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Credit Repair
Credit Score Repair with Integrity and Legal Authority
Rent-to-Own is my main business. Most of the people who contact me about Rent-to-Own have temporary low-credit score problems. In this article I will give a bit of information that should help to show the difference between good credit repair programs and the scams that can waste time and money.
For the past three months, I have been checking out many of the credit repair products and services. I was disappointed to find that so few of them were built around a reputable law firm that would be honest and straightforward with their clients. Until now, the best one I have found is Lexington Law. If you have experience with them, please contact me and let''s talk about your experience.
Much of the content in this article comes from my own research on credit repair. Therefore, not all of it may always be true for every circumstance, but I've done my best to make it sensible and useful.
Basic Facts
Almost every time you get credit from a business, whether a loan of money or a credit card or credit towards the purchase of something, that event is registered at the three main credit reporting companies. Those three companies, Equifax, Trans Union, and Experian, make money by selling credit information on US residents. That credit information, presented as your credit report, shows lenders how much risk they are taking if they give credit to you. Here is a place to get a free credit score report.
A credit report can present your "credit risk score" as a number in one of three levels:
a high score (750 to 850), a medium score (650-750), and a low score (between 300 and 650).
A high score allows you to get credit easily. A low score keeps you from getting much credit, and the credit you might be able to get will have a very high cost, measured by the interest rate that you will be charged.
For example, if you are able to get loans to buy a house, a high score may pay for the loan with 7% interest; a low score may pay 11% interest. That can amount to more than $250 extra dollars in mortgage payments each month on a $50,000 house.
Your Credit Score
Late payments, missed payments, incorrect or partial payments, how much credit card debt you carry, and sometimes, there are mistakes put into the system. In fact, one credit repair company claims that as much as two-thirds of all data entered contains mistakes. Your credit history may still be affected by payment issues long ago in your past. And old or incorrect data does not have to be removed or checked or verified.
Changing Your Credit Score
1. Pay all bills on time, and if you think you may be late in paying a bill, contact the people that you owe money to as soon as possible. Many companies want to help you pay your bills and will work with you on making up payments, but if you do not contact them they cannot help you.
2. Do not carry much credit card debt. The unpaid balance can be reported as a negative item on your report. Keep credit card debt to less than 30% of the credit available on any single credit card.
3. You are entitled to a free credit report each year and you should study it carefully to see what mistakes you can find. When you find mistakes, contact the credit reporting company and also the company that reported wrong data to the credit reporting companies. If you do not show them their mistakes, they will not be able to make corrections.
4. If there are significant mistakes and the credit reporting companies are unable to make the necessary changes, then get professional help.
a. National Foundation for Credit Counseling Call 1-800-388-2227. (http://www.nfcc.org/)
b. Consumer Credit Counseling Service of Alabama, Inc., Suite 317, Moore Bldg., 217 South Court St., Montgomery, Alabama 36104. Tel: (334) 265-8545. (https://budgethelp.com/)
c. Study the information at the Alabama Cooperative Extension Service on Debt Counseling. (http://www.aces.edu/pubs/docs/H/HE-0647/)
d. Lexington Law is a legal firm that combines effective and legal credit repair along with practical financial management counseling.
5. Credit repair kits and do-it-yourself systems may not work, may end up costing you a lot of money, and may use ineffective or illegal credit repair schemes. Do not trust a company that guarantees you success in cleaning up your credit report.
Your Best Options
1. With the help of your creditors, do whatever it takes to pay off all of your bills and debts as quickly as possible.
2. Get help to change incorrect information in your credit report.
Let me know what solutions you have tried, and the results.
Wishing you a higher credit score,
Jon
P.S.: You may have friends or clients that could use credit help. Send them to this page. Maybe it will be helpful or encouraging to them!
**This is not presented as legal advice, and I suggest that for accurate and reliable legal information, you discuss legal matters with several different legal professionals.
