Credit Secrets & Tips

Some of credit repair companies are legitimate business that work within the law to help you resolve credit problems and rebuild your credit.

However, they charge excessive fees range from $100 to $2500 to “clean up” your credit record. They claim that they remove your bad credit, even bankruptcies from your credit report.

Some of these are little more than floating con artists. They move into a locale, charge unsuspecting consumers a hefty up-front fee for their services, and then skip out of town, leaving their victims poorer and without the credit record improvements they are promised.

To protect yourself, the following are 7 sure signs of a credit repair company that will rip you off:

1. The contract doesn’t contain the following information:

• The amount you are being charged
• Details about the services being performed on your behalf
• The date by which the services will be performed (or the time period required to perform the services)
• The name and business address of the organization
• A statement letting you know you can cancel the contract within 3 days

2. Recommend that you do not contact a credit bureau directly

3. The company promises to create, or asks you to create, a “new” identity with a new social security number or federal employer identification number (EIN)

4. The companies make big promise about what it can do for you, such as “We can wipe out bankruptcies and other negative information, no matter how bad credit history.”

5. You aren’t given a copy of the “Consumer Credit File Rights Under State and Federal Law”
letting you know your rights to obtain a credit report and dispute inaccurate credit report information and what you can do yourself for free.

6. Ask for a large up front cost without explanation anything, and without any written documentation.

7. You aren’t given a copy of the contract to view before you’re asked to sign it.

On your first attempt to get credit, you may face a common frustration: sometimes it seems you have to already have credit to get credit.

When you apply your credit, some creditors will look only at your salary and job and the other financial information you put on your application.

But most also want to know about your track record in handling credit–how reliably you’ve repaid past debts.

If you have no credit history, it may take time to establish your first credit account.  Here are 5 ways you can begin to build up a good credit history:

(1).  Open a checking account or a savings account, or both.
 
These do not begin your credit file, but may be checked as evidence that you have money and know how to manage it. 

Cancelled checks can be used to show you pay utility bills or rent regularly, a sign of reliability.

(2). You might borrow a small amount from your credit union or the bank where you have checking and savings accounts.

Some banks may approve your credit application even if you do not
meet the standards of larger creditors.
(3).  Apply for a department store credit card. Repaying credit
card bills on time is a plus in credit histories.

(4).  Ask whether you may deposit funds with a bank to serve as
collateral for a secure credit card. 

The banks will issue a credit card with a credit limit usually no greater than the
amount on deposit.

(5).  If you don’t qualify according to your current credit rating, you may ask someone co-signs a loan to established credit history for you.

Because a co-signer promises to pay if you don’t, this can substantially improve your chances of getting credit. Once you have repaid the debt, try again to get credit on your own.

Most important, before you apply for credit, ask whether the creditor reports your credit history information to credit bureaus.

Most creditors do, but some do not. If possible, you should try to get credit that will be reported. This builds your credit history.

If you’re turned down, find out why and try to clear up any misunderstandings.  There maybe reasons other than lack of credit history. 

Your earning may not meet the creditor’s minimum requirement or you may not have worked at your current job long enough. Time may resolve such problems.

Most of you use credit or debit cards to pay for online purchases.  I encourages you to take steps to make sure your transactions are secure and your personal information is
protected.

Although you can’t control fraud or deception on the Internet, you can take action to recognize it, avoid it and report it. 

Here’s a few tips:

1. Use a secure browser software that encrypts or scrambles the purchase information you send over the Internet to help guard the security of your information as it is transmitted to a web site. 

Be sure your browser has the most up-to-date encryption capabilities by using the latest version available from the manufacturer.  You also can download some browsers for free
over the Internet.

When submitting your purchase information, look for the lock icon on the browser’s status bar, and the phrase “https” in the URL address for a web site, to be sure your information is secure during transmission.

2.  Check the site’s privacy policy before you provide any personal financial information to a web site. 

In particular, determine how the information will be used or shared with others. Also check the site’s statements about the security provided for your information. 

The statements may includes “Privacy Statement”, “Acceptable Term of Use”(AUP), “Anti-Spam Policy”, and “Disclaimer”.

