Browse through our series of informational articles pertaining to Bad Credit. These articles will help you better understand bad credit and what you can do to fix your score.
The simple fact is that questionable credit listings are either deleted or corrected by the thousands each and every day through the efforts of individual consumers and organizations like Venture Credit Solutions. The proof is very compelling: The efforts of Venture Credit Solutions Firm have successfully assisted clients in obtaining deletion and correction of many hundreds of thousands of questionable credit listings being deleted It’s not necessarily easy or foolproof, and Venture Credit Solutions cannot guarantee success, but the right to improve your credit by challenging questionable items is yours.
No. Paid, but once-delinquent, debts still show up as severe negatives. It’s important to note that credit reports don’t just show your current credit situation, but they also show what your credit situation has been in the past. Therefore, past delinquency, collection activity or a charged off listing does a great deal of damage to the credit score even if it was paid off. This is one of the great ironies of the credit reporting system; paying your past-due debts does little to immediately increase your credit score and may actually make the score worse. It’s not necessarily easy or foolproof, and Venture Credit Solutions cannot guarantee success, but the right to improve your credit by challenging questionable items is yours.
Credit bureaus will often temporarily delete a negative listing if they haven’t heard from the creditor who furnished the data after approximately thirty days. This is commonly known as a “soft delete.” If the creditor then reports late, say after six weeks, and then verifies the negative listing, the credit bureau will often reinsert the negative listing on the credit report.
Usually however, the creditor simply fails to respond, and the questionable negative listing is permanently deleted. In this case, the listing is unverified and by law should not appear on your report. If the item is verified by the credit grantor, either before thirty days or after, the account may still be challenged at some future time if you believe that it is still inaccurate, untimely, misleading, biased, incomplete or unverifiable.
This really depends on you and the amount of time you’re willing to allocate toward repairing your credit. While disputing items on your credit reports should be easy, getting results can often be time consuming, difficult, complex and infuriating.
Many consumers are not able to dedicate the proper amount of time to study effective credit repair methods and apply principles learned.
Also, credit repair is often much more than simply sending dispute letters to the credit bureaus. Sometimes it becomes necessary to do more than simply ask the credit bureaus to perform an investigation. Dealing with creditors, collections agencies and the courts may be required to repair your credit reports. It is important to know how to deal with these individual entities.
Restoring your own credit is like repairing your own transmission or representing yourself in court; you can certainly do it (and you have the legal right), but you must decide if you are willing to take the time and endure the possible frustration of doing it yourself. In the same way, you have the legal right to represent yourself in court, but it isn’t always the best idea.
When you speak with certain creditors, their typically under-educated staff may tell you the law demands that negative listings appear on your credit report for seven to ten years.
The truth is that the credit grantor or the credit bureau can choose to delete the negative credit listing at any time, especially when you give them a reason to do so. The 7 year term is merely a time limit for reporting negative credit. Some items, like bankruptcies, may stay on a report longer than 7 years.
According to Bloomberg News columnist John F. Wasik, a credit score of more than 750 typically means you will get the lowest finance rates on purchases like mortgages and automobiles. Anything less than that could force you to have to pay higher interest rates or settle for less than the best terms.
myFICO® reports that the median credit score in the U.S. is 723 meaning half of all Americans have a credit score of less than 723. When factoring in the number of people with credit scores between 723 and 750, the majority of Americans have credit scores that are less than ideal.
And increased interest rates are not the only consequence of a lower credit score. The credit crunch has caused lenders to be much more cautious with their lending practices. In years past, people with sub 600 credit scores could be still get approved for credit, even if it was restricted to non-traditional mortgage loans and high interest credit cards. Today, lenders are no longer willing to extend credit to higher risk individuals. Many people with bad credit are now unable to get approved for loans because of their low credit scores.
Fortunately for those with lower credit scores, there is hope. A growing number of Americans are discovering steps they can take to legally fix their credit reports.
Thousands have fixed their credit scores
The credit reporting system is not perfect. Credit reporting errors, statistical assumptions, and obsolete data all contribute to a system that makes it look like responsible people who can be counted on to pay their bills are not worthy of credit.
If you are in a position where your credit score is making you look like a higher credit risk than you really are, you may be able to improve your credit score by fixing your credit.
The Fair Credit Reporting Act gives you the right to dispute any items in your credit reports you feel may be inaccurate, untimely, misleading, biased, incomplete or unverifiable (“questionable”). In essence, you have the right to dispute the questionable negative items in your credit reports you feel are giving lenders an unfair impression of your credit worthiness.
You can work to fix your credit on your own or with the assistance of a professional credit repair firm like Venture Credit Solutions. Since 2017, VCS has been helping clients dispute the questionable negative items in their credit reports and has produced results time and time again.
As you consider retaining VCS you would do well to look at the price you are already paying for bad credit. Below are just a few examples of the cost of bad credit.
Most if not all prime credit cards are entirely out of reach to consumers with bad credit. And the few credit cards that are available to them (known as “sub-prime” cards) typically require high setup fees or recurring monthly fees, offer very low credit lines, often require cash deposits, and in most cases do not even report your positive credit activity to the credit bureaus.
If you are making payments on a car, you are probably paying between $1,500 and $5,000 more just for having bad credit. This added interest shows up every month in a higher payment.
