Your credit score is important. It is calculated based upon entries in your credit histories, entries that can include everything from a successful timely instalment payment on the positive side to a late payment on a credit card. The important of each entry reduces until after seven years they disappear completely. In the case of bankruptcy that remains in your history for ten years though the likelihood is that your debts will have been written off.
There are many claims from companies that they can guarantee that bad credit entries will disappear; even that you can legally obtain a completely new credit identity. It is certainly a tempting offer for those with ongoing financial problems but it is important to understand what can be done in reality and what cannot be done. If you can repair your credit it will certainly make life less stressful. However it is essential that you realize that some of the claims that such companies make are in reality scams.
There are a few things to look out for. If you are told to apply for a new Employer Identification Number from the IRS and then use it to apply for credit you are in fact hiding your identity which is in fact illegal. Likewise identity theft is increasingly common; applying for credit using someone else’s details, once again illegal. To be fair companies suggesting such things are in the minority. It is more likely that a company will offer a service incorporating your providing them with credit reports from the major agencies and then recommending entries that you should dispute. The company may do this on your behalf but it is hardly a service that can guarantee that suddenly you are trouble free overnight.
You can do all this yourself without paying a company to do it for you. The agencies have a statutory obligation to respond to requests and delete things that can be proved to be inaccurate. The question must be asked why bother to pay for a service you can easily do yourself? You may be deferential, you may believe such companies have some powers that you do not have, or simply don’t feel confident enough to do this.
In reality you are wasting money, money that you probably don’t have to waste. The Consumer Financial Protection Bureau is there to help you and if you have a little money to help the process an attorney dealing in consumer law is a better investment if you feel you are being treated unfairly.
There is plenty of free information online that you can research to find out more about your rights as well. That includes the Credit Repair Organizations Act which ensures you can get a copy of the “Consumer Credit File Rights under State and Federal Law.” It spells out your rights and the responsibility of any company offering a service at a price.
Modern Day Lenders
If there is nothing much you can do at the present time about your credit score that does not mean that you will be unable to obtain finance however. Modern day online realisticloans lenders tend to look at affordability when considering an application and place that as more important than history. If you can demonstrate that you have a regular income and the monthly instalment repayments are manageable then you are likely to be accepted. It is obviously stupid to take out more debt without a strategy. The point is that you can pay off liabilities that are incurring a high rate of interest, typically credit card balances, by taking out a personal loan which will have a far better interest rate applied. Such a consolidation loan will end creditors chasing you because they will be paid off. One monthly payment can replace liabilities and every successful instalment paid will have a positive impact on your credit history and hence your credit score.
In time your credit score can rise to a level where you have effectively restored your financial help. It will need self-discipline and determination but it can happen. Then you would not need a ‘credit repair’ company anyway.