Some web sites.  Disclosures are easier to find than others. Look at the bottom of the home page, on order forms or in the About or FAQs section of a site.  If you’re not comfortable with the policy, consider doing business elsewhere.

3. Read and understand the refund and shipping policies of a web site you visit, before you make your purchase.  Look closely at disclosures about the Webster’s refund and shipping policies.

Again, search through the web site for these disclosures.

4. Keep your personal information private. Don’t disclose your personal information your address, telephone number, Social Security number, bank account number or e-mail address unless you know who’s collecting the information, why they’re collecting it and how they’ll use it.

5. Give payment information only to businesses you know and trust, and only when and where it is appropriate like an order form. 

Never give your password to anyone online, even your Internet service provider.  Do not download files sent to you by strangers or click on hyperlinks from people you don’t know.
Opening a file could expose your system to a computer virus or a program that could hijack your computer.

6.  Keep records of your online transactions and check your e-mail for contacts by merchants with whom you’re doing business.  Merchants may send you important information about your purchases.

7. Review your monthly credit card and bank statements for any errors or unauthorized purchases promptly and thoroughly.

Notify your credit or debit card issuer immediately if your credit or debit card or checkbook is lost or stolen, or if you suspect someone is using your accounts without your permission.

Bad credit can happen to good people. Don’t despair. There are many ways you can get your credit back in shape.

But you have to start working on it today — and keep working hard to show potential creditors that you’re serious about getting your credit back in order.

As you do so, your credit score will improve, resulting in better credit offers and a substantial savings in money.

Here are 6 simple easy and surefire ways to restore your credit: 

1.  Open new accounts and pay them off 

Being able to repay a variety of new accounts is a key step in rebuilding your credit. 
  
That means that devising a strategy to open and pay off as many different kinds of accounts as you can is better than adding more debt to an existing credit card.
 
2. Start small
     
Rebuilding your credit can be similar to starting over from scratch, and starting small may be the easiest option. 
  
Credit cards from department stores or your local credit union can be useful.
 
3. Consider asking for help
     
If you can’t qualify on your own, ask a friend or family member to cosign for a small loan or credit card. 
  
If you can stay current on a major credit card account or small auto loan, this will speed up the process of re-establishing good credit on your own.
 
4. Consider a secured credit card
     
They are guaranteed by a deposit that you make with the credit grantor. The cards offer the purchasing power of a major credit card. 
  
Just make sure the grantor reports payment histories to one of the three major credit bureaus so you’re building your positive payment history.
 
5. Use your new accounts in moderation
     
Make payments that are more than the minimum. You can keep a small balance so that your positive payment history will continue to show up on your credit report.
 
6.Keep your balances low
    
Avoid carrying a balance that is more than 30% of your credit limit (creditors may view it as excessive debt that you may not be able to stay current with.
 
Be patient. The payoff is worth it.  It takes some time for your new credit history to gain momentum.

You’re demonstrating that you are not depending on certain credit cards and loans for your financial survival.  With patience and timely repayments, you’ll likely be able to
build a new credit history that creditors will look upon favorably when making decisions about your ability to handle even more credit.

Upon receipt of your dispute letter, the credit bureau first reviews and considers the relevant information you have submitted regarding to the nature of your dispute.

If the review doesn’t resolve your dispute and further investigation is required, notification of your dispute is provided to the creditor, including the relevant information you submitted.  The creditor reviews the information provided, conducts an investigation and reports the result back to the credit bureau.

The credit bureau then makes deletions, or changes to your credit file based on the creditor’s investigation result.  The name, address, and the telephone number of the creditor is shown under the result section on the cover letter that comes with the copy of your revised credit file.

If you still disagree with an item after it has been verified, you may send second or third dispute letter with additional documents to support your dispute.

You may also send a 100 words brief statement, explaining the nature of your dispute.  Your statement will become part of your credit file and will be disclosed each time that your credit file is reviewed.

You have the right to request that the credit bureau sends your revised credit file to any company that received your credit file in the past 6 months for any purpose or in the past 2 years for employment purpose.

Remember, the credit bureau is not necessary to do so unless you ask!