Why the Need for Credit Repair?

Debt Reduction

We'll begin our discussion by explaining the concept of "Debt Reduction" since this is often the first step taken to improve bad credit. As the name implies, the objective is to make repayment more manageable. The most common way of achieving this goal is through consolidation, which is nothing more than the act of combining multiple debts into a single one. The benefits of consolidation are that you can save money by way of reduced interest charges, your overall payments are minimized and you gain the convenience of paying only one single monthly payment. To consolidate your debt, you can take one of two approaches. You can either apply for a Debt Consolidation Loan or you can seek the services of a Counseling Agency. The service offered by such agencies differs from a Debt Consolidation "Loan" in that your debt is consolidated and your interest rate reduced without the need for a loan. Such agencies accomplish this by simply negotiating with your creditors. What you may find most surprising is the fact that such programs are largely if not entirely paid for by creditors.

Now, where do you go for help? eDebtConsolidation is an excellent place to start. Their goal is to assist you with unsecured debt such as credit cards, medical bills, collection agencies, and past due bills. They offer a free analysis which, depending on your specific circumstances, can instantly reduce your liabilty & finance charges by as much as 50%. If you choose to request a Debt Reduction Analysis, a financial professional will contact your creditors to get your interest rate and monthly payments reduced to an amount that you can afford. In some cases, they can even eliminate interest charges altogether, allowing your entire monthly payment to go towards the principal. This results in dramatic savings over the repayment period. By taking advantage of eDebtConsolidation's services, you'll no longer pay your creditors directly. All of your outstanding balances will be organized into one manageable and reduced payment to a debt consolidation company. This company in turn will pay your creditors on your behalf. If that sounds like a viable alternative to address your financial burden or you'd like to learn more, we strongly recommend that you visit eDebtConsolidation. There you will find an excellent resource of information and answers to Frequently Asked Questions. Here are some other online resources worth visiting: eCreditRepair offers a free Debt Reduction analysis. Both Credit Haven and GetAFreeQuote.com offer free consolidation services. However, GetAFreeQuote.com also offers loans, which may be of interest if you wish to combine your auto loan and/or student loan into one single, potentially cheaper loan. By filling in a simple online form, GetAFreeQuote allows you to quickly and easily obtain a quote from several nationwide lenders.

Credit Repair

This is the process by which you improve the Rating reflected in your Credit Report. Because your Rating is a primary factor used by creditors when evaluating your "creditworthiness", it's essential to become familiar with your Report and follow a few simple steps to improve your standing, especially if you've encountered financial difficulties in recent years. In simplest terms, the process can be broken into three basic steps: 1) Understanding the Function of Credit Bureaus and the Reports they compile 2) Obtaining a Copy of Your Personal Report and 3) Taking the Necessary Action to Repair Your Rating. Our objective is to introduce you to the three basic steps of repair and encourage you to further research the topic by visiting other online resources such as CreditRepair or eCreditRepair. There you will be guided through various concepts such as Dealing with Creditors, Settling Your Debt for a Reduced Amount, Obtaining Approval for Low Interest Rate Repayment Loans, Rebuilding Good Standing and Adding Positive Performance to Your Report.

Step 1:

We'll begin by explaining the role of Credit Bureaus and the significance of Credit Reports. The Bureaus obtain information from creditors in order to compile a consumer's Credit Report. Creditors then use this information to determine your "creditworthiness". Items disclosed in the Report typically include open accounts, credit limits, current balances, number of late payments, collection actions, tax liens, and whether or not you own your home. There are ten specific things in your Report that reflect poorly. From least damaging to the worst, they are inquiries, rejections, late payments, past due and unpaid payments, court judgments, collections, loan defaults, repossession, foreclosure, and bankruptcy. It is important to note that negative information stays on your file for 3 to 7 years. However, in some cases a Bureau may provide information dating back 10 years. It is possible, however, to have an A-rated Report within 2 years, even after drastic circumstances such as bankruptcy. This is due to the fact that lenders place greater emphasis on present circumstances than previous performance. Therefore, if approached systematically, it is possible to rebuild your standing quite quickly. And, you'll be pleased to know that positive information remains on your Report indefinitely.

Step 2:

Once you know what creditors are looking for, the next step is to obtain a copy of your Report.

