraud, you may be subject to prosecution. It's a federal crime to make false statements on a loan or credit application, to misrepresent your Social Security Number, or to obtain an Employer Identification Number from the IRS under false pretenses.

Negative information on your credit report is generally reported for seven years. Bankruptcy information can be reported for ten years. Default information regarding US government insured or guaranteed student loans can be reported for seven years.

While no one can legally remove accurate and timely negative information from a credit report, the good news is that the law does allow you to request a reinvestigation of information in your file that you dispute as inaccurate or incomplete. According to the Fair Credit Reporting Act, you can dispute mistakes or outdated items for free. Ask the credit reporting agency for a dispute form or submit your dispute in writing. Include supporting documentation, clearly identify each item in your report that you dispute, explain why you dispute the information, and request a reinvestigation. Make sure you remember to keep a copy of the dispute for your records. If the new investigation reveals an error, ask that a corrected version of the report be sent to anyone who received your report within the past six months. If the reinvestigation does not resolve your dispute, have the credit bureau include your version of the dispute in future reports.

Many states have laws regulating credit repair companies. If you believe you have been cheated by a fraudulent credit repair service, don’t hesitate to report the company to your local consumer affairs office or your state attorney general.

Posted by nicheguide at 06:29 PM | Credit Repair Comments (0)

Tips To Build Your Credit Today

If you’ve recently paid off a lot of debt, you may be wondering where to go from here. Maybe you went through a divorce and got stuck with a lot of high interest credit card debt, or got behind on your payments after a job layoff. Whatever the reason, you fell behind with your payments, your credit report suffered for it, and now you’re ready to get back on track. Luckily, it’s a lot easier to re-build your credit than it was to get out of debt!

Here are some tips that will have your credit report sparkling in no time!

First, you should expect to spend about a year rebuilding your credit. I can hear some of you groaning—after all it took a few years to get out of debt, right? Yes, but you must understand things from a lender’s point of view—they need to see proof that you are serious about keeping up your credit history.

You will need to establish some sort of credit, so that you can show your future creditors that you can be trusted. If you’ve had serious credit mistakes in your past, that may mean getting a secured credit card. These types of credit cards are secured by a bank balance, which will equal the spending limit on the card. The point of them is to build credit when no one else will issue you a card.

If you can apply for a low interest rate card, you should get one and use it for the sole purpose of rebuilding your credit.

Another credit reporting building method is to apply for a personal loan, and then pay it according to the terms I’ve outlined below.

The biggest thing you can do to rebuild you credit is to pay your payments on time. That means that you can’t be late—not even once. If you are mailing in your payments, be sure to give it plenty of time to not only reach the destination, but also clear the proper processing channels. If you think that you’ve cut it too short, overnight it. Nothing should stop you from getting those payments in on time! Remember that even one late payment can make a difference of whether or not you get that car or home loan!

You should also shoot to pay more than your minimum payments every month. Ideally, you would pay off your credit card every month, but if you can’t do that, then do pay more than the minimum. For example, if your minimum payment was $25 per month, try to pay at least $35. This will accomplish two things. First, it will make you look better in future lender’s eyes, and secondly, because by doing so, you will paying more toward your principle balance every month, (as opposed to interest), and that will reduce the overall amount that you’ll have to pay.

Do all of these things will patience and determination, and you’ll soon find yourself with a credit rating that you can be proud of!

Posted by nicheguide at 06:52 AM | Credit Repair Comments (0)

November 04, 2005

Business Credit - Building it For Businesses

Let’s imagine that you wanted to start a business—you have a great business idea, and now all that you need is business credit so that you’ll be able to borrow money against your business without having to dive into your personal assets or personal credit. This means less risk for you, the owner. Some credit reporting agencies sell a business FICO score based on both the risk of the business and the personal credit of the owner. In some instances, the owner’s personal credit is linked to the business credit, but it’s best to keep them separate if you can. Building business credit is completely different from building personal credit. In addition, you don’t have the same credit protection laws with business credit that you do with personal credit.

There are certain keys that you can follow to help ensure your business credit gets off to a great start. Follow along as we discuss them below.

First, set up the proper business structure and take basic steps to ensure your business appears stable to the business credit bureaus. That means getting the proper occupational licenses, corporate structure established and a business credit profile. A business credit profile helps you to build business credit without using your personal credit. Benefits in having a business credit profile are numerous. For one, you will have more cash for the business, convenience in purchasing, protection of your personal assets, limiting of personal liability from the business, and the ability to prepare your business for future lending needs.

Secondly, you need to borrow or buy products and services from companies that will report your credit history to the major business credit reporting agencies such as Dunn and Bradstreet and Experian. Unlike personal credit ratings or FICO scores; income or better yet income potential, plays a huge roll in business credit scores. The top FICO scores are reserved for the large stable businesses. But don’t be discouraged, with a little time, you business FICO will skyrocket!

Next, in order to enter the business credit market, you’ll need to do a credit assessment to determine if you comply with the lender and credit bureau’s requirements. Then look for businesses that issue credit without the need for established business or personal credit checks or guarantees. Once you have transacted business with vendors on credit, you can use those references to build your credit profiles with the credit reporting agencies.

In many states, there are non-profit organizations and/or government organizations that will help you with setting up business credit. Often there are loans available for start-up businesses or even government grants. Check your state government web sites for such organizations. Many retired owners and businessmen volunteer to help start-up businesses. By researching your options prior to a business start-up; you will not be struggling later with questions. With any luck building your business credit will be a smooth transaction with a huge net profit for you in the end!

Posted by nicheguide at 06:53 AM | Credit Repair Comments (0)