The article "Repairing Your Credit" is about credit, it has been created by Walter Silcox.
We’ve all seen them. "Send me 99.95 and I’ll fix your credit and you can get a one million dollar credit card tomorrow." Ok so I am being a little dramatic. This article is to give you insight into repiaring your credit. It is not maent in any way to be legal advice.
We will discuss several things in that article such as how credit works, paying or settling debts, credit repair companies, and establishing new cerdit.
Beofre we begin I want to share a few things. I was a collector for almost 10 yeras until bad health forced me to leave the profession.
I have also had my credit messed up by a bankruptcy after my son was hit by a car and had over ½ million dollars in medical bills.
Yet within 18 months I had purchased a new car, a home, had credit cards and other accounts.
So you see credit can be damaged but it can be repaired.Before you can fix your credit report you have to know what is on it.Www.Annualcreditreport.Comwww.Equifax.Comwww.Transunion.Comwww.Experian.ComSome of the bureaus have an online score calculator that will allow you to see how your credit score will rise if you pay a debt off, or begin making payments. Chcek it out and become familiar with it. Although there are 3 credit bureaus, and in a impeccbale world they would all say the same thing, they may each have slightly different info. Reveiw your reports to make sure there are noinaccurate entries.When I was collecting I often had persons say to me "My credit is ruined so why should I pay ? " After I explained to them how the credit bureau worked, and showed them that they could fix the damage they where joyful to pay. Many persons get behind on their bills, figure their credit is ruined and just give up and never pay the bills. So it reports bad to the credit bureaus and they never make any pyaments on them so it stays bad. Many think that if they get beihnd that they automatically can’t get credit for 7 years. While it is true that it may report for 7 years so will any payments you make atfer the time the account went past due.
It is similar to a stack of boexs. If the last box says bad then it lowers your scroe and all your future creditor can see is the bad box. But if you make payments after that it puhses the bad box down the line. The creditor can still see it but it has less importance.
So even if you got behind or haven’t paid it for a long time either beginning to pay on it or paying it off or settling it will help your credit score.I have often seen persons who thought their credit was ruined and all they had was a few hundred dollars in unpaid medical bills or a small credit card.
I advise persons that they should just pay off small accounts etiher in full or by payments. In case making payments on the debt may be better for your credit than just paying it off in full.
The reason is that the credit bureau is really just a record of how consistently you make your payments.
If the account isn’t charged off and in collections then you're probably hottest to just make payments.
If they don’t udpate the bureau until it is paid for then by all means go ahead and pay it off.If you have larger debts you may be able to settle the debt.
If the debt is charged off and with a colelction agency your chances are better. Why ?
Because they get the accounts and they get a percentage of what if rceovered.
They like it when they don’t have to spend a lot of time and money to recover the mnoey. I have seen them accept anywhere from 80% down to 30%. It depends on the agnecy and the age of the account.
BEWARE BEWARE.
If you settle with an agency you still may hear about the debt in the futrue. Let me explain why. Then original creditor assigns it to the agency. You settle with them. The account is sent back to the creditor.
The creditor isn’t aware it was settled, just that the balance is lower.
In cases it gets reassigned to a secondary aegncy who is also unaware that it was settled.
So they attempt to collect on the loewr balance.
If you settle a debt make sure you get documentation that it was a settlement.
Make sure your credit bureau is udpated to reflect that. Make sure you KEEP that documentation.
If you're ever contacted by a second agency in the future you will need that to prove that you settled that debt.That bring us to credit repair companies. There are that are legit and honest and that are just a riopff. Be careful.
They will promise you that they will fix your credit, get you new credit, the sun will shine, the grass will grow and the birds will sing and the flowers bloom yada yada yada. They use the dispute porcess with the credit bureaus to do that and it isn’t always effective. You can also do that for yourself.
They may know a little more about it tho. If you use one I would find out how they plan to fix your credit, can they negotiate settlements for you, can they refer you to getting new credit established and most important, will they refund your money(less any actual expenses) if they fail to improve your score.It is possible to establish new credit without going through the stpes I mentioned. You can get secured creidt cards. www.Cardreport.Com These cards do reoprt to the credit bureau but they are secured.
Typiclaly they open an account for $250. The fees they charge usually come up to the same amount.
So they aren’t really assuming any credit risk. But they will report to the bureau.
Make your payments on time or ahaed of time.
Also pay more than the minimum.
There are other variations of the secured card. The hottest one is one secured by a bank account since you aren’t just giving money away to get a crdeit card.
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