mortagesandforeclosures

by Miguel Palmer

New economic troubles all over the world have left a lot of people struggling with bad credit reports and low credit scores. Current problems in all of the financial sectors have changed many of the rules of the past and some of the old rules are now obsolete. This has left numerous people not knowing what to do about bad credit and bad credit.

Only some people realize just what a credit score is composed of. For example it is not widespread knowledge that your credit score can be reduced by inquiries on your account and by your debt to credit ratio. The truth is that you are considered to be riskier if it looks as if you are shopping for credit so inquiries reduce your score and if you have credit and use it you are also considered a higher risk. In order to have a high credit score you need to reduce your debt to less than about 15 to 35% of the credit you have available and no more.

The Fair Credit Reporting Act or the FCRA was enacted to protect consumers from inaccurate reporting on their credit. Under the FCRA you have the right to be given one free report from every one of the main credit reporting agencies every single year. You should take advantage of this and obtain a free report every year so that you can track your credit and make sure that it is being reported correctly.

One reason is since it is projected that as many as 75% or more of all credit reports include mistakes and inaccuracies. These mistakes can cause you many difficulties if they come up when you are trying to get credit. You can steer clear of many of these problems if you get your report every year and check it out for mistakes and inaccuracies.

As per the FCRA you also have the right to dispute mistakes or inaccuracies on your credit report. When the credit bureaus receive your dispute they have 30 to 45 days to provide evidence that what they are reporting is truthful and accurate. It has been estimated that as many as 45% of the disputes received are not verified within the time frame. If the reporting is not verified within the time frame it must be deleted from the report. As a consumer you can use that fact to your benefit is you take the time to issue the dispute.

There are also other things that you can do to better your credit score and credit rating. Since the debt to credit ratio is so significant you can get your credit limits increased or you can pay down your balances so that your debt does not exceed 15 to 35% or your available credit. You should also completely avoid any inquiries into your credit. If you must shop for credit be very selective and only shop where you know you will get the credit and then have the creditor combine the inquiry into the loan reporting. That means you will not be showing inquiries.

You can work to repair and improve your credit on your own or you can hire a professional that specializes in credit repair. If you do that make sure that you are getting a business that is reputable with a good track record. Do not waste money to a scammer because it will just cause you more problems in the future.

But don't think that credit repair in only a fairy tale because it is not. Congress passed the FCRA so that discrepancies and problems could be removed from credit reports and you need to make sure that your own credit report looks as good as feasible.

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