Do-It-Yourself Credit Evaluation and Check-Up
One of the largest most costly errors a consumer makes is to apply for a car loan or mortgage loan without full knowledge of the actual quality of their credit. It could be worse, however it could be better than you anticipated.
If it is
worse than you expected, and the result is that you are granted a high interest rate for a loan, remember that getting the approval
is a step forward in rebuilding your credit standing. If your loan approval comes with higher payments because of the interest rate, simply purchase a lesser car than you may have originally planned to do, and be prepared and able to make more than the monthly payment on time every month. On-time payments will ultimately help to increase your credit score and the extra dollars added on to your monthly payment will decrease the total amount you will pay in interest for the car. All lenders we work with use "simple interest" lending. You are only paying interest on the principal balance remaining on your loan each month. The lower the principal, the less interest charged.
On the other hand, if your credit report reflects much better reporting than you are aware of, you could be accepting an interest rate higher than you deserve without realizing your actual credit standing.
Naturally, the worse your credit, the higher the interest rate charged. Considered "high risk", a lender may still qualify you for the loan, but the loan could send you deeper into debt. Don't be afraid to ask a qualifying lender if they will consider a lesser interest rate! You have a 50/50 shot of getting a "yes" answer to a point or two less than originally quoted. Each interest point lower could save you hundreds of dollars over the course of the loan.
The very first step in repairing your credit is to know exactly what credit reporting agencies are currently reporting about you. Have your credit pulled from all three major credit reporting agencies ( see below ). Consumers have improved their credit standing significantly by removing inaccurate, misleading, unverifiable and erroneous information. Dispute any discrepancies found in a formal letter to the specific credit reporting agency and make sure
you keep records of your correspondence with the creditors involved.
According to the Fair Credit Reporting Act:
 You are entitled to a free copy of your credit report if you've been denied credit, insurance or employment within the last 60 days. If your application for credit, insurance, or employment is denied because of information supplied by a credit bureau, the company you applied to must provide you with that credit bureau's name, address, and telephone number.
You can dispute mistakes or outdated items for free. Ask the credit reporting agency for a dispute form or compose your own letter to submit your dispute in writing, along with a copy of any supporting documentation. Never send them original documents.
Clearly identify each item listed on your credit report being disputed, explain descriptively why you dispute the information, and request a reinvestigation. If a new investigation reveals an error, you may ask that a corrected version of the report be sent to anyone who received your report within the past six months.
When a new investigation is complete, the credit bureau must supply you with written results and give you a free copy of your credit report if the dispute results in a change on your report. If an item reporting to credit has been changed or removed to your satisfaction, the credit bureau cannot put the disputed information back on your report unless the information provided by the creditor in response to