New Credit Repair – Free Credit Repair Help

Reader Question

I am young and just starting out, how do I establish a good credit report and credit score now so I don’t have to worry about it later on in life when I need to borrow money for a house mortgage or something really expensive like that?

Make installment loans on something and pay them on time. Car loans are a good example of an installment loan. Your current car loan may already be in your report, but what about car loans past? Carrying a good credit score is an asset and can pave your future towards greener pastures. On the other hand a negative marking on your credit report can be ruinous for your future dreams.

Reader Question

My credit report sucks…my credit score is 490 and my credit cards are maxed out. Besides the obvious…I am screwed, how can I get a loan to help pay off my debts, and what is it on my credit report that is causing my score to be so freakin low?

Paul,

Atlanta, GA

Ask your credit reporting agent or company for the top reasons (factors) that negatively affect your credit score and work to improve these factors. If you are paying higher premiums because of your credit information, ask your insurer to re-evaluate you when you improve your credit.

You should also ask your insurance agent or insurance company about any possible claim you can make to recover the cost of repairing your bad credit. The FCRA requires an insurance company to tell you if they take an “adverse action” because of your credit information.

Reader Question

I keep seeing those silly Free Credit Report commercials on TV…and I wonder how often should someone check their credit report for errors anyway? I mean, is this really a big of deal as they make it out to be? When is it helpful and when is it just a total waste of time and money to check your credit report?

Thanks

Elma,

Miami Florida

Checking your credit report too often can damage your credit! The bureaus think that you are running out of options when you do this. Checks and debit cards work similarly, they both tell the store that you are buying from that you have money in a bank account and they both give that store permission to ask for your money from your bank. This way, you do not always have to have cash on you.

Insurers using credit scores for rating shall make a filing that includes actuarial justification for those factors when there is a change in rating factors, as this effectively constitutes a pricing revision. The insurer does not use credit information to underwrite or rate a risk where such information has been identified on the records of the credit bureau as in dispute by the policyholder or applicant.

Insurers also assert that using consumer credit history is non-discriminatory because it is “color blind” and because there is no consistent correlation between income level and credit score. Insurance reforms adopted in 2003 include provisions that limit the use and application of credit information.

Under new insurance rules that took effect January 1, 2004, companies using credit information must provide a disclosure statement to the consumer once an insurance application is received.

Reader Question I got a call today from a mortgage company that says they can help me save money by refinancing my home loan. I don’t know who these people are, but they are offering my a much lower rate…should I take them up on this offer?

Sid,

Trenton NJ

Hey Sid, lenders may promise to help you refinance when it comes time to pay it off, but watch out! Predatory lenders make money by charging excessive fees every time they refinance the loan.

Lenders use these scores as tools to help decide if a loan should be made and to set repayment terms. You might get a lower interest rate, but the excess fees they will charge might not make this a good deal after all?

Reader Question – Why is there a credit score anyway? What does it really do for me, except get me in trouble when I don’t pay my bills on time?

Henry,

Atlanta GA

Henry, I am not sure you can make your credit score disappear but you might be able to clean it up some. Companies that develop insurance credit scores, such as Fair Isaac and Choice Point, provide insurance companies with up to four attributes that have had a negative impact on your insurance credit score.

The agent or company should be able to tell you which attributes of your credit history had the most impact on your score. Companies don’t want to give credit cards or loan money to people that are unlikely to pay it back.

To help them decide if you are a good credit risk or not, most companies use credit scoring systems. Companies that lend money rely on credit reporting agencies and the credit reports they generate to help them assess a customer’s ability to repay what they borrow.