Legal, effective credit report repair

Friday, June 02, 2006

Repair Your Credit--Click Here For Our Recommended Bad Credit Repair Service

A Brief Credit Repair History

(The History of the Credit Repair Business)

Whether you call it credit repair history of the history of the credit repair business, here are some facts. Risk-based pricing is the real reason that there is a credit repair business. Risk-based pricing is the practice of charging different interest rates to different people. Lenders decide who gets the best interest rates based almost entirely on a person’s credit score. Credit repair allows borrowers to qualify for the lower interest rate. To achieve credit repair, history must be rewritten, to a certain extent. Inaccurate, misleading and unverifiable information must be removed in order to improve a person’s credit score.

People involved in the credit repair business know how an individual’s credit score is computed. One might think that it is based entirely on a person’s payment history, but other factors are used to determine a person’s credit score. Some borrowers consider only the FICO credit scores; some consider the credit rating and others actually look at the information listed on a credit report by one or more of the credit bureaus. The history of the credit repair business or credit repair history is relatively short, but the history of credit scoring and rating goes back nearly as far as bank loans. Lenders needed some sort of system to evaluate a person’s “creditworthiness”.

Several laws govern what information can be used to determine a person’s creditworthiness. Several laws are designed to help consumers report unfair or inaccurate information. A credit repair business that is familiar with the laws regarding credit issues will be able to provide the most help to consumers who hope to achieve credit repair. History does not always repeat itself, just because an individual had credit problems in the past, does not mean that they will continue to have credit problems in the future. Critics of risk-based pricing feel that charging a person a higher interest rate, because they have had problems repaying loans in the past will only make it harder for that same person to repay loans in the future. When the credit repair business works, it works to keep this from happening.

Even a person whose credit score is “not that bad” can benefit from credit repair. If a company in the credit repair business has an effective credit repair history, they may be able to save a consumer much more than the cost of the services. For instance, FICO provides the following figures. For a $216,000 mortgage, a FICO score of 760 or above would qualify for a 6.29% interest rate, equaling a monthly payment of $1335. The rates go up as the score goes lower. A score of 700-759=$1367, 680-699=$1392, 660-679=$1423, 640-659=$1486, 620-639=$1567 and a credit score below 620 will require “creative financing”. In 2003, less than 30% off all Americans had a credit score between 750 and 799, and 50% were below 700. So, an effective credit repair business could have saved Americans between $768 and $5568, just in interest on their mortgages in the last two years.

If we look at credit repair history on an individual basis, some credit repair specialists are more effective than others. Some recommend solutions which can create more problems than they solve. The credit repair business can be a dream come true to persons with “really bad credit” and a money saving tool to those with “not so bad” credit, if the person chooses the right law firm.


Blogger Layla said...

It's true, the companies offering bad credit secured loans are now numerous and are able to offer the client varying amounts of loans for any use and over lots of different terms. Bad credit secured loans are a good chance for people who have bad credit history to get a loan and try and rebuild their credit. bad credit mortgage helps in improving the credit score (if timely repayments of loan are made).

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