Step 3:

Once you have your Report on-hand, you should review it for negative items such as past due history, inquiries, and public records (bankruptcies, liens, court judgments). According to the Fair Credit Reporting Act, all erroneous or unfair information has to be eliminated from your file. In other words, you have the right to challenge the accuracy of the Report. If you discover an inaccuracy, it is advisable to dispute it directly with the Bureau in which case the Bureau has 30 days to investigate the item. If the Bureau finds the item to be erroneous or cannot confirm it, it must be removed immediately. Note that any dispute should be addressed in writing and in the event of multiple errors, it is advisable to address only one item at a time. The best way to have a negative item removed is to challenge its accuracy, completeness or age. Ideally, you should provide documentation that supports your challenge. You'll find that challenging an entry is usually effective because quite often the Bureaus are too busy to re-verify the disputed item in a timely manner, the information in question may no longer exists or it may be archived in an inaccessible location, making it impossible to confirm. However, if the item in question is confirmed by the lender, you can always try again at a later date and if all such attempts fail, as a last resort you can contact the lender directly and propose a settlement.

We hope the information above is sufficiently enlightening to prompt you to take action, however, please note that this is merely an introduction and is only the tip of the iceberg. If you're interested in learning more, we strongly recommend that you visit the sites mentioned above. At these sites you'll find an excellent repository of answers to Frequently Asked Questions addressing a wide range of topics and each site offers an excellent Kit that provides in-depth, step-by-step instructions regarding the entire process. As an alternative, if you are unsuccessful in resolving Report inaccuracies on your own or you prefer professional assistance, GetAFreeQuote.com is another online resource that may be of interest. GetAFreeQuote.com offers professional consultation and assistance to remove errors from your Report pertaining to Late Payments, Collections, Judgments, Tax Liens, Repossessions, Foreclosures or Bankruptcy.

Bankruptcy

Bankruptcy allows legal relief and is used by many as a last resort to achieve a clean start. The two primary forms are Chapter 7 and Chapter 13. For most individuals who simply want to eliminate their burden without paying any of it back, Chapter 7 is the most viable alternative. However, as you might guess, there are restrictions. For example, to qualify you must reside, own a home, business or property in the United States and at least 6 years must have elapsed since any previous Chapter 7 discharge or Chapter 13 plan was completed. Additionally, at least 180 days must have elapsed since you last had a filing dismissed and to qualify for relief under Chapter 7 you must have insufficient funds to cover monthly debts after paying monthly expenses for necessities. Chapter 7 is the most common form and like Chapter 13, it is only available to individuals (not businesses or partnerships). Most often Chapter 7 yields a complete elimination of unsecured liability while under Chapter 13 a debtor proposes a 3-5 year full or partial repayment . Chapter 13 is typically for people who do not qualify for Chapter 7 because they either have too much income or they have liability that is non-dischargeable under Chapter 7 (e.g. certain taxes). Another reason that people might file Chapter 13 is because even though they are behind on their mortgage or business payments, they would like to avoid foreclosure. A chapter 13 allows them to make up their overdue payments over time and to reinstate the original agreement. If a debtor has valuable nonexempt property that they would like to keep, a chapter 13 is often a better option. To file for Chapter 13 you must have a "regular source of income" and some disposable income. When determining the amount to be repaid, disposable income is the primary factor taken into consideration.

Although there are potential ramifications, in many cases filing may actually have a net positive effect on your rating. This is because discharges greatly benefit your debt-to-income-ratio, which is a major criteria used by creditors when gauging your "creditworthiness". Furthermore, today there is far lesser stigma attached than in previous years. Perhaps, this is one of the reasons that the number of filings has been dramatically increasing over the last several years. And, it's also important to note that you have the right to file without a lawyer. In fact, a fast growing percentage of people are filing on their own because they now realize that many bankruptcies are routine and do not warrant the services of a lawyer. Therefore, they chose to do it themselves and save $1,000 or more. Thousands have used "kits" to guide them and have successfully filed on their own without paying a retainer fee.

If learning more interests you, we strongly recommend that you visit Bankruptcy Web. There you will find an excellent repository of answers to Frequently Asked Questions addressing a wide range of topics and further details regarding their highly recommended, downloadable, step-by-step, do-it-yourself kit.

As you probably know by now, personal finances can be a source of much frustration, especially when you feel uninformed or un-empowered and you do not know what to do about it. Fortunately, the wide range of information available online is a powerful resource that makes it easy for you to navigate previously un-chartered waters. Knowing what you now know, you are in a much better position to map out your financial future and chart your course to financial recovery. We consider the online resources that we've identified here to be highly informative, user-friendly and effective. For all of these reasons, we encourage you to visit them and further arm yourself with the knowledge you need to make well informed financial decisions. We hope you benefit from the information we've provided and as always, if you have found this site helpful please tell your friends and family.

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