We all know that bad credit can harm you in more ways than one. Its hard to get a credit card and if you do, you pay higher interest rates, its almost impossible to get a mortgage or car loan, your insurance premiums are higher than those of people with better credit, and so on. Even your job search can be negatively impacted because prospective employers look at your credit score to determine how responsible and how good a manager you are. And in positions where you handle sensitive financial information, a bad credit score might mean you are struggling financially, which might make you more likely to commit fraud.
This is hardly news, as the cost of bad credit has long been documented. But what many people underestimate is that the cost of a thin credit file is also high. Simply put, having what the credit industry calls a thin credit file is not a good thing, although not as burdensome as bad credit. As the name suggests a thin file is a file that contains very little information about your credit history. To understand how this can hurt you, lets revisit the formula on which your credit score is based. The following parameters come into play:
*Payment history: 35 percent of your score *Outstanding debt: 30 percent of your score *Length of credit history: 15 percent of your score *Inquiries
Questions like these are common. Poor credit scores affect millions of people in this country and in an economic climate where even people with average credit are having a rough time getting financing, people with bad credit are finding themselves being left out of the credit game entirely. Naturally, they begin inquiring about what can be done other than biding their time for years waiting for the negative items in their credit reports to age and eventually fall off.
The answers people get in response to these questions are typically disheartening. Most of the time, they are simply told they will have to wait. Wait 7 years for most negative listings and a decade or more for a bankruptcy. And to make matters worse, the people answering these questions also tend to throw in unnecessary jabs like, "that's what you get for being careless" or "you should have thought of that before you acted irresponsibly".
This is sad because what most people don't realize is that so many people with bad credit don't deserve it. They are merely a victim of circumstance and in many cases, a circumstance that is practically unavoidable.
The number one cause of bankruptcy in America is fallout from a medical emergency or illness and while you can argue that insurance and preventative care will keep these situations from ruining a person financially, that is not always the case. Complications from unforeseen gaps in insurance coverage and billing errors can end up making you have to pay much more out of pocket than expected and when coupled with the loss of wages or employment that can go along with an illness or injury, these expenses can lead even the most responsible people down the road to bankruptcy.
Fortunately, for many people, not all hope is lost. Regardless of what most people believe, it is possible to dispute and permanently remove any type of item from a credit report, including a bankruptcy. The law gives consumers the right to dispute any item on their credit reports that they feel is inaccurate or misleading. The law gives people who are being unfairly labeled as a a credit risk the opportunity to work to correct their credit score.
This process of working to remove questionable negative items from credit reports has become known as credit repair. Whether through their own credit repair efforts or with the help of a reputable credit repair service, thousands upon thousands of people have been able to legally and permanently delete negative items from their credit reports including late payments, charge offs, collections accounts and bankruptcies.
Both Ben Needles & Thetoptens are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Ben Needles has sinced written about articles on various topics from Business Credit Cards, Anger Control and Business Credit Cards. About the Author (text)Wilfrid Baptiste is the author of Your Finish Rich Plan, a personal finance blog. For money-related tips and strategies, visit. Ben Needles's top article generates over 550000 views. to your Favourites.