How to Get Help with Credit Repair Services

Many people have a problem controlling their credit card spending habits. As such, many people have a lot of credit card debt and thus, have financial problems because of it. Because of this constantly increasing debt, many people are late making payments, have charge-offs, and/or fail to pay a bill altogether. These practices lead to the destruction of a person's credit report and ultimately negatively affect a person's credit score. Most negative credit report information takes anywhere between seven (7) to ten (10) years to be removed from your credit report. However, a credit repair service can help you overcome these problems and put you on the fast track to credit report recovery.

Speaking from personal experience, credit repair companies can help you restore your credit report. When I was in college, I made the mistake of obtaining credit cards regardless of the terms attached to the same. As such, I ended up with numerous credits with ridiculous annual fees and very high interest rates. Additionally, because I lacked the knowledge on how to correctly use credit cards, I used my credit cards like a second bank account. Needless to say, my debts caught up with me, and I was soon in financial trouble.

The good news was that I was young enough to learn a lesson from my experience. However, the bad news was that my credit report was left in shambles. I did not want to wait the seven (7) to ten (10) years it normally takes for negative information to be removed. As such, I asked around and received a referral from a friend for a credit repair company.

Credit repair companies dispute the negative information in your credit report by using the law of the Fair Credit Reporting Act. Basically, if negative information in your credit report cannot be "verified" it must, by law, be removed from your credit file. Credit repair agencies use this federal law to basically exploit the fact that credit card companies usually do not keep exact records. As such, many times the negative information in your credit report cannot be verified and thus, it must be removed.

Credit repair companies can help, but you have to be aware of certain things. First, there will be a fee for their services. However, you should not pay too much money (no more than a couple of hundred dollars, depending on how much negative information is in your credit report). Also, you have to be patient. Depending on how much negative information is in your credit report, the entire process could take a year or more. This is so because by law, the credit reporting bureaus (TransUnion, Equifax, and Experian) have up to thirty (30) days to respond to your dispute. Additionally, you may have to dispute some information more than once. As such, the timeline gets longer.

If you have negative information in your credit report, credit repair services is an option that you should consider. However, do not pay too much, be patient, and keep your credit repair company aware of any correspondences you get from any credit card company or any of the credit reporting bureaus.

Tips for Obtaining Credit Cards With Bad Credit

If you have bad credit, you probably should not be obtaining a credit card. As is evident by your credit score, you have gotten in trouble with debt in the past and may not have acquired the education necessary to avoid this trap again in the future. That being said, if you are adamant about obtaining a credit card for whatever your reason, there are some things you should know.

First and foremost, because you have bead credit, you are in a weaker bargaining position. As such, you may have to accept some terms on your credit card that you should not ordinarily accept. One such term is a high interest rate. However, this does not mean that you should pay the highest interest rate possible. If the credit card you are looking at has an interest rate at twenty percent (20%) of higher, walk away from the credit card offer. Regardless of the level of your need for a credit card, obtaining a card at twenty percent (20%) interest or more, even with bad credit, is pure lunacy. If you were to make a purchase with such a card, absent you paying off the outstanding balance once the bill arrived, you would be throwing money away.

Another concession you may have to make, and not a bad one at that, is that you may have to settle for a card with a lower credit line. Based upon the severity of the negative information in your credit report and your credit score, you may be approved for something as small as a three hundred dollar ($300) credit line. This is a very small credit line that probably will not do much for your situation, but the good news is that such a small credit line will also help protect against you accumulating too much debt.

Regardless of how low your credit score is and how much negative information is in your credit report, you should always avoid secured credit cards. Secured credit cards are basically credit-debit cards. With secured credit cards, you have to deposit a certain sum of money with the bank (for example, $500) that issued the credit card. This deposit becomes your credit line and you charge purchases based upon your deposit. However, instead of paying off the purchase from your deposit, the bank sends you a bill. Your deposit money simply sits there, not collecting interest and not helping your situation. Additionally, secured credit cards usually have ridiculous fees (such as account set-up fees, annual fees, program fees, and account maintenance fees, to name a few), which do nothing but cost you money, and extremely high interest rates. The bottom lines is that even though secured credit cards may help to rebuild your credit, because of the enormous amount of fees and the extremely high interest rates, it may be better for you to wait the seven (7) to ten (10) years it takes for negative information to be removed from your credit report instead of getting the secured credit card.

If you have bad credit, know that you may have to pay a higher interest rate and may have a lower credit line. However, you should stay clear of secured credit cards because the small benefit your credit report receives from using such a card does not make up for the enormous amount of money that these cards cost.

How to Get a Credit Card in a Tight Credit Market

Getting a credit card in a good economy is a very easy task. In a good economy, companies will extend you credit even if you have a poor credit score. The credit these companies extend will not be good (i.e., the credit card will have numerous fees and an extremely high interest rate), but these companies will still be willing to hand out credit cards. However, in a down economy, credit cards are not as easy to come by.

Companies are less likely to overlook credit score mishaps when evaluating whether to approve you for a credit card. Due to this fact, how do you get a credit card in a tight credit market?

