The,Leading,Four,Myths,Credit, finance, share, loan The Leading Four Myths of Credit
If your financial problems have reached the point where you do not see a way out and you feel as though you are drowning in debt, your best way out is through declaring bankruptcy. Filing may well allow you to get your finances back on track Thankfully, there are now several web sites that are there to help people like you with bad credit to find the fast personal loans that you need. When you have bad credit, the first thing that you should be looking for is a loan company that
Myth One: Information in my credit file cant be changed. Truth: The Fair Credit Reporting Act requires that any information that is disputed by a consumer must be verified as 100% correct. This means that if a creditor cant verify that the disputed item is accurate, it must be removed from your credit report. Myth Two: I should pay off past due accounts to improve my score. Truth: When you pay a past due account, the late payment will still show up even though the account will be marked as paid. In some cases, paying off an older item will actually lower your credit ranking. An item that is four or five years old doesnt have as much impact on your ranking as something that happened last month. By paying off an account, you will renew the date of last activity. A paid collection with a recent date of last activity can be more damaging to your credit score than an unpaid collection that is very old. Additionally, because items stay in your file for seven years from the date of last activity, paying this account off will restart the clock. This doesnt mean that you shouldnt pay off your collections. What you will want to do is negotiate with the creditor as to how it will be reported to the bureau BEFORE you pay the account. Be careful here: make sure you get everything in writing! Myth Three: Bankruptcy is my best option for starting over. Truth: While in some cases, a bankruptcy is certainly the only option, it shouldnt be considered lightly. While changes in the bankruptcy code have made it more difficult for many to file, those who still qualify should carefully consider their options. A bankruptcy will stay on your credit report for at ten years. You wont be able to qualify for a home loan for between two and three years. (If you had a foreclosure, you can count on at least three years.) Additionally, you will pay higher rates for auto loans and credit cards, even after your credit is re-established. Very often, lenders will be willing to re-negotiate when they hear that you are considering bankruptcy. The bottom line: it should be considered a last resort option. Myth Four: If something is accurate, it can never be removed from my credit filet. Truth: The Fair Credit Reporting Act requires credit bureaus to verify the correctness of information when a consumer disputes an item. If the credit bureau is unable to verify this information within 30 days, it must be deleted from your credit report. This means that if the creditor misses the cut-off date, the disputed item must be removed, even if it is true! The easiest items to take advantage of this are items that are older and things that were once past due but are now completely paid off. The reason for this is that your information can be difficult for the lender to find and they are much less motivated to take the time to verify than they would be if the item was currently in collection or past due. By arming yourself with credit facts, you are positioned to optimize your credit score. For more information on credit repair and buying a home with less than perfect credit, please visit our website: http://www.financethedream.com
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