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Credit
- Q & A
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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