If you have bad credit, you may be finding it increasingly
difficult to get vital loans. While this is generally a sign
that you should try to avoid further borrowing, there are
certain circumstances in which it is just vital that you get
credit. This may include paying rent, especially if you have
young children, paying school fees or paying for medical
treatment. A bad credit rating can also hinder your attempts to
get insurance, rent a home and sometimes get a job.
Repair Your Credit
If you are facing problems such as these, you should consider
trying to repair your credit rating. Credit repair is a general
term often applied to the controversial practice of improving or
rehabilitating one's financial reputation (creditworthiness)
among creditors. To improve a credit rating damaged by poor
credit habits, in the long run only one thing will work:
changing those habits.
Making arrangements with the creditors to repay them is often
one of the steps in improving one's credit habits. Creditors may
accept slow payment schedules, as an alternative to writing off
the debt. In some cases, creditors may accept a less-than-full
repayment (pennies on the dollar). The key here is contact with
the creditor and taking action to retire the debt.
At the same time, reviving an old debt that is no longer
collectible can actually do additional damage to one's credit
reputation. It is best to be aware of the circumstances
regarding the debts collect-ability, statute of limitations, and
legal and illegal collection practices, before contacting a
creditor on a very old debt.
FACT
In December 2003, Congress passed the Fair and Accurate Credit
Transactions Act (FACT Act), which included the right to a free
annual credit report on request and a number of provisions
designed to improve the accuracy of credit reports.
On June 4, the Federal Trade Commission finalized its rule for
implementing the new consumer right to a free credit report,
rolling it out over a nine-month period, beginning on the west
coast in December 2004 and finishing on the east coast in
September 2005.
From 1994 to 2004, the state PIRGs and other consumer
organizations have issued numerous reports showing that sloppy
credit reporting agency practices are at fault for errors in
consumer credit reports. Inaccurate credit reports could damage
1 in 4 consumer's ability to buy a home, rent an apartment,
obtain credit, open a bank account, or even get a job.
About the author:
Joseph Kenny is the webmaster of the loan information sites
http://www.selectloans.co.uk/ and also
http://www.ukpersonalloanstore.co.uk. At the Personal Loan Store
you can find all the different loan types explained.
