Mistakes Made By People With Poor Credit
You are not alone.
You have plenty of company.
There are more than 30 million people in the United States with credit blemishes severe enough (score under 620) to make obtaining loans and credit cards with reasonable terms difficult.
Payment history is the single most important factor in determining your credit score, making up 35% of the total.
Since recent history carries more weight than what happened five years ago, getting in the habit of making on-time payments.
This is a powerful way to start rebuilding your credit rating.
Likewise, delinquent payments can devastate your score.
Missing even one payment can knock 50 to 100 points off a good score.
Skipping payments for a single month on all your bills can lower your number from a respectable 707 to the dismal range of 562 to 632.
These are 4 steps that will help to improve your credit rating: 1.
Order Reports Contact the big three credit bureaus, TransUnion, Experian And Equifax and order your credit reports.
It's difficult to try to repair something if you don't know what they say about you.
Remember that all creditors don't necessarily subscribe to all three bureaus.
Toll free phone numbers are shown below to help you order your reports.
TransUnion - 800-888-4213 Experian - 888-397-3742 Equifax - 800-685-1111 Don't waste your time and money.
Order a report from each bureau.
The costs vary from state to state but normally cost less than $10.
00 each.
Also remember that if you have been denied credit, insurance or employment because of your credit report you are entitled to free copy of your report.
The company that turned you down must give you the credit bureau and contact information.
There is a time limit of 60 days after being denied to request your free copy.
2.
How to read and understand your credit report.
Interestingly, credit bureaus generate your report based on information they receive from creditors.
They DON'T verify the information.
If the bad information in your report is true, only time and improved financial habits can correct that.
Late payments and charged-off accounts remain on your report for seven years; bankruptcies for 10.
Most creditors, however, look for a pattern of payment rather than focusing on one-time or rare occurrences; so consistent on-time bill payments will improve those blemishes.
3.
Dispute and document Remember, a bad report costs you money.
So, it pays to be thorough! You can either complete the dispute form provided with your credit report or write a letter.
Clearly identify each mistake and state why it's wrong.
One constructive idea is to send a photocopy of your credit report with the errors circled to the reporting credit bureau.
Include copies of any documents that will support your case.
Document all communication with the credit bureaus.
Keep copies and records of all the forms, letters and documentation.
Make sure to date everything that you do and be sure to send it by Certified and Return Receipt Mail from your local Post Office.
Remember that the credit bureau must investigate any relevant dispute within 30 days of receiving your letter.
Any item that is not verified as accurate by a creditor is removed.
Sometimes it's necessary to contact your creditors to resolve mistakes.
Always treat the creditors with respect as you want something from them.
No matter how strongly you feel keep a lid on your temper.
The person you are speaking to is just doing their job.
Remember the old honey and vinegar saying.
If the credit bureau makes any changes to your credit file, it will send you the results and a free, updated copy of your credit report.
Once a negative item is removed from your report, the credit bureau cannot put it back on unless a creditor verifies its accuracy and completeness -- and sends you written notice.
4.
Resolve debt issues Now's the time to devise a plan that reduces your debt and allows you up to pay on time, every time.
If you're having difficulty making payments, be proactive.
Call your creditors and negotiate to keep your accounts current and from being reported as delinquent or "bad debt.
" You can ask for reduced monthly payments, or even change due dates to balance out your monthly bills.
You will be surprised how helpful companies can be when you approach them in a business like manner.
It costs them less to work with you than to pursue legal remedies.
This will be a somewhat slow process but be patient.
Good Luck!
You have plenty of company.
There are more than 30 million people in the United States with credit blemishes severe enough (score under 620) to make obtaining loans and credit cards with reasonable terms difficult.
Payment history is the single most important factor in determining your credit score, making up 35% of the total.
Since recent history carries more weight than what happened five years ago, getting in the habit of making on-time payments.
This is a powerful way to start rebuilding your credit rating.
Likewise, delinquent payments can devastate your score.
Missing even one payment can knock 50 to 100 points off a good score.
Skipping payments for a single month on all your bills can lower your number from a respectable 707 to the dismal range of 562 to 632.
These are 4 steps that will help to improve your credit rating: 1.
Order Reports Contact the big three credit bureaus, TransUnion, Experian And Equifax and order your credit reports.
It's difficult to try to repair something if you don't know what they say about you.
Remember that all creditors don't necessarily subscribe to all three bureaus.
Toll free phone numbers are shown below to help you order your reports.
TransUnion - 800-888-4213 Experian - 888-397-3742 Equifax - 800-685-1111 Don't waste your time and money.
Order a report from each bureau.
The costs vary from state to state but normally cost less than $10.
00 each.
Also remember that if you have been denied credit, insurance or employment because of your credit report you are entitled to free copy of your report.
The company that turned you down must give you the credit bureau and contact information.
There is a time limit of 60 days after being denied to request your free copy.
2.
How to read and understand your credit report.
Interestingly, credit bureaus generate your report based on information they receive from creditors.
They DON'T verify the information.
If the bad information in your report is true, only time and improved financial habits can correct that.
Late payments and charged-off accounts remain on your report for seven years; bankruptcies for 10.
Most creditors, however, look for a pattern of payment rather than focusing on one-time or rare occurrences; so consistent on-time bill payments will improve those blemishes.
3.
Dispute and document Remember, a bad report costs you money.
So, it pays to be thorough! You can either complete the dispute form provided with your credit report or write a letter.
Clearly identify each mistake and state why it's wrong.
One constructive idea is to send a photocopy of your credit report with the errors circled to the reporting credit bureau.
Include copies of any documents that will support your case.
Document all communication with the credit bureaus.
Keep copies and records of all the forms, letters and documentation.
Make sure to date everything that you do and be sure to send it by Certified and Return Receipt Mail from your local Post Office.
Remember that the credit bureau must investigate any relevant dispute within 30 days of receiving your letter.
Any item that is not verified as accurate by a creditor is removed.
Sometimes it's necessary to contact your creditors to resolve mistakes.
Always treat the creditors with respect as you want something from them.
No matter how strongly you feel keep a lid on your temper.
The person you are speaking to is just doing their job.
Remember the old honey and vinegar saying.
If the credit bureau makes any changes to your credit file, it will send you the results and a free, updated copy of your credit report.
Once a negative item is removed from your report, the credit bureau cannot put it back on unless a creditor verifies its accuracy and completeness -- and sends you written notice.
4.
Resolve debt issues Now's the time to devise a plan that reduces your debt and allows you up to pay on time, every time.
If you're having difficulty making payments, be proactive.
Call your creditors and negotiate to keep your accounts current and from being reported as delinquent or "bad debt.
" You can ask for reduced monthly payments, or even change due dates to balance out your monthly bills.
You will be surprised how helpful companies can be when you approach them in a business like manner.
It costs them less to work with you than to pursue legal remedies.
This will be a somewhat slow process but be patient.
Good Luck!
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