| Q: |
What exactly
is bad credit? |
| A: |
There
are numerous types of credit report problems that would cause a lender
to reject your application for a loan.
Such problems include: missing a credit card payment, defaulting on a
prior loan, filing for bankruptcy in the past seven years or not paying
your taxes. Other black marks on a credit report include a judgment
filed against you (perhaps for non-payment of spousal or child support)
or any collection activity.
If you feel that your credit report is wrong, experts say it's best
to take it up with the organization or company claiming you owe them
money.
But if you've been late paying your bills, regroup by paying in full
and on time for six months to a year to prove to the lender that the
late payments were an aberration.
You can order a copy of your own credit report by calling the three
major credit reporting agencies: Experian at (800) 392-1122, Equifax at
(800) 685-1111 and Trans Union at (312) 408-1050.
|
|
| Q: |
What if
there is a credit reporting mistake on my report? |
| A: |
There
is no fast and easy way to repair damaged credit that took months or
years to occur. The law allows negative information to appear on an
individual's credit record from seven to 10 years.
Credit problems are the main reason would-be home buyers are denied a
loan. The first step to clearing up your credit is to get a copy of your
credit report to make sure that the negative credit information is
indeed accurate. For a copy of your report, contact one of the three
major credit reporting agencies: Experian at (800) 392-1122, Equifax at
(800) 685-1111 and Trans Union at (312) 408-1050.
The bureaus should provide instructions on how to read the report and
how to dispute any inaccuracies it contains.
If your credit report is correct, take care of any outstanding
delinquent obligations first. Lenders usually won't consider any
borrower who has had a delinquent payment in the past year.
|
|
| Q: |
Will bad
credit prevent someone from getting a home? |
| A: |
There
are numerous types of credit report problems (which may or may not be
your fault) that would cause a lender to reject your application for a
loan.
Such problems include: missing a credit card payment, defaulting on a
prior loan, filing for bankruptcy in the past seven years or not paying
your taxes. Other black marks on a credit report include a judgment
filed against you (perhaps for non-payment of spousal or child support)
or any collection activity.
If you feel that your credit report is wrong, experts say it's best
to take it up with the organization or company claiming you owe them
money.
But if you've been late paying your bills, regroup by paying in full
and on time for six months to a year to prove to the lender that the
late payments were an aberration.
You can order a copy of your own credit report by calling the three
major credit reporting agencies: Experian at (800) 392-1122, Equifax at
(800) 685-1111 and Trans Union at (312) 408-1050.
|
|
| Q: |
How do I
find out what my credit report says? |
| A: |
For
a copy of your own credit report, call one of the three main national
credit reporting agencies: Equifax, (800) 685-1111; Experian, (800)
392-1122 or Trans Union, (312) 408-1050. |
|
| Q: |
Where do I
get a copy of my credit report? |
| A: |
For
a copy of your own credit report, call one of the three main national
credit reporting agencies: Equifax, (800) 685-1111; Experian, (800)
392-1122 or Trans Union, (312) 408-1050. The bureaus also should provide
instructions on how to read their report and dispute any inaccuracies it
contains. |
|
| Q: |
Where do I
get information on consumer credit laws? |
| A: |
For
information on consumer credit laws, contact the National Foundation for
Consumer Credit, 8701 Georgia Ave., Suite 507, Silver Springs, MD 20910;
call (301) 589-5600. |
|
| Q: |
What do I do
if I get turned down for a loan? |
| A: |
Increasing
numbers of loan applicants are finding ways to buy their own home
despite past credit problems, a lack of a credit history or
debt-to-income ratios that fall outside of traditionally acceptable
ranges.
Ask the lender for a full explanation, then appeal the decision in
writing.
|
|
| Q: |
What do I do
about bad credit? |
| A: |
Credit
problems are the main reason would-be home buyers are denied a loan. The
first step to clearing up your credit is to get a copy of your credit
report to make sure that the negative credit information is indeed
accurate. For a copy of your report, contact one of the three major
credit reporting agencies: Experian at (800) 392-1122, Equifax at (800)
685-1111 and Trans Union at (312) 408-1050.
The bureaus should provide instructions on how to read the report and
how to dispute any inaccuracies it contains.
If your credit report is correct, take care of any outstanding
delinquent obligations first. Lenders usually won't consider any
borrower who has had a delinquent payment in the past year.
|
|
| Q: |
How do you
clear up bad credit? |
| A: |
There
is no fast and easy way to repair damaged credit that took months or
years to occur. The law allows negative information to appear on an
individual's credit record from 7 to 10 years.
The first step is to check your existing credit record. Anyone can
obtain copies of their own credit report free of charge if they have
been turned down for credit recently. For a fee, people can request
copies of their own credit report from the three major credit reporting
agencies: Experian at (800) 392-1122, Equifax at (800) 685-1111 and
Trans Union at (312) 408-1050. The bureau also should provide
instructions on how to read the report and how to dispute any
inaccuracies it contains.
If the credit report is correct, take care of any outstanding
delinquent obligations first.
Resources: * "Rebuild Your Credit: Law Form Kit," Nolo
Press, Berkeley, Calif.; 1993.
|
|
| Q: |
How long do
bankruptcies and foreclosures stay on a credit report? |
| A: |
Bankruptcies
and foreclosures can remain on a credit report for seven to 10 years.
Some lenders will consider an borrower earlier if they have
reestablished good credit. The circumstances surrounding the bankruptcy
can also influence a lender's decision. For example, if you went through
a bankruptcy because your employer had financial difficulties, a lender
may be more sympathetic. If, however, you went through bankruptcy
because you overextended personal credit lines and lived beyond your
means, the lender probably will be less inclined to be flexible.
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