The process of getting a credit:
The time you go apply for loan to meet your needs; the credit company will check your credit history to decide if they can offer you any loan and if they do, at what interest rate to offer you. The credit score is a three digit number which tells them what is your standing in the credit industry. This credit score or FICO rating may change every week, go up and down depending upon the efforts or mistakes you make with respect to your borrowing.
The FICO score ranges between 300 and 850 and anything under 650 is marked as ‘risky’, this all depends on past and present credit status. There are three major credit reporting companies, TransUnion, Experian and Equifax and the credit score being risky is totally dependent on their own standards, so every company has their own standards of what is acceptable even your report may differ with respect to every company.
Your payment history, closed unpaid accounts, defaults, debt to income ratio and up to date accounts all came under consideration when a credit report is made. So whenever you apply for a loan or a credit request, your score is requested by the lending company and the number of times this is requested it influences your credit score number. Too many requests to check your score from different credit companies may make you look very desperate to get a loan. This will make lending companies very conscious of your situation and will think twice in deciding to approve your loan request. Same goes for bankruptcy; this is considered alarming in process of approval of credit line request and affects your credit score.
Not only lending companies, but future landlords and employers also look for your credit score. To see where you stand in terms of credit scoring, you can request your report and when you think you need to raise your credit score you desperately look for ways to do it instantly a soon a possible.
Due to shrinking economy, banks are being very strict in their policies and making it harder than ever to qualify for loans. Better Business Bureau warns that by exploiting the credit crunch there are companies taking advantage of desperate customers who want to get their loans approved and need their credit instantly repaired.
So the few things which you can do to avoid these credit repair scams are:
According to BBB, the complaints against quick credit repair companies have risen to 40% since 2005. You must have seen the lucrative ads these companies publish in newspapers, magazines, through direct mail, radio television and the internet. In many cases these companies take large amount of fees from their clients up front and in return they promise to erase any negative patches, blemishes, from credit records, get loans approved through piggyback, on someone else’s credit record and even get you a new social security number.
First of all if there is an error in your credit report which is negative, this can be removed, but an accurate negative information cannot be removed and no one can do that. Secondly, piggyback is no more there, it was used to happen in the past and now it is only a way to get money out of clients, it was the method where one could borrow someone else’s credit score to improve his own credit ratings. Thirdly, it is next to impossible to get a new social security number whoever says that is actually scamming you. The point here is the promises credit repair company make and what they legally can do to fulfill them are all can be done by you without spending any money, for free.
Knowing what your Rights are:
According to BBB, you have the right to cancel any contract signed by you with credit repair company for any reason within three business days. By law every credit repair company must provide you with a copy of consumer rights.
Obvious signs of a scam credit repair company:
If the credit repair company doesn’t tell you what action you can take yourself and doesn’t make you aware from your rights, it must be a scam company. A company cannot be good if they stop you from contacting the business bureau directly. It’s a red flag if a company asks you money upfront. A company, who asks you to generate the employer ID instead of social security and tells you to piggyback on someone’s good credit are all signs of a scam credit repair company. You should always check a credit repair company on the website of Better Business Bureau at http:// wecome.bbb.org.
A credit counseling service is a better option if you are in a serious credit problem. You can get consumer credit counseling at a minimal fee or even free in some of the cases. These counseling services may help you with working out a payment plan; provide you with advice and guidance in staying you out of debt.
Too summarize it is safe to say that there is nothing as an instant credit repair done by a company for you. You need to know the instant credit repair scams because what they can do can all be done by your own self without spending money.
Cheers to wise spending!!
Zane
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