FREQUENTLY ASKED QUESTIONS ABOUT CREDIT REPAIR (PART 1)

What you may not know about bad credit repair

Bad credit is defined as a FICO score of 620 or lower. FICO (Fair, Isaac and Co.) scores range from 300 to 900. A score that is above 680 means that your credit is in good  standing. Credit scores in the 620-680 range are medium and a score lower than 620 puts you in the poor or bad credit range.

Are bad credit problems common?
More than 30 million Americans are affected by bad credit. The average American household has $9,300 of credit card debt. Almost 1 in every 100 families winds up filing for bankruptcy.

For how long does bad credit information stay in your credit report?
If you filed up for bankruptcy, it may be reported for ten years; criminal convictions don’t have a time limit, and generally any other problems will stay for seven years.

Does being unemployed affects your credit score?
“No. But you might get declined for a credit card, unsecured loan, line of credit or bad credit home financing if you are collecting unemployment because unemployment checks are considered an unstable income.

Does having bad credit affect a spouse?
Only if you co-sign on loans, open joint accounts, or jointly file for bankruptcy.

If I don’t pay utility bills, does it result in a poor credit rating?
This can happen if your often 90 day past due behind and is sent to collection. This will create a black mark on your credit report.

Will my credit score be improved if I cancel inactive credit cards?
Actually this might hurt you. Your available-credit-to-debt ratio may be raised if you have cards with zero balances and available credit on them. Your credit score is affected by how much available credit you have when compared to your total debt.

Are “credit bureaus” government companies?
No. Credit reporting companies are just that - companies.  They work under the US laws and generate their income by selling credit reports to creditors.

Is it legal to have your credit profile cleared?
Absolutely. Eliminating mistakes on your bad credit report is neither illegal nor immoral. In fact, The Fair Credit Reporting Act protects your right to do so.

What is the Fair Credit Reporting Act?
The Fair Credit Reporting Act or FCRA is a set of US government rules that expects that the information supplied by Credit Reporting Agencies or CRAs about your credit history is complete and accurate and available to you on request.