| 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 (888) 397-3742. experian.com;
Equifax at (800) 685-1111, equifax.com
and Trans Union at (312) 408-1077,
transunion.com. |
|
| 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.
Some states now have mandatory timelines
to respond to your inquiry or remove
the blemish. For a copy of your
report, contact one of the three
major credit reporting agencies:
Experian at (888) 397-3742, experian.com;
Equifax at (800) 685-1111, equifax.com;
and Trans Union at (312) 408-1077,
transunion.com
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 (888) 397-3742, experian.com;
Equifax at (800) 685-1111, equifax.com;
and Trans Union at (312) 408-1077,
transunion.com.
|
|
| 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:
Experian at (888) 397-3742, experian.com;
Equifax at (800) 685-1111, equifax.com;
and Trans Union at (312) 408-1077,
transunion.com. |
|
| 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: Experian
at (888) 397-3742, experian.com; Equifax
at (800) 685-1111, equifax.com; and
Trans Union at (312) 408-1077, transunion.com.
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, 801
Roeder Road, Suite 900, Silver Springs,
MD 20910; call (800) 388-2227; nfcc.org.
|
|
| 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 (888) 397-3742,
experian.com; Equifax at (800) 685-1111,
equifax.com and Trans Union at (312)
408-1077, transunion.com.
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.
Now, many states have specific timeframes
if you challenge a credit blemish.
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 (888) 397-3742,
experian.com; Equifax at (800) 685-1111,
equifax.com and Trans Union at (312)
408-1077, transunion.com. 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:
* "Clean Up Your Credit File,"
Nolo Press, Berkeley, Calif.; 2001.
|
|
| 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 C4F0er'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.
|
|
