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First, let us define bad credit. What is a bad credit? Bad credit is the total consequence by not paying your dues on your credit card or any loans on time or not paying them at all. This way, you will have a negative feedback which will guarantee a very low credit score as reflected on your credit history. In simple terms, pay your dues on time and all other credit cards and loans to avoid bad credit. If you are a delinquent payer on several occasions, the chances of entering into a new credit agreement will be likely disapproved or denied. If you are inquiring and applying for a credit card, or any bank loans, the lender will need to know your history of borrowing to minimize the risk they might encounter in lending you the money. A credit score will be requested for a background check on how you have been repaying those debts in the past. It is therefore significant to obtain a higher credit score which can result to great financial options. A credit reporting agency will be needed in order to verify your credit report and history. A credit reporting agency is in charge of collecting a person’s financial information and piling it up to make a credit report, present it to a certain individual and to other official parties which is includes financial establishments. Usually, a lender is allowed to obtain a copy of a credit report of the borrower who is applying for a loan. Therefore, lending institutions rely on whatever records and feedbacks a credit reporting agency provides. Credit reports good or bad stays in the credit history of the database of a credit reporting agency for seven years and creditors continue to report how you pay your debt until it is fully paid and the account is already closed. All records after seven years shall be deleted per the Fair Credit Reporting Act 605. Therefore, if you can wait this long to apply for a new loan, then, that will be the only solution for your problem. However, the Fair Credit Reporting Act requires that any inaccuracies, errors or incorrect entries on a corresponding report shall be corrected free of charge within 30-45 days of investigation as per client’s request. Removal of inaccurate information is allowed but accurate negative feedbacks and information shall stay on the credit report under governing laws. The Fair Credit Reporting Act provides that clients have the right to know what’s in their file, can ask about your credit score, can validate accuracy of the report once required by an employer, properly inform if your file was used to discredit you, legally argue and correct incomplete and unscrupulous information and totally eradicate and remove old and outdated information (which is in the case of bankruptcy 7-10 years old). Restoring the confidence and trust of lending and other financial institutions can take you sometime. It is always proper to pay your financial obligations and remember not to exceed your capacity in applying and securing loans.
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bad credit, Fair Credit Reporting Act, credit card,
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