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In this modern day and age, good credit is essential. For the purposes of buying a car or home, things most would consider necessities, the consumer must have credit. Most consumers now have credit cards, as well, due to the popularity of shopping at online e-commerce websites. There are many ways that some people blemish their credit including missing a minimum payment on their credit card, allowing a loan to go into default, or through not paying a utility bill. In these instances, the creditor will report the default to a credit reporting agency. The even more difficult part comes in fixing the problem once it has shown up on your credit as a negative strike. Negative items such as these can remain on your credit report for up to seven years.
Through taking action as soon as you are aware that a negative item has been added to your credit history, you can make the process of repairing your credit much smoother. This immediate action will ensure you do not have to deal with bad credit problems such as not being able to open new accounts, not being able to get new credit extended to you, not being able to rent a vehicle, not being able to rent home, or not getting approved for mortgage. No one wants to deal with these problems, and therefore swift action to repair your credit is essential.
Perhaps one of the simplest preemptive actions you can take when you do fall behind on a payment is to simply call the creditor. Most people would shy away from doing this because they would feel embarrassed for having to explain why the payment is late. However, allowing embarrassment to prevent you from simply picking up the phone could cost you long-term credit problems as mentioned above.
When you know that you are going to have trouble with a particular debt, the best policy is to call up the creditor. Most creditors will discuss different payment options, and in some situations they may defer a payment altogether. It is not in the creditor's best interest to be uncooperative, so in most situations a phone call can go a long way in relieving your problem. A late payment only becomes a problem if the creditor reports you to the credit reporting agency, and therefore these preemptive credit repair measures go a long way.
If you do contact a creditor for the purposes of preemptive credit repair, propose a payment plan that will work for you. This payment plan must be realistic for the creditor, and it must be a plan that you know you can afford. If you then default on the payment plan that you proposed, it will appear that you were simply buying time to avoid payment all together.
Remember, your creditors decision of whether or not to report you to a credit reporting agency is what will most greatly affect you; that is why contact your creditors regarding an outstanding debt and earnestly convincing them not to report you to a credit reporting agency is so important. Taking preemptive action and contacting your creditor to propose an alternative payment plan is essential to staying on track with your credit repair.
No matter what many credit counseling scam artists may try to tell you, no one can legally remove any information that is up-to-date and accurate from your credit report. They can't do it, and you can't do it yourself. However, you CAN request an investigation of anything you find in your credit file that you believe to be either incomplete or inaccurate. That is perfectly legal, and can be done at NO cost to you. In fact, anything that a credit repair company offers to do for you can be done yourself, generally free or for a nominal fee.
The good news is that just because you may have some negative information in your credit report doesn't automatically mean you can't get credit at all. Most creditors have their own guidelines when it comes to granting credit, which means that each company will look at your credit report in a slightly different way. For instance, it’s not uncommon for companies to lend more credence to the most recent information in a credit report. That way, if you experienced some financial difficulty a number of years ago, but then were able to get back on an even keel and have been exemplary since that time, you'll be more likely to receive the credit you're seeking with those companies. It might even be to your benefit to have an informal discussion with a potential creditor to discuss how they interpret credit reports--even before you apply for credit.
You're entitled to a free credit report every twelve months, and it's worthwhile to take advantage of that fact, just to see what information is contained in your file. Many financial advisors and consumer advocates suggest that you review your credit report periodically, because erroneous information can sometimes get into your report inadvertently and can affect your chances of getting a loan or qualifying for insurance--as well as how much those will cost you, in terms of interest rates or premiums.
So request a free credit report from one of the Big Three: Experian, Equifax, or TransUnion, and make sure that all the information it contains is up-to-date and accurate, especially if you're about to apply for a major purchase, seek insurance, or apply for employment. Checking your credit report on a regular basis can also alert you to identity theft, which is one of the fastest-growing crimes in the world today. Inaccurate or incomplete information in your credit report can have a significant impact on your chances of obtaining loans, insurance, or a job, so it's well worth the effort to make sure everything in your report is exactly as it should be.
If you're having trouble with your credit report and need help finding assistance, you can contact the Federal Trade Commission (FTC) for help. Find them on the Web at , or you give them toll-free at 1-877-FTC-HELP. Their TTY number is 1-866-653-4261. They maintain an online database that lists hundreds of civil and criminal law enforcement agencies in the U.S., and they'll be able to steer you toward the help you need.
Copyright © Jeanette J. Fisher