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Credit Problem Summary

Are you haunted by your credit score? Is a bad credit mortgage loan or a bad credit auto loan all you qualify for? Credit ratings are used to evaluate your creditworthiness. In general, bad credit car loan or bad credit mortgage lenders look at the amount of debt you carry, your ability to repay it and your history. If you have a history of making late payments, or more serious problems such as a court judgment against you or a personal bankruptcy, a lender may consider you to have a very high risk of default and may choose not to lend you money, or only qualify you for a bad credit loan. Generally, the more debt you have, the higher risk category you are assigned. A bad credit rating can cost you thousands of dollars per year.

You need to fix your credit report if you are among the thousands of consumers who are turned down (or charged excessively) each year for loans, employment or housing opportunities due to inaccurate information reported by a credit bureau.

The Fair Credit Reporting Act is a federal statute, enacted in 1970 to protect the rights of consumers, and regulate the practices of those who provide information to a credit repository, the credit repositories themselves and credit report users. The FCRA allows credit report repair, and states that a consumer can make a legal claim against, and sue the credit reporting agencies, creditors and debt collectors who report information that is wrong.

If you are hopelessly in debt, or simply dealing with a bad credit report, you need credit help. Let's deal with these areas separately. Your financial condition will only get worse unless you become proactive in protecting and/or rebuilding your credit standing.

If debt is the problem, you must begin with getting the debt under control, and then work on the credit report.

Mortgages and personal loans are not the only places you will pay for needing debt help. Insurance companies and lenders use your credit score in determining your policy rate or the interest rate of your loan. Along with your claims history, insurers see a bad credit rating as a sign that you are more likely to claim damages. If you plan to buy a car, a bad credit rating could rev up your interest rate to over 200 percent more than that of a person with perfect credit. A persistent history of missing credit card payments could also impact your job prospects, as some employers check the credit rating of applicants. In many cases, those with bad credit are denied housing, utilities and insurance. You must stop the financial hemorrhaging; take control.

It should go without saying, to improve your credit problem, you must have household income. You must find and/or keep the most suitable employment. You may need to work two jobs. You might consider selling anything you don't really need, especially if you are paying to have it stored. Live within your means - don't spend more than you bring home.

Once you have set aside some cash, it's time for debt relief or other debt solution. The first step is to pay off or settle as many outstanding debts as possible. Then, reduce, and keep, your balance on all revolving credit accounts to below 45% of your gross earnings. This will demonstrate that you do not live on credit, and have planned for possible unforeseen needs of that available credit.

Here are some facts about radical debt reduction alternatives. Be careful of each.

Consumer Credit Counseling: A credit counseling plan does not erase your credit history. Your creditors will continue to report information about accounts that are handled through a credit help plan. For example, creditors may report that an account is in counseling, that payments may have been late or missed altogether, or that there are write-offs or other concessions. Under the Fair Credit Reporting Act, accurate information about your accounts can stay on your credit report for up to seven years, that's seven years after your last payment on each account. A demonstrated pattern of timely payments will help you obtain credit in the future.
Bankruptcy: Many people do not understand all of the consequences when filing bankruptcy. Bankruptcy attorneys will often try to convince you that there are minimal consequences associated with bankruptcy. The reality is that bankruptcy has consequences far beyond your credit report. Federal Law requires you to disclose the filing of bankruptcy, regardless of the timeframe, when asked on any future employment application, loan application, mortgage application and numerous other documents you may be required to fill out in the future.
Debt Counseling: If you have cash, you may be able to negotiate with debt collection agents to accept a lump sum payment for less than the actual balance due. In order to obtain a favorable settlement, it typically must be paid in full within 10 days of reaching an agreement. Some creditors refer to debt settlement as debt forgiveness, settlement in compromise, or a negotiated settlement. Any amount of debt forgiven is normally reported to the IRS, so that you pay income taxes on that amount. Using a debt counseling service to help you through debt settlement is looked upon more favorably than filing bankruptcy.

If your debt is under control and a bad credit report is your problem, then it is time for repair and restoration, for clean credit.

While the FCRA was enacted to protect the creditor from unscrupulous credit reporting, it provides loopholes that allows credit repair. lt is your legal right to dispute incorrect, outdated and misleading information in your credit file. when you dispute the records, it is the credit bureau's responsibility to verify said record within thirty days, or to remove it, whether truly valid or not. Even with all of today's technology, some information can't be timely verified, and must be removed.

Once you have challenged every possible negative item within your report with the bureaus, it is time to deal directly with lenders reporting the information. You may be able to negotiate with lenders to report more favorable information. Consider adding a 100 word statement to any negative iten within your file. You may be able to have certain lenders that have failed to report your good histories to begin adding positive account histories.

While credit repair can be a do-it-yourself project, it is time consuming and tedious. Restoring your own credit is like repairing your own transmission or representing yourself in court; it is possible, but you must decide if you're willing to take the time and assume the risks of doing it yourself. RMCN Credit Services specializes in credit repair, restoration and education.

Once you have taken the above steps to reduce debt, and clean up your credit, it is time to start rebuilding your credit.

This may sound contradictory, but the best credit help is to obtain credit. There are lenders that will grant credit to high risk consumers. Once you have a credit card, your proper use is reported to the credit bureaus. Secured credit cards are a good way to build credit. Be careful not to fall victim to certain programs that charge application fees, a high annual fee, and monthly participation fees.

Additional information is located on these pages:

Charge Off - How creditor "charge offs" affect consumer credit scores.
Credit Score - Understanding credit scores is critical for almost all consumers in today's marketplace.
What is a credit report? - Your credit report is a public view of your credit worthiness.

Credit Problem Summary

RMCN Credit Services

1611 Wilmeth Road, Suite B

McKinney TX 75069

(972) 529-0900 Office (972) 562-0225 Fax

Toll Free (888) 4-MY-REPAIR

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