The simplest and most obvious answer to this question is to repair your credit if you have bad credit. Repairing your credit will not only enable you to have a better chance of obtaining credit in a tight credit market, it will also help you in the long run to obtain a loan for a big purchase (e.g., a home, car, etc.) and/or a big event (e.g., a wedding, college education, etc.). As such, cleaning up your credit is one of the best things you can do for your financial future. Coincidentally, repairing your credit will also help you get a credit card in a down economy.

Another way to obtain a credit card in a tight credit market is to shop around at various banks, banking institutions, and financial institutions. Even if the general consensus is that the credit market as a whole is "tight," this does not mean that every credit granting institution is cutting back or otherwise curtailing their credit card business. You may have to look to uncommon banks or financial institutions, but you should be able to find a company that is willing to give you a credit card.

Talking to banks with which you already have a relationship can also help you get a credit card in a tight credit market. In a down economy, banks are more willing to extend credit to customers that have an established track record with that bank. However, this does not mean that new customers have no options. Banks will often offer new customers a deal (such as offering a credit card when that person opens a checking account) to entice such customers into becoming long term clients.

There are many things you can do to get a credit card in a tight credit market. It is important, however, to note that you should not settle for a bad credit card merely because the credit market is "tight." If you are in the market for a credit card and it does not seem that any good credit terms exist on any credit card offers you have investigated, you should reevaluate your need for a credit card at that particular moment. If your credit issues are more of a "want" than a "need," wait until things get better before getting a credit card. If, however, the opposite is true, make sure you pick the better of the two evils.

Can Applying for Loans Bring Down Your Credit Score?

A credit score has many components. Each component weighs differently on your credit score. For example, having a late payment recorded on your credit report will cause more damage to your credit score than will having too many inquiries on your credit report. However, it is important to know that regardless of what the negative information is, such information will stay on your credit report for many years. As such, you will want to weigh the consequences of the negative impact on your credit score against the advantage of applying for and obtaining a loan.

Applying for a loan can negatively impact your credit score in more than one way. First and foremost, whenever you apply for a loan (whether it is for a house, a car, a student loan, a personal loan, etc.) the bank or lending institution to which you applied is going to run a credit check on you to calculate the risk involved in lending you the money. The riskier you are, the higher your interest rates and/or fees will be. If you are too risky, you will be denied a loan.

When the bank or lending institution conducts a credit report check to calculate the risk level involved, each check is recorded as an "inquiry" on your credit report. Banks and lending institutions look to see how many inquires are on your credit report for a set period of time. If you have "too many" inquiries, this tells the bank or lending institution that you are trying to borrow money and thus, this means that you are acquiring or attempting to acquire a lot of debt. As such, you may not have the money to pay back a loan. Therefore, this makes you a risky loan and you will either have to pay more interest and fees or will be denied outright.

However, even though these inquiries are recorded on your credit report, this does not mean that every one of them negatively affects you credit score. The key is not to get "too many." The exact number that crosses the "too many" threshold is not exact, but to be on the safe side, you should try to keep the inquiries to no more than 3 per year. Remember, every time that you apply for a credit card or any type of loan, an inquiry is recorded on your credit report.

The other way that applying for a loan can damage your credit score is if you are approved for the loan. If you are approved for a loan, it will affect your credit to debt ratio. If you get a loan, this will create more debt. The closer you are to "maxing out" your credit limits, the worse off your credit score will be. The reason for this is because if you have no available credit, banks and lending institutions will be concerned that you have reached your limits and will have trouble paying off your debt. As such, there is a higher chance that you will default and thus, a higher chance that the bank or lending institution will not get paid.

As stated above, because of these negatives, you have to weigh the cost of getting a loan against the benefits of obtaining the same. Make sure you are applying for and receiving a loan for a good purpose (buying a home that you can afford, getting a college education, making a good investment) and are not obtaining a loan for something you do not need.

How I Raised my Credit Score

About two years ago (October of 2005) my credit score was in the 620s. In case you are wondering, a score of 620 is not particularly good. In fact, it is a bad credit score. Today, my credit score is over 740. A score of 740 ranks in the top tier of creditworthiness. How did I raise my credit score over 100 points in less than two years? Before I answer this question, I need to give you a little background information.

My credit score was low because I had late payments on my credit report. Late payments can stay on a credit report for up to 7 years. I did not want to wait 7 years because I had plans for certain types of investments. These investments required a decent credit score, and thus, I needed to find a solution.

First, I obtained a copy of my credit report. I noticed that some of the negative accounts on my credit report were not even mine. One of the negative accounts was opened when I was 6 years old. I called the credit card company and asked them when the started giving out credit cards to children in the first grade. The stunned silence on the phone proved to me that they got the point. The negative accounts that were not mine were removed from my credit report. This increased my credit score.

Second, I got a referral from my real estate teacher for a company that will fix a credit report. I called the company, paid a small fee, and followed the instructions that they gave me. Basically, I was told to continue to pay my outstanding balances in a timely manner and to refrain from using and applying for any credit cards. The company would contact the credit reporting companies and dispute any negative information on my credit report. Less than two years later (which is far better than 7 years) I sit with a score of over 740.

If this plan of action does not work for you, you can always pay your cards on time, reduce your outstanding balance, and wait for any negative information to be removed from your credit report. The choice is up to you.