Bad credit in auto financing can really hurt, but it is nothing compared to the cost of bad credit when a home is involved. A typical home can cost between $50,000 and $130,000 more in interest if you are buying the home with bad credit.
A divorce wreaks havoc on a person’s emotions and personal well-being, but it is the financial hardships of a divorce that sometimes take even longer to overcome. Even the most amicable of divorces can lead to payments being missed and dings ending up on both people’s credit reports. But when the fallout from a divorce is at its worst, judgments, foreclosures, and bankruptcies can all come into play, and can all destroy the credit ratings of both people involved.
Divorce is one of the many scenarios that illustrate the basic unfairness of the credit reporting system. When a couple separates, the debts they have incurred as a partnership are divvied up among each party so that only one person is responsible for making the house payment, car payment, credit card payments, etc. The problem is that, even when a judge assigns the debts to each person, the creditors involved do not respect that fact the only one person is accountable for each debt.
When trying to collect a debt, creditors will try to hold both parties responsible. So, for example, even if a judge has declared that one party is wholly responsible for paying off a credit card balance, when payments start coming in late, the credit card company may start adding negative listings to both people’s credit reports. It is not uncommon for someone who has gone through a divorce to suddenly start seeing negative marks appear on their credit reports for accounts that they are not responsible for and were not even aware were in poor standing.
When this starts happening, the credit scores of both parties can take a significant dive, but that is not the worst of it. In some cases, one party will completely give up on paying their debts and go so far as to declare bankruptcy which leads creditors to begin hounding the other party to repay all debts. As a result, the person who has worked hard to manage the debts they were supposed to be responsible for following the divorce, has seen their credit score crash through no fault of their own and may face losing their home or maybe having to file for bankruptcy as well because the debts of two people are simply too much to handle.
There is not one type of questionable listing that cannot be removed from a credit report if it is inaccurate, untimely, misleading, biased, incomplete or. While negative items such as bankruptcies or unpaid debts are more difficult to remove from the credit report, this has more to do with the operational systems of the credit bureaus than with the severity of the bad credit item. For example, judgments and tax liens are severely negative listings yet, in VCS’s experience, clients have had more success getting them removed than other types of listings. Whether a questionable item can be corrected or removed has little to do with its severity alone.
A bankruptcy may help you take control of your debts and get a second chance on better managing your finances, but it most definitely does not clean up your credit reports.
Many bankruptcy attorneys apparently do not adequately understand or explain the effects of bankruptcy to their clients. Stated simply, bankruptcy is to the credit rating what the nuclear bomb is to war. It may end the war, but it leaves a mess. When you file for bankruptcy, every credit account that you decide to include in bankruptcy will become an “included in bankruptcy” account (a seriously negative item).
Additionally, a bankruptcy filing and bankruptcy discharge listing will appear in the court records section of your credit report. Because so many negative items are attached to the bankruptcy, it becomes very difficult to remove all trace of the bad credit.
Any amount of bad credit is devastating to your chances of being approved by a credit grantor. Most credit grantors never actually look at your credit report. A computer pulls your credit report, rates your credit standing, income, indebtedness, and stability, then spits out an acceptance or denial. Even one or two slow pays will usually trigger a credit card or personal loan denial. The slightest amount of negative credit could cause the interest on an auto loan to skyrocket. You will probably find that even a little bad credit, regardless of how much good credit you have, is an unacceptable barrier to credit approval.
Below is a summary of the FCRA. The full Act can be obtained directly from the Federal Trade Commission’s web site
Fair Credit Reporting Act (Summary) Public Law 91-508
The Fair Credit Reporting Act (FCRA) allows a consumer to challenge the information on his credit report on the basis of “completeness and accuracy.” If, after a reinvestigation by the credit bureau, the disputed information “is found to be inaccurate or can no longer be verified, the [credit bureau] shall promptly delete such information.”
The credit bureaus are required to complete the investigation within a “reasonable period of time.” This period has been set at thirty days.
The credit bureaus can ignore the consumer dispute if they have reason to believe that the dispute is “frivolous or irrelevant.” The FTC commentary on the FCRA cites, as an example of a frivolous dispute, a dispute wherein the consumer challenges all negative items on his credit report without providing any allegations regarding specific items in the credit file. However, “A [credit bureau] must assume a consumer’s dispute is bona fide, unless there is clear and convincing evidence to the contrary.”
When a consumer challenges a credit listing on the basis of extenuating circumstances, such as health problems, divorce, job loss, etc., the credit bureaus may decide to ignore that dispute as frivolous.
When a consumer submits a dispute which is neither frivolous nor irrelevant by credit bureau standards, the credit bureau must “at a minimum… check with the original sources or other reliable sources of the disputed information and inform them of the nature of the consumer’s dispute.” In some cases of consumer dispute, “Reinvestigation and verification may require more than asking the original source of the disputed information the same question and receiving the same answer.”
From our experience, most people quickly discover that the process can be troublesome and time consuming.
In theory and law, the process is deceptively simple, thus leading many people to believe that they can easily handle this themselves “for the price of a few postage stamps.” From our experience, most people discover that the credit bureaus often make the process troublesome and time consuming. In these cases, many seek the assistance of a credit repair firm.