If you are among the millions of Americans who are
drowning in credit card debt or facing foreclosure, there is one thing you need
to know.....there is light at the end of the tunnel. You can rebuild you credit
and get back on your feet!
Newspapers, radio, TV and the internet are filled
with ads that promise to erase all negative information in your credit
report in exchange, of course, for a fee. Companies, marketers, attorney
affiliated individuals, attorneys, books, etc., boast about their savvy or
legal credit repair services.
However, the truth is the scam artists who run
these ads not only don't deliver, they can't deliver. Moreover, the law prohibits credit repair
companies from charging up-front fees before performing the promised services.
Credit repair companies normally advertise
something like:
"We work with
specialized companies that will repair your credit"
"We can increase your
credit score in 30 days - guaranteed!"
"Credit problems? No
problem!"
"We can erase your
bad credit - 100% guaranteed"
"Create a new credit
identity - Legally"
"We can remove
bankruptcies, judgments, liens, and bad loans from your credit file forever!"
Once you contact them, they normally:
Want you to pay for
their credit repair services before any services are rendered (under the
"Credit Repair Organization Act", a credit repair company cannot charge you
until they have completed the promised services)
Don't tell you your
legal rights and what you can do yourself - for free
Suggest that you
try to invent a "new" credit report by applying for an Employer
Identification Number (EIN) instead of your Social Security Number (SSN)
Advice you to dispute
all negative information in your credit report
Regardless of what these individuals tell
you, it is a federal crime to make
false statements on a loan or credit application, to misrepresent your
SSN, and to obtain an EIN from the IRS under false
pretenses. If you follow illegal advice and commit fraud, you may be subject to
prosecution. You could be charged and prosecuted for mail or wire fraud.
So, you can do either one of two
things: you can throw away your money and be scammed by a credit repair company or you can learn how to repair your own credit.
Understand, however, raising your credit score is a bit like losing weight.
Only time, a deliberate effort, a plan to repay your bills, and the steps shown
here will improve your credit. There are no quick fixes. In fact, quick-fixes offered by credit repair
companies can backfire.
CREDIT
REPORT vs. CREDIT SCORE:
Although many people often
interchange these terms, credit reports and credit scores are not the same
thing:
-
Credit report:It shows a
detailed description of your credit history including your identification,
employment information, open and closed accounts, existing debts you need to
satisfy, accounts in positive and negative standing, inquiries, public records
(e.g.: bankruptcies, foreclosures, tax liens, etc) and more.
-
Credit Score:It is the
actual number calculated from your credit history. Your credit score is your
financial GPA. The details from your credit report are used as data points in a
mathematical equation; the resulting score is primarily used to help lenders
determine how much interest to charge you.
USING YOUR CREDIT SCORE:
The higher your credit score is; the more
financially responsible you appear to lenders; thus, making you eligible for a
low interest rate.
Moreover, credit reporting companies also sell the information in
your report to insurance companies, employers, and other businesses with a
legitimate need for it. For example, employers can use the information to
evaluate your application employment or a promotion; a landlord can use it to
consider you as a tenant; and insurance companies can use it to determine on
what terms they will approve your insurance policy.
As you can see, a good credit score is very
important to get ahead in life but be cautious not to let the obsession of
always having a high credit score ruin your life.
We care about you. To all our readers and clients
who need to drive in bad weather conditions:
- Drive slowly. Everything takes
longer on snow-covered roads. Accelerating, stopping, and turning -
nothing happens as quickly as on dry pavement. Give yourself time to
maneuver by driving slowly.
- The normal dry pavement following
distance of three to four seconds should be increased to eight
to ten seconds. This increased margin of safety will provide the longer
distance needed if you have to stop.