FTC offers solid guidance on fixing bad credit yourself

Credit and Your Consumer Rights

The FTC makes it clear: they are standing by to help consumers fix their credit report because of how important having an accurate credit history can be:

A good credit rating is very important. Businesses inspect your credit history when they evaluate your applications for credit, insurance, employment, and even leases. They can use it when they choose to give or deny you credit or insurance, provided you receive fair and equal treatment. Sometimes, things happen that can cause credit problems: a temporary loss of income, an illness, even a computer error. Solving credit problems may take time and patience, but it doesn’t have to be an ordeal.

The Federal Trade Commission (FTC) enforces the credit laws that protect your right to get, use and maintain credit. These laws do not guarantee that everyone will receive credit. Instead, the credit laws protect your rights by requiring businesses to give all consumers a fair and equal opportunity to get credit and to resolve disputes over credit errors. This brochure explains your rights under these laws and offers practical tips to help you solve credit problems.

Check out the free information on their website for more updated information to help guide you through the process of fixing errors you find in your credit reports from the Big 3 credit bureaus. Their website address is: http://www.ftc.gov

Here's a helpful book from Amazon.com that can provide you with good, solid information from credit expert John Ventura:





The Credit Repair Handbook: Everything You Need to Know to Maintain, Rebuild, and Protect Your Credit

7 easy ways to hurt your credit score

Here is a great article that details 7 things to avoid if you want to improve your credit rating this year:

"Seven Bad Assumptions That Hurt Your Credit Score"

By Curtis Hill

Many people make the wrong assumptions about how to improve credit rating and how to improve credit scores. Don't believe that your assumptions are correct.

Bad Assumption #1: Lower maximum card limits improves my credit score.

Credit scoring programs don't penalize you for having higher credit limits. However, they do penalize you for having high balance relative to your limits. A $2,000 balance on a card with a $2,500 limit greatly reduces your credit score. However, if you increase the limit to $10,000 on the same card, a higher credit score results because you look less "maxied out" on your credit cards. Moving that balance to a higher maximum limit card could also improve your score.

Bad Assumption #2: Always paying the minimum will result in a good credit score.

Of course not paying the minimum will negatively affect your credit score. However, paying that minimum will not usually result in a good score either. The key issue is keeping your reported outstanding balance low relative to the maximum credit limit. Keeping your balance at less that 10% of the maximum limit is good. A balance over 50% of the maximum could dramatically reduce your credit score.

Bad Assumption #3: Always paying by the due date will result in a good credit score.

Obviously paying late will reduce your credit score, but it takes more than timely payments to get a high credit rating. Why wait to get a paper copy of a bill. Go on line three times a month, review your credit charges, and make on line payments. Thus you are never late. There is less chance of successful identity theft since you see the charges earlier, more often, so you can take corrective action earlier.

But most importantly the reported balance to credit reporting agencies is reduced. What normally gets reported to the credit agencies is the balance on the paper bill. Reducing this balance by paying before the bill is generated will improve your debt ratio and your credit score.

Bad Assumption #4: Paying my bills the day the mail delivers results in a good credit score.

Waiting for the bill in the mail and paying by check through the mail is very 1970. Snap-out-of-it grandma! If you get 10 bills a month, that's 120 chances per year for the post office to mis-deliver or for you to lose the bill. Plus another 120 chances for your return check to get lost in the mail, taken for identity theft, or misdirected to the wrong account. Go on line to make your payments and get verified proof (a transaction confirmation number) that the payment was timely and correctly recorded to your account.

Bad Assumption #5: Closing old credit cards will improve my credit score.

Closing an old account will only reduce the average age of your credit, which will reduce your credit score. Try to keep your older credit lines open. If you need to close some credit lines, do this on your newer credit lines.

Bad Assumption #6: Moving balances to a lower interest rate card will improve my score.

Interest rate and minimum payments are not a factor in determining your credit score. However, opening new accounts, to take advantage of a lower interest rate can be very detrimental to your credit score in three ways. First, a new credit line always reduces you credit score. This reduction can be extreme if you open more than one new account within six months. Second, a new credit line normally requires a new credit inquiry, which will also reduce your credit rating. Third, a new credit line will reduce the average age of your credit, which also reduces your credit rating. Be very judicious in opening new credit accounts.

Bad Assumption #7: Shopping around for the best interest rates will improve my score.

Credit scoring programs do not like changes. Multiple credit inquiries and opening new accounts will reduce your credit rating. Waiting six months between credit inquiries will improve your score. If you are shopping (lets say shopping for a car) try to complete all the similar credit inquiries (car dealership credit inquiries) within 14 days so that they may all be counted as one inquiry by the credit scoring programs. Do not allow people to get your social security number or to run a credit check unless you are serious and ready to buy. Too many inquiries could prevent you from having the credit to buy what you want.

These issues are covered more thoroughly in the book Poor No More: Wealth Is Within Reach by Curtis Hill. http://www.Poor-No-More.com.

Curtis Hill is a Certified Financial Planner™ based in Beverly Hills, CA. Mr. Hill has been a successful financial advisor since 1994 after leading a thriving business management career. Mr. Hill has identified proven "wealth behaviors" to adopt and financial pitfalls to avoid in his book, Poor No More: Wealth is Within Reach.

