If you have bad credit, it may be getting harder and harder to get loans you need. Even though this is usually a sign that you should try to avoid borrowing more money, there are times when you just have to get credit. This could mean paying rent, especially if you have young children, or paying for school fees or medical care. A bad credit score can also make it hard to get insurance, rent an apartment, or even find a job.
Fix your credit score.
If you have problems like these, you might want to think about trying to fix your credit score. Credit repair is a broad term for the controversial practise of improving or repairing a person's financial reputation (creditworthiness) among creditors. In the long run, the only way to fix a bad credit score caused by bad credit habits is to change those habits.
One way to improve credit habits is to work out a plan with the people you owe money to so you can pay them back. Instead of writing off the debt, creditors might agree to a slow payment plan. Sometimes, creditors may be willing to take less than full payment (pennies on the dollar). The key is to get in touch with the creditor and do something to pay off the debt.
At the same time, bringing up an old debt that can no longer be paid can hurt a person's credit rating even more. Before contacting a creditor about an old debt, it's best to know about the debt's collectability, the statute of limitations, and the legal and illegal ways to get money back.
FACT
Congress passed the Fair and Accurate Credit Transactions Act (FACT Act) in December 2003. It gave people the right to a free credit report once a year if they asked for one and had a number of other parts that were meant to make credit reports more accurate.
On June 4, the Federal Trade Commission finished its rule for implementing the new consumer right to a free credit report. The rule will be put into place over a nine-month period, starting on the west coast in December 2004 and ending on the east coast in September 2005.
From 1994 to 2004, the state PIRGs and other consumer groups put out a lot of reports showing that mistakes on consumer credit reports are caused by the way credit reporting agencies do their jobs.
One in four people might not be able to buy a home, rent an apartment, get credit, open a bank account, or even get a job if their credit report is wrong.
