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Are You One Of Many Americans Who Has A Problem With Credit? |
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Many Americans have a
problem with credit. Many more don't know they do. If you need to ascertain whether you have a problem with credit, perhaps the first place to look is your monthly budget. If you don't have a budget (which itself could be a trouble sign), track your spending over the course of a month or two and see where your money goes. Do you pay minimum payments against your credit card balances? Are any of your loans or credit card payments late, especially on a regular basis? Are you transferring balances between credit cards in order to keep the payments up to date? Any of
these could be signs that you do have a problem with credit. Once you have determined that you have a problem with credit, the next step is what route to take to return to financial stability. A problem with credit can hamper efforts to get loans, insurance, and sometimes even jobs, as prospective employers run credit checks to determine the stability of job applicants. So, maintaining a positive credit profile can be helpful in more ways than one. The first thing to do in your efforts to overcome any problem with credit is to get your spending under control. For those of us with a budget, a close look at how well we adhere to the budget, and the overall condition of the budget are key. If you don't have a budget but you have a problem with credit, then start budgeting now. A budget is one of the best ways to track and control your monthly spending, and it gives you a map to plan your route back to financial health. Look hard at your budget to find the ratios your spending falls into. How much of your budget goes to credit payments and how much to food, rent/mortgage, and discretionary spending like entertainment. Shaping the budget into reasonable proportions is one way to build financial stability. If you have been late with payments, or had trouble keeping loans up to date, or other problems with credit, then it may also help for you to get hold of a credit report. There are three major credit-reporting agencies in the U.S.: Experian, TransUnion, and Equifax. All three offer at least one free credit report per year to any American consumer who properly requests one. The requests can now be made in one of several ways, some of them online, for your convenience. The reports are not exactly the same, so it is beneficial to get a report from each of the big three. In general, your credit report will contain information about you that includes, but is not limited to, your current and previous place of work, current and previous addresses, name, social security number, age/date of birth, and current credit profile. It will also contain requests for information made by potential creditors, insurers and employers. The credit profile will include any creditors you currently owe and the condition of the accounts as reported by them. This alone can cause a problem with credit. Incorrect information on these reports is your responsibility to report (in writing) and the reporting agency must then either prove their information is correct or remove it within 60 days. Derogatory but correct information in your report cannot be removed until a certain period has elapsed. The period varies according to the type of information. Simple late payments can be removed very quickly; bankruptcies or foreclosure can take up to 7-10 years. Should you have any derogatory information in your report, you should work with the creditor to pay of the debt or correct the information and get the creditor to report the resolution to the reporting agency. This will raise the overall credit profile and your credit score. The fact that derogatory information exists in your credit report is not in itself a problem with credit: it doesn't necessarily mean you will be denied any and all loans and credit, jobs and insurance. You can and should work to fill your credit report with positives to bury the negatives. This will show viewers of your credit report that you have responsibility and are working to gain their trust. Most people will realize that problems with credit affect most consumers at some time and will appreciate efforts to over come them and return to financial stability. One thing many Americans are availing themselves of is a type of service offered by each of the big three credit reporting agencies. It is sometimes called Credit Watch, and for a nominal monthly or annual fee, the agency keeps you abreast of changes in your credit file. Its one way to head off any problem with credit before it happens. It can key you to the types of things that go into your file, and let you know when and how you can positively affect your own credit file. |
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