|
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. |
