Bad credit? No credit? No problem. You hear
lenders saying it all the time but who’s really paying the price?
You. Sub prime lenders charge higher interest rates, usually three
percentage points above what prime borrowers with good credit pay
plus thousands of dollars in fees. Ultimately this vicious cycle
of accepting sub prime offers can result in catastrophic debt overload
which then leads to bad marks on a credit report or even bankruptcy.
It is estimated that
approximately 60 million Americans are negatively affected by derogatory
information contained in their credit reports- that's a staggering
figure. The cost of poor credit goes much deeper than just trying
to qualify for a small computer loan or secured credit card. Your
credit reports reflect your character! Lenders, landlords, employers
and even insurance
companies view your credit worthiness by how well you manage
and pay your debts.
Credit is a cost effective weapon
to fight poverty and it serves as a vehicle in the overall well-being
of the socioeconomic. Managing credit correctly can ensure financial
well-being. Continual late payments, inaccuracies and errors reflect
negatively on your character and limit your financial options. While
we can see the importance of good credit, maybe you have not given
much thought to how much your bad credit is costing you. You are
being punished for your lacking credit record in almost everything
you do. Your credit score determines your ability to borrow.
Automobile
Financing
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.
Home Mortgage
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.
The bottom line?
The cost of bad credit is high, no doubt -but the cost of repairing
your credit can also be very expensive and many times you achieve
little or no results. Credit repair is one of the most popular search
terms on the Internet and consumers continue to search for quick
fixes. If you can learn anything from this page, understand there
are NO quick fixes. Yes it is possible to repair your credit- millions
do but don't have such high expectations that you're sorely disappointed
in the end. This website offers you many
tools to repair your credit including many free of charge. Use the
credit library and learn what
the experts know and repair your
credit record yourself. Just remember good credit takes time
and once you've got it, don't lose it.
Bad credit cannot be
repaired overnight. Although some credit repair type websites want
you to believe its guaranteed or easy, its not either of those.
Credit repair is a dirty word but in reality it should be called
credit validation because that's exactly what you're doing when
you repair your credit reports. Both collection agencies and credit
bureaus are a series of validation cycles. The one with the better
records, wins and that can be either you, or them. One thing is
for sure. If you dont question negative items in your credit reports,
they'll stay. It's a worthwhile effort to get your credit up to
the best possible standards. It will pay off in interest rates and
lender opportunities.
Don't want to do the
work yourself? Lexington Law
is a very reputable plan whose company has been around for over
15 years.
What about collection accounts?
Collection accounts are already negative. From the onset, the term
collection account was never positive so its something you DONT
want. But, if you've been hit with a collection account then the
best path forward is to either validate or settle it. Or both. By
validating the debt you give
yourself an opportunity to set the record straight - make sure its
complete. If when a debt is sold to a bill collector, one, two even
three times, mistakes are bound to happen. By validating the debt
you are able to know without a shadow of a doubt what is owed to
the penny. If it cant be verified then you dont owe it. If it is,
then you have an opportunity to try and settle it with the debt
collector for less -- and for a possible better credit rating. Collectors
negotiate ratings everyday despite what you may have been told.
A bill collector wants to be paid so if getting the cash means deleting
the mark, they'll do it. If you are dealing with a collector who
has agreed to settle the debt AND remove the mark then they should
have no problem putting it in writing. If you dont get the agreement
in writing, chances are you wont get that promised rating. A paid
collection account is still a negative mark. However, a settled
account or total deletion IS an improvement.
What about judgments
A judgment is a public record. Since it's recorded its much more
complex than a collection account. Once a judgment has been entered
against you then there are only a few options. Outside of getting
the judgment vacated (if applicable), the best option is to work
with the judgment creditor to satisfy it. You cannot merely delete
a judgment in exchange for payment, but you can work with the judgment
creditor to come to an agreement of how you'll pay it. Once it's
paid (satisfied), the judgment creditor will file a satisfaction
with the court. That record is public and therefore will be reported
to the credit bureaus. On a sidenote, if you feel the judgment is
in error then a vacate order would wipe it away. You can see more
about vacating judgments here.
