There is so much information out there about credit repair and debt consolidation that the average consumer can Google search the subject and still be left at the end of the day, wondering what really works. Well here it is straight from the horse’s mouth. I’ve spent the last decade working with consumers in the credit industry and can share with you the most common misconceptions in credit that most people don’t understand.
First let’s begin with this idea that credit repair organizations are some sort of scam shop because they do what the average consumer can do on their own. Yes it’s true you can go and do the same thing a credit repair organization does, however from my experience this isn’t why people hire a credit repair company. It’s because they don’t have the time or the knowledge to be bothered with it all, and most importantly they want it to be done right. If you were charged with a crime you didn’t do, would you represent yourself in court? You certainly could if you wanted to but you would probably hire an attorney if you could afford to do so. Just like hiring an attorney or choosing to represent yourself, most people would rather have a professional who works in that industry and handles that type of situation every day to work on their behalf. Credit repair organizations specialize in knowing what the laws state pertaining to credit, how credit scores are calculated and generated.
Your credit repair company should be able to assist you with obtaining the credit of your dreams and know the steps on how to do this. This is why people would rather pay to have them fix their credit and rebuild. Now with that being said, there are many credit repair organizations that mislead individuals by making false promises to consumers, for example a credit repair organization can’t promise that items that belong on your credit will be removed from your credit history. The Law only allows you to have items not belonging to you removed from your credit report. Before I go too far into what you can and can’t have removed from your credit history, I would advise having a professional look at your credit history and tell you what is being reported inaccurately.
With all that being said, I want you to understand that no matter what is deleted from your credit report the fastest way of raising your score is keeping your oldest credit accounts open and paying down the balance below 8% of your credit limit. This is the true key to having a good credit score. Most people believe that their credit score is low because of some factoring accounts, when in fact it’s low because they failed to ever establish any real credit in the first place. They never had any accounts opened for any substantial amount of time that was reported on time each month. We’re not just talking car loans or your mortgage whereas those are installment accounts that will raise your debt to credit ratio in most cases. You need to show that someone gave you a line of credit, like a credit card, and you paid it on time every month and you didn’t charge it to its limit, it’s the available credit that’s going to show that although you have the ability to spend more you are responsible and conservative towards your available credit.
Most people fall into one of these two scenarios:
Scenario 1:
You have bad credit because of an automobile repossession or late payments, broken leases, hospital bills or some utility bills. Your credit is so easily fixable.
The secrets to raising your credit score is in your ability to manage the accounts that you currently have open, so if your looking at your credit history and you don’t have any open accounts then your credit isn’t going to go up until there is something open for you to be judged by, 35% of your credit score is based on your payment history with your current accounts. I’ve found that most people seeking credit help, never even had a credit card, but have negative accounts that are in collections. If you are one of these people you need to not only get rid off your bad debt but open a secured credit card or some line of credit so other creditors can see that you now can keep up with a payment schedule. This in most cases for consumers in these situations is the single most important step to repairing there credit. Getting a little professional help can help you get rid of some of those old collection accounts and can guide you to who can give you a second chance to rebuild your credit with credit.
Scenario 2:
You have thousands of dollars in bad debt that you are struggling to pay, and had several lines of credit in the past.
Your accounts can be settled for 50% of what you owe.You must gain control over any accounts you still have open first, accounts that have already gone to collections need only to be settled. Those accounts have been sold from the original creditor and will negatively affect your credit history with you making regular payments. You will benefit the most from hiring a professional to review your credit profile because there are a number of things that can be done that will save you tons of money and get you back on track faster than just simply making your regular statements each month. There are many factors that go into your credit and many of these factors though they may seem like the right thing to do, can have a negative affect on your credit report.
To obtain more information on how to get your credit on track or simply have a credit counselor consult with you for free call 1-281-889-6033 or visit us online at http://www.AfirstCredit.com and we’d be more than happy to assist you. Happy Holidays!