Article courtesy of: Curtis Hill


Here are credit repair books to take you down the path toward better credit:



101 Ways To Improve Your Credit Score And Rating



Your Credit Score, Your Money & What's at Stake (Updated Edition): How to Improve the 3-Digit Number that Shapes Your Financial Future




How to Repair Your Credit Score Now: Simple No Cost Methods You Can Put to Use Today




Living Well with Bad Credit: Buy a House, Start a Business, and Even Take a VacationNo Matter How Low Your Credit Score

Stay away from bogus credit repair scams

Getting better credit is so important, that people often fall victim to bogus credit repair scams just to get some relief. But beware. You might be putting yourself in jeopardy with these types of businesses.

The FTC puts it this way:

Recognizing a Credit Repair Scam
Everyday, companies target consumers who have poor credit histories with promises to clean up their credit report so they can get a car loan, a home mortgage, insurance, or even a job once they pay them a fee for the service. The truth is, these companies can’t deliver an improved credit report for you using the tactics they promote. It’s illegal: No one can remove accurate negative information from your credit report. So after you pay them hundreds or thousands of dollars in fees, you’re left with the same credit report and someone else has your money.

If you see a credit repair offer, here’s how to tell if the company behind it is up to no good:

The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
The company doesn’t tell you your rights and what you can do for yourself for free.
The company recommends that you do not contact any of the three major national credit reporting companies directly.
The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.
If you follow illegal advice and commit fraud, you may find yourself in legal hot water, too: It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or Internet to apply for credit and provide false information

Be aware of what is legal and what is not when you attempt to fix your credit report. You have every right to dispute inaccurate information in your credit history, but you can get yourself into hot water if you cross the line and use illegal tactics to get better credit.

Here is a helpful book that provides a wealth of legal, helpful steps you can take:





Credit Repair Kit For Dummies (For Dummies (Business & Personal Finance))

How to order your free credit report

You are entitled once a year to order your free credit report to check for errors, have the option to fix inaccurate derogatory information you find after reviewing them, all to restore good credit.

You can get your free credit reports from the 3 major credit bureaus -- TransUnion, Experian, and Equifax -- once every 12 months. Why not start now?

You can order your credit reports and view them online, and you will even have the option to print it off on your home computer printer to review it offline.

Read more in this free how-to article at FindHow2.com:

http://www.findhow2.com/free-credit-report.html


Reminder: Identity theft is real, and information on identity theft protection is just a click away. Read this book to learn how to protect yourself from being an identity theft victim this coming year:




Identity Theft For Dummies (For Dummies (Business & Personal Finance))

Only passage of time can correct accurate negative information on your credit report

Dealing with accurate negative information on your credit report is a topic which confuses a lot of people. In reality, it's guite simple. If what is in your credit report is true and accurate, it cannot be removed just because you dispute it.

When negative information in your credit report is accurate, only the passage of time can assure its removal. Accurate negative information generally can stay on your report for seven years. There are certain exceptions, though.

Read the following how-to article at FindHow2.com to learn more about what can and cannot be disputed on your credit report:

http://www.findhow2.com/dispute-credit-report-errors.html




Fix Your Credit DVD - How to Fix Mistakes on Your Credit Report and How to Improve Your Credit Score (Credit Repair)




Your Credit Score: How to Fix, Improve, and Protect the 3-Digit Number that Shapes Your Financial Future, 2nd Edition

Getting free credit report from Equifax

You are entitled to get one free copy of your credit report once every 12 months. Equifax offers this guide on how to request your free credit report from them. This is what their website says on the matter:

You are entitled to one free report during any 12-month period no matter where you live, if you:

-- Are unemployed and intend to apply for employment in the next 60 days
-- Are on public welfare assistance
-- Believe your file contains inaccurate information due to fraud
-- You are also entitled to a free report if you have received notice of an adverse decision (such as denial of credit, insurance, or employment) within the past 60 days.

To receive your free Equifax credit report online, visit www.equifax.com/fcra (This is the quickest and easiest way to gain instant access to your credit report)
Call 800-685-1111 or write to:


Equifax Information Services


P.O. Box 740241


Atlanta, GA 30374

Here is a quick read from Quick Easy Guides that can provide additional information to help you:





How To Dispute Credit Report Errors

Why you should dispute derogatory listings with credit bureaus

Derogatory items are required to be removed from your credit reports after seven years. This law is designed to help consumers recover from their own credit mistakes and give them the opportunity to rebuild their credit rating.

After checking your credit reports, it is important to know that if you find charged-off accounts appearing on your credit report after seven years, you will need to dispute that derogatory listing with the respective credit bureaus.

Debt purchasing firms have been known to report inaccurate charge-off dates so as to extend the amount of time an old account appears on your credit report. This keeps this derogatory information "in play" so to speak, allowing collection aagencies to hound you for money that rightly should not appear on your credit history.

Erroneous information such as this ought to be what you dispute first. Determine where to write your credit dispute letter and follow the free tips on our website: http://www.findhow2.com/credit-letters.

The Federal Trade Commission website offers a free how-to article called "How to Dispute Credit Report Errors" which provides solid steps to take to clean up your credit.

Check out this DVD on how to fix your credit:





Here's what one reader said about it: "...simple and easy. In the past I had gotten a book on the subject and could never get myself to finish reading it. With this, I just popped in the DVD, sat on the couch and in 30-min learned everything I needed to know. Great stuff!"


Learn more about it here:

Fix Your Credit DVD - How to Fix Mistakes on Your Credit Report and How to Improve Your Credit Score (Credit Repair)