What's My Personal Credit Report?
"How do I ensure that my Personal Credit Report reflects a good score?", you may be asking yourself.
There are many factors that affect your credit rating.
Therefore, it is wise to thouroughly investigate this issue before applying for any home loan. You
may obtain your report from your local Credit Bureau or
directly from one of three company web sites:
Equifax: (http://www.equifax.com),
Experian: (http://www.experian.com),
Transunion: (http://www.transunion.com/index.jsp)
There is usually a nominal fee, but under certain circumstances you may be able to obtain your credit report at no cost. Free Credit Report
Did you know that each of the credit reporting agencies are now required to supply you with a free credit report annually? BEWISE: you must be careful to obtain your free report from the correct source as: "there is only one online source authorized to do so", advises the FTC.
All too often are there scam websites that try and obtain personal information by claiming to offer a free credit report or repair your credit...so make sure that you only give your information to the legitimate source.
The following link will take you to the FTC reccommended site. However, if you choose to type the following website name in your web browser, make sure you type it is exactly as it appears, including adding the "s" after "http": https://www.annualcreditreport.com/
If you have any questions or reservations, please go to the FTC website and choose their direct link at: http://www.ftc.gov/bcp/conline/edcams/freereports/index.html
Q: What if my credit shows a negative rating?
A: It is not uncommon for someone with good credit habits to have something undesirable pop-up on their personal credit report. If you find any errors on your credit report contact the creditor listed and try to resolve the situation promptly and professionally.
Bad Credit Can Happen to Good People There are many circumstances that can warrant a bad credit score. The most encouraging thing you need to know is that you can repair it. It may not happen overnight, and in some instances it could take several years depending upon the severity of your circumstance.
Don't confuse the term "credit repair" with "removing credit history"--they are not the same.
The way to remove an accurate bad credit history caused by poor bill payment practices is with time and good credit habits. However, an inaccurate bad rating can be as simple as an error due to mis-identity, a payment not been posted properly to an account, or as complicated as identity theft-which can be very difficult to fix.
Identity theft is a crime. To find out more information about what you should do, go to the Federal Trade Commission's website at http://www.consumer.gov/idtheft/.
For situations that involve identity theft and payment posting errors, contact the creditor that put the posting on your report, explain the situation, and supply any proof to back your case.
When a creditor confirms that an entry is an actual error, it may take telling the creditor: "Please delete the entry off my credit report and send a letter of confirmation to verify the correction has been processed."
It is good practice to keep all of the information documented when dealing with creditors, as they may deal with numerous customers and you'll want to prevent being set aside, then "lost in the shuffle".
Keeping good documentation that includes all conversations, letters and statements sent to you from your creditors will help support your case if there is ever a need for legal action.
Some creditors are not easy to work with and may require you to contact your local Credit Bureau for help in correcting the error in question. That is the purpose of Credit Bureaus and it is their job to authenticate any entry.
It is a good idea to work with the same person at the Credit Bureau office as well as your creditor every time to prevent any unnecessary loss or relentless repeating of information.
The
Federal Trade Commission has put out "Facts for Consumers"
and other information that everyone should read...
http://www.ftc.gov/bcp/conline/pubs/credit/crdtdis.htm
Certain
laws have been put into effect to protect consumers from false
credit reporting. When a creditor refuses to remove a false negative
entry from your personal credit report you should make a formal complaint, in
writing, and submit it to your local Credit Bureau.
If
you actually owe a
creditor, and for whatever reason did not pay them, it is "Wise"
to pay the debt immediately. Pay with a check or money order
and always get a receipt to
show proof of payment. Do your best to rectify the situation
with your creditor and negotiate with them to have the negative entry
deleted off your credit report.
For
persons who have had difficulties in the past keeping bills paid on
time, you may want to write
a letter of
explanation to your potential lender. If you have been
as little as 30 days late on a payment it could show up as a negative
mark on your personal credit report.
When
writing your letter of explanation, describe in detail
the reason for payment delays,
how you repaired the situation, your current bill payer habits, and
how you are working to prevent the situation from happening again.
In
the financial industry, this is called a... "Corrective
action plan"
A
lender will look more favorably
towards an applicant who shows that they are serious about earning
and maintaining a good credit rating if they have devised a plan to
keep it that way.
Credit
Counseling Services
Before
considering this type of service, research into it carefully. There
are several different "Credit Counseling"
organizations available. However, it is "Wise" to do a
thorough check on the organization you are seeking.
Contact
your local Credit Bureau or Better Business Bureau, the Federal Trade
Commission (FTC), and any other agency necessary to find out if
an organization is legitimate and reputable.
"BEWISE": If
a company is claiming that it can either erase or remove an accurate
bad credit history, you need to cautious.
_______________________________
WISE
TIP!!!
The
FTC has some good advice that is wise to not overlook:
_______________________________
There
are several non-profit organizations
that specifically do credit counseling and are supposed to work in
your best interest. These types of credit counseling organizations
usually do not bill you for their
services, but charge your creditor a percentage of the agreed
debt settlement.
The
debt settlement is negotiated between
each of your debtors and your credit counselor. These negotiations
include the balance of your payoff and an acceptable monthly payment.
The
creditor should
agree not to contact you in the future for collection purposes and
all communications are to be handled through your credit counselor.
In addition, they may also agree not to charge future interest
charges, therefore, you will only be paying the settlement amount and
nothing else.
Once
all your debtors have agreed to comply with terms proposed by your
credit counselor, each of the established monthly payment
amounts will be added together. This is the amount that you
pay directly to the counseling service each month. In turn, your
single payment is then divided up and dispersed directly to each of your debtors.
There
are some lending institutions who may
look negatively at anyone seeking credit counseling. On the other
hand, other lenders may look positively
towards anyone
seeking help to mend their credit.
You
will be headed in the right direction if
a potential lender is willing to give you advice on restoring your
credit--without the aid of a counseling service.
A
great way to build a business relationship with a lender, is to keep
him or her informed about your successes in resolving your bad debt
issues. When a lender knows that you are working feverishly to
gain back credit he or she will gain confidence in you and may be
more willing to risk granting you
a loan in the future.
The
most important aspects in credit repair is to:
Establish
a Good Debt Pay-off Plan - I have created an intense debt reduction plan that helped us pay off nearly our entire debt while planning for our home, see: BuildWisely's
Debt Reduction Plan
Make
All Payments Before Due Date
Be
Diligent and Stay Focused
Don't
Destroy it by Blowing Your Budget
Now
that you have filled out your worksheets and obtained your credit
report, it is time to find out the difference between How Much I
SHOULD Borrow Vs How Much Can I Borrow
Now, lets find out:
Based on My Personal Credit Report, How Much Can I Borrow?
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