Credit Repair
2287 Second St, Livermore, CA 94550
(888) 641-8803
Do you have a bad credit rating and are not sure how it happened? You are not alone. Possibly millions of Australians have a bad credit rating, and many of us are unaware we have black marks against our name until we apply for credit and are flatly refused.
What is a bad credit rating?
A bad credit rating is generally defined as a credit file which contains one or more adverse listings such as a default, writ, judgement or bankruptcy.
Most of these listings can make it very difficult for us to obtain credit for 5 years for defaults and up to 7 years for bankruptcy. This affects many major areas of our life such as buying homes, taking out personal loans for vehicles, business loans and in many cases even credit cards and mobile phone plans.
Currently most of the major banks are rejecting home loan applications where the credit history shows a default listing (an overdue account which has lapsed past 60 days). Many lenders are even rejecting loans for excess credit enquiries such as two in thirty days or six within the year.
What if my black mark shouldn't be there?
There are over 14 million credit files for 'credit active' people, held by the major credit reporting agencies in Australia; Veda Advantage, Dun & Bradstreet, Tasmanian Collection Service. Over 30% of these credit files could potentially contain errors.
In 2004 the Australian Consumer Association (now Choice) conducted a survey which revealed 34% of the credit files of the people surveyed possibly contained errors.
Most people who query creditors and credit reporting agencies about their bad credit rating - particularly one where they have a default listing, are told that the listing cannot be removed, but can be marked as 'Paid' if the account was settled.
This is often not good enough for those of us who need to use credit over the next 5 years (which is almost everyone nowadays).
How do I repair my credit rating?
If our credit report contains a default, writ or Judgment which has errors, is unjust or we believe just shouldn't be there - it is recommended we refer our case to a credit repair company.
One important aspect of credit repair to remember is that we usually only get one chance at clearing our credit file.
Sometimes we can attempt to deal with creditors to remove the credit rating default ourselves and can do more harm than good by not understanding the legislation.
Credit repair is a lengthy process, involving the review of all documentation- including the credit file and all the circumstances surrounding the default, writ or Judgment.
Then the credit repairer negotiates with the creditor who initiated the listing on our behalf to remove the default.
This can also often involve lengthy requests and submissions of documentation until an agreement is reached by the creditor and the repairer to remove the offending black mark.
Not every credit file is suitable for credit repair. The credit repair company can review our situation and determine whether our case is worthy of pursuing.
It is advised to research the company and ensure they are a reputable credit repairer before we outlay any money. The best way of knowing we are dealing with a professional repairer and not a professional con artist, is to check these things:
Can we verify their street address?
Are they an American company in US?
Do they publish their costs?
Are we required to pay the full costs up front?
Do they provide testimonials from past clients?
A reputable credit repair company (the good ones) will be well worth our investment because they will be up front about what they can do for us.
You have to look at your whole situation and I could not hope to cover every situation in this article, but I have seen enough different kinds of credit situations to give you a good idea what you need to consider. Since it is well know that 75% of all credit reports contain errors, you should know that most people can benefit from some level of credit repair. But you have to look at your specific situation and try to look into the future a little before you decide what you are going to do.
If you recently had a bankruptcy discharge, credit repair will benefit you a lot. Most of the time creditors will not catch up the reporting of your accounts very quickly and you will suffer from the fact that they will be reporting your accounts incorrectly. If you dispute the accounts that you included in your bankruptcy, you will find that many of the accounts will actually be deleted from your credit report.
If you have three or four small unpaid collections recently appear on your credit report, credit repair is not necessarily the place to start. Pay off the collections. Call the creditors and negotiate with them. Get the agreement in writing before you pay them. After you have paid them off, dispute the accounts with a credit repair letter. The probably result will be deletion of the accounts since you don't owe the creditor any more. If you dispute the account before you pay it off the collector will most likely confirm the account since it is a new account.
If you have old collections and some are paid and some are not paid and you are unsure what is accurate and what is inaccurate, you should dispute them all. Even if they show no balance due, you should dispute because these accounts will most likely be deleted and that will improve your overall credit profile thus raising your credit score. This will be especially effective if you have some good credit that your credit score can be sustained by. If this is your situation but you have no good credit on your credit report, after you dispute these items, you must start building your credit. Typically a credit building credit card will do this for you quickly and easily.
If you have a lot of bad or unpaid debts that you know are reporting accurately and you have no good credit on your report, you might want to consider bankruptcy and then credit repair. If you know all these bad debts are accurate for the most part and you have 20 or 30 of them, even credit repair is going to leave you needing something else. If you will need to go bankrupt in the end, it is better to have all these items on your report when you go bankrupt so they don't come back to haunt you later on.