Common Myths About Credit Repair - Go to top

by: John Mussi. About The Author. John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.

As important as credit is, there are a lot of people that don't really know that much about credit and how it can be damaged or repaired. A variety of different myths and misconceptions exist in regards to credit and credit repair, and there are a lot of people who don't even bother looking into the facts concerning this topic until it is too late and their credit has been damaged or worse.

Below you'll find some of the more common myths about credit repair, as well as the factual information that goes with them. Of course, before we get to that it's important that you understand exactly what credit is and how it works.

What Credit Is

In order to understand why many credit myths aren't true, it's important to understand exactly what credit is in the first place. At its most basic, credit is a measure of how well you have paid your loans and bills in the past. Positive experiences cause creditors to send positive reports to credit bureaus, who in turn add to your credit score; negative experiences and late payments result in negative reports which subtract from your credit score. The higher your credit score is, the better your credit and the more likely lenders are to offer you good rates on loans and credit lines.

Myth #1 - Credit Can Be Repaired Instantly

There are a number of credit repair scams that all offer you instant credit repair... unfortunately, they can cause you a variety of problems and even get you into legal trouble. These scams operate by obtaining a new tax identification number for you, usually in a manner that is legally reserved for businesses. This new number is a blank slate credit-wise, but if you use it instead of your own identification number you can be charged with fraud. Worse yet, the scammer might steal your information for identity theft.

Myth #2 - You Can't Check Your Own Credit

Many people believe that you aren't allowed to check your own credit, or if you are then it'll cost you. Many places actually allow individuals to check their credit once per year (or more) for free, so long as they do it through the appropriate government agency. Some credit monitoring services also offer free credit reports, though they require that you sign up for a trial of their service in order to do so. If not cancelled within the trial period, you will then be billed for their credit monitoring service... which can cost more than the credit report would.

Myth #3 - You Can't Fix Bad Credit

With all of the advertisement for credit repair services, there are still those who believe that truly bad credit can't be repaired. At times it may seem that way, but any credit can be repaired with time and careful repayment of your debts. As old debts are paid off and newer debts are paid on time, even the worst credit will slowly but surely begin to improve.

Myth #4 - Bankruptcy Is an Easy Way Out

Many people view bankruptcy as an easy way out of debt, which is why the penalties for filing bankruptcy are so strict. Bankruptcy should be used as a last resort only, because it can lead to years of garnished wages and not being able to use your credit. Even after the bankruptcy has been discharged you might find it nearly impossible to establish new lines of credit until years later.

Credit Repair - It's All About Saving Money - Go to top

by: Thomas Erikson. About The Author. Thomas Erikson is co-founder of http://www.your-debt-consolidation-loan.com which provides http://www.your-debt-consolidation-loan.com/credit-repair.html information and solutions.

Why is credit repair important? It comes down to one simple thing - saving money.

Everyone has a credit report. It turns out that about 70% of all credit reports contain inaccurate or untimely information. This can have an adverse effect on your credit score and that can cost you money. Credit repair is the process you undertake to remove or correct these errors on your credit report.

The great thing about repairing your credit is it's not difficult to do. The first step is to obtain a copy of your credit report. If you have been turned down for a loan or credit, you are entitled to a free credit report within 60 days of the rejection. You are also entitled to 1 free report from each of the 3 credit reporting agencies each year.

The next step is to let the credit reporting agency know in writing what information you think is inaccurate and request that it be removed or corrected. Make sure you send the letter by certified mail so you have a receipt with a record of when you sent it. Always keep copies of your letters.

The credit reporting agencies have 30 days to investigate your dispute and get back to you. If they find the information under dispute to be inaccurate, they must notify all three credit reporting agencies and the creditor or organization that provided the information. All of them must correct the information in your file.

When the investigation is complete, the credit reporting agency will provide you with the results and a copy of your updated credit report for your review.

If the investigation does not resolve the issue, you can request to have a statement of the dispute added to your file and on future credit reports.

Then you need to send a letter to the creditor or organization that provided the inaccurate information, telling them that you dispute their information. Include all documents that support your position. If the creditor reports the information to a credit reporting agency, it must also include a notice of the dispute.

So why go through this exercise? Your credit score determines how much interest you pay on loans or credit. If you add up how much interest you pay on your car loan, home mortgage and insurance, you can see just how much money is at stake - it can be thousands, tens of thousands or even hundreds of thousands of dollars. It can even determine if you get a job or not.

Credit repair is vital in making sure your credit report is accurate so you can save money - sometimes a great deal of money.

How Does Credit Repair And Debt Consolidation Works? - Go to top

by: Geoff Spencer. About The Author: Geoff Spencer is a staff writer at www.finance-journal.com and is an occasional contributor to several other websites, including www.onlinebusinessgazette.com.

Even though everyone’s financial situation is unique, practically all of us have some sort of debt. It might be huge debt like with mortgages and loans or small credit card or department store credit debt. The only way to wind up with debt is as a result of being extended credit. In these financial times we are in it can be difficult to get by without credit. But too often it becomes difficult to pay off the credit and that is when the trouble begins. Once you are late in your payments, your creditors will report this to the credit bureaus and it will affect your credit rating. When you are stuck with a bad credit report, even if you have a good reason such as illness, etc, it will be very difficult for you to get credit in the future when you are back on your feet financially. This means you may not be able to buy a house or a new car on credit. Or, if you are able to get a loan, it will be from a subprime lender who will charge you exorbitant interest fees.

If you have been through a tough spell and now have bad credit, you can undergo credit repair and one way to do this is through debt consolidation.

One thing about bad credit is that it can continue to get worse. It is not a case of having good or bad credit, it is a case of your credit being assigned a numerical value on a scale from good to bad and with each late payment, your credit slips farther into the bad side of the scale. So to repair your credit you need to get your creditors paid up to date as quickly as possible.

Chances are that you don’t have the money to do this or you wouldn’t be behind in the first place. This is when debt consolidation can be a useful tool for credit repair. You take out a single load which is used to pay off all your other loans. Now all your bills are paid up to date and you just have one monthly payment to make on your new consolidated loan which probably won’t be due for thirty days so you have some breathing room to get back on your feet.

You will still owe the same amount of money, but if you arrange your loan to do so, it can be spread over a long enough period that the payments are more manageable. The advantage of a debt consolidation loan is that it can repair your credit quickly and help you get back on your feet financially.

The disadvantage of a debt consolidation loan is that if you don’t use it properly it can get you deeper into financial difficulty. There is a saying that you can’t borrow your way out of debt and this is very true. You should examine your financial situation carefully and make sure that your situation has improved so that you will be able to handle the payments on your new loan or you could wind up damaging your credit further and making credit repair even more difficult down the road.

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