Being Grateful for Credit Repair

Current credit laws in effect have helped to offset some of the more damaging tactics that credit card companies used to employ, which means consumers have something to be grateful for from the start. Under the most recent consumer credit laws, credit card companies have had to stop unfair practices such as:

• Increasing interest rates without notice – you are now entitled to at least 45 days’ notice
• Charging multiple over-the-limit fees in one month – companies can only charge one over-the-limit fee, and only if you opted into allowing charges over the limit.
• Double-cycle billing – no more interest charges from the prior month’s purchases.
• Forcing you to pay off low-interest balances first – companies are required to put any excess payment towards higher interest balances first, which helps to save you money.

But even with all of these changes in consumer credit law, the real key to being grateful for credit repair is to take action and do something to improve your situation now, rather than ignoring your credit worries and waiting for the problem to go away on its own. (It almost never does.)

Correcting incorrect information on your credit report could save you hundreds, if not thousands of dollars a year in excess fees and interest, but you have to make credit repair a priority if you want to be able to reap the benefits.

What Mortgage Rate Could You Qualify for After Your Credit Repair? 

The money you save grows exponentially as your credit score increases, which creates a snowball effect – the better your credit rating, the more money you have to enjoy your newfound financial freedom. And because current lenders may regularly reassess your credit limits and interest rates based on your credit score, you have the potential to save even more as time goes on.

Rather than a vicious cycle of poor credit and high interest rates leading to maxed-out limits and higher fees (which in turn lead to lower credit scores), you instead have a virtuous cycle of credit gains that bring you closer to your financial goals.

The Positive Benefits of Credit Repair

If you take the challenge of credit repair as an opportunity to improve not only your credit, but your finances as a whole, multiple benefits emerge:

• Lower interest rates – not only for credit cards, but for mortgages and car loans, as well as personal loans. This means you are able to get the things you want and deserve in life without having to pay outrageous fees.
• Better insurance premiums– on everything from renters insurance and mortgage insurance to car and health insurance. These companies reason that if you have a good credit score, insuring you is less risky, and therefore you pay less.
• More job opportunities – many employers now check credit scores before extending a job offer. People with higher credit scores stand out from others with similar skills and resumes, so if you’re in the job hunt, improving your credit can expand your options and improve your chances of getting hired.
• A sense of empowerment and less stress – for many, the biggest benefit of credit repair is being able to get up in the morning without dreading the calls from bill collectors or collection notices in the mail.

In many ways, credit repair not only reduces stress, but improves quality of life as a whole.

Getting the Help You Need to Repair Your Credit

Some people tackle the task of credit repair on their own, but for many the idea of taking on the credit bureaus directly is daunting. People may be uncertain as to what items to dispute or how to find out if the item listed on their account is from the current creditor or a collection agency that is trying to collect on a bill that is well past the statute of limitations.

This is where a professional can be helpful. By completing the paperwork for you and guiding you through the process, you get the support you need begin repairing your credit without having to become a credit repair expert on your own.

If you’re ready to take the first step, our website has all the information you need to get started with credit repair, whether you decide to do it yourself or hire an expert. As we express our gratitude throughout the season and the holiday, make sure you add credit repair to the list of things you’re grateful for in your life.

Effective July 1, 2009, the government is instituting a new repayment plan called Income Based Repayment, or IBR.  This new payment plan adjusts your payments to reflect your income as well as your dependents. After 25 years, if you still have a balance on the loans, that balance is forgiven. For individuals who have low income or several dependants, this provides a viable way to keep your credit rating clear, while still maintaining affordable payments throughout your loan term.

Student loan debt is often a factor when determining whether or not you qualify for credit. Unless you are currently in deferment or forbearance, the total amount of your student loan debt is part of your debt-to-income ratio. However, most lenders view student loan debt as “good” debt, and are less likely to penalize you in that regard. Showing a consistent payment history out of forbearance and/or deferment can help to build credit as well – if your monthly payments are lower under IBR, this can also be a factor when creditors are deciding whether or not you have the ability to repay.

Regardless of whether or not you have your student loan payments adjusted under IBR or some other program, it’s important not to let payments on student loans lapse. While having student loan debt may not prevent you from qualifying for the credit that you deserve, missed payments on student loans certainly can. And because student loans fall under a special category of debt, in most cases you cannot have student loans discharged with bankruptcy, or any other means. If student loans are a potential tipping point for you with regards to your ability to repay financial obligations, IBR’s lower payments may be useful to you as well.

For individuals who have a higher income level, or who expect to have a higher income level in the future, IBR may not be the best option. Because the repayment plan is so lengthy, it is best suited for individuals with lower income jobs over the long term. If you have a temporary financial setback, forbearance and deferment are still your best options. Whichever repayment or deferment option you choose, you should check your credit report to ensure that it accurately reflects your current payment status. Often, missed payments can be removed from the credit report if you have your deferment or forbearance take effect retroactively – this will give you a clean slate to start with when you begin your repayment again, and will give your credit scores a natural boost as well.

Pay Attention to the Contract

It doesn’t matter who the divorce decree stipulates as the responsible party for the debt. What matters is the name on the dotted line. If you signed a contract, you are responsible for the debt, even if the divorce decree says your ex is supposed to pay up. If he or she fails to meet the obligation, it’s your credit that will suffer, not your ex’s. So you may want to be particularly careful of those debts you have your ex to take on, if you have any reason to suspect that they won’t be paid in a timely fashion.

Get Credit in Your Own Name

Years of marriage can leave you sorely lacking in the credit history department if everything is in your spouse’s name. Even if you help pay for the house, the car, that business loan or any other debts of the household, if your name isn’t listed, that pristine payment record will not show up on your credit history. Even if you have no plans of divorce, it’s still a smart move to have both spouses jointly responsible for major household purchases such as a house or a car – that positive payment history can help you get credit on your own if someday you and your spouse do call it quits.

Keep a Close Eye on Your Credit Report

Your ex likely had access to all of your personal information throughout the course of the marriage. Sadly, most cases of identity theft are perpetrated by someone that the victim knows. If you’re recently divorced, make certain that all joint accounts are closed, and take extra measures to ensure that no one else is opening accounts in your name with your personal information.

Hire a Credit Repair Service

If a divorce has put a blemish on your credit, don’t despair. Quality credit repair companies are often able to clear up inaccuracies caused by divorce, and any debt that is not your legal responsibility can always be disputed and removed from your credit report. So if you are recently divorced, or in the middle of a divorce, don’t let credit problems catch you by surprise. Be proactive and take measures to preserve the good credit you’ve built over the years of your marriage.