Repair Credit Score

Archive for December, 2009

Bad credit is a common problem. If you have bad credit, where can you borrow money? Are there credit cards for people with very bad credit problems? The good news is there are credit cards for people with very bad credit. The bad news is these credit cards for people with very bad credit tend to have very unfavorable terms such as very high interest rates and fees. The default rates on these credit cards for people with very bad credit are also high when compared to regular credit cards. If you really don't need the credit cards, it is best to repair your credit and repair your Credit Score before you apply for a credit card. The terms of your credit card will be much more reasonable.

Beware of credit cards companies that offer credit cards for people with very bad credit. These companies tend to capitalize on the need of people with bad credit by slapping unreasonable terms on the cards and excessively high interest rates on credit cards for people with very bad credit.

Things that come with credit cards for people with very bad credit to watch out for:

• High interest rates
• Account set up fees
• Annual fees
• Monthly fees

These are the fees the credit card companies put in credit cards for people with very bad credit to lower their risk of lending. Unless you need the credit cards for people with very bad credit for emergency sitiatuion, it is best to skip applying for credit cards for people with very bad credit. You will be safer and happier in the long run. You can always repair your credit then apply for a favorable rate.

Can I sue credit bureaus?

Sometimes you may request reinvestigation of an incorrect item and the credit agency fails to reinvestigate or leaves the incorrect item on your report despite a reinvestigation that showed it to be incorrect. If you are seriously harmed because of it (for example, you were denied a mortgage or were not hired for a job because of it), the Fair Credit Reporting Act gives you the right to sue the credit agency.

What time frame do I have to sue the credit agency?

You have two years after you are harmed by a credit agency's willful or negligent failure to comply with the law to file a lawsuit against them. Your lawsuit can ask for:

• expenses you have incurred because of the error, such as lost wages, attorney's fees, court costs
• emotional distress you have suffered
• punitive damages for malicious acts by the agency against you.

You may also sue a credit reporting agency that:

• refuses to disclose your credit information to you
• gives false information about you
• breaks the rules about who they may give your Credit Report to

You may also sue a creditor who fails to correct billing errors.

What laws are involved when suing credit bureaus and creditors for wrongdoing?

The laws discussed here are federal laws. Many states have their own laws about creditors and credit reporting agencies. You can also bring a lawsuit under your state law if you meet the requirements set forth in the law. You will need to consult an attorney who is experienced in this area of law. Contact your local
county, city, or state bar association for the name of an attorney experienced in these matters in your area. Many attorneys will handle these types of cases with little or no cash up front and will take a percentage of what you win (called a contingency).

Question: Im working on repairing my credit. I got a copy of my Credit Report and managed to pay off most of my debts.?

After this last payment I will only have one negative thing on my report. I heard that applying for a secured credit card is the way to go? How long does it take for my score to improve after paying the debts off? Should I wait to apply for a card? Or does anyone know an easier way to improving my score after paying my debts? My Credit Score is around 550. Any advice is greatly appreciated...

Answer: Ok, here's the DEAL. First you should know what makes up your score:

1. Payment history- 35%
2. Total debt owed to available credit ratio-30%
3. Length of time establishing credit-15%
4. Types of credit established-10%
5. Inquiries and New accounts-10%

Ok, with that out the way, let's focus on what you've done, and what you're planning on doing. Ok, it was good that you paid off the debts, but what would've been better would have been you negotiating a deletion payment, which is a payment in return for removing it from your report. Even though it's paid, it's still a collection account, which has already tanked your score. If you're going to pay, make it count. By getting a deletion payment, it's as if the collection never happened, which will give you a better chance at raising your score. You have one more thing and hopefully you can do it with that. Here's some links that explain it more in detail:

http://www.creditinfocenter.com/debt/settle_debts.shtml

http://www.creditinfocenter.com/debt/neg_rating_after_settle.shtml

http://www.creditinfocenter.com/debt/CanCreditorSue4SettlementDifferences.shtml

http://www.creditinfocenter.com/debt/ActualDebtSuccesses.shtml

http://www.creditinfocenter.com/debt/debt-negotiation.php

As for the secured card, you're exactly right. A "secured card" is easier to get than a regular card, mainly because a collateral deposit is placed upfront. But the major advantage that a secured card has over ANY other card is the ability to increase the credit limit which is important because 30% of your score is based on how much available credit you have versus how much you're using. Higher credit scores usually have credit cards with high limits because of this. A secured card gives you that flexibility even when your score is low. If you have a substantial amount of money, you could "custom build" a high limit credit card, which would definitely help your score. Since most of the cards, or the major ones at least don't report as "secured" no one could tell the difference. Also, the deposit later on can double as a start up for an emergency fund once the card converts to a regular card and the deposit is given back. In addition to a unsecured card with a high limit, the leftover deposit could be used as an emergency fund as well!

I posted links to several companies that should help. From my personal experience, I've found that Bank of America offers the best secured card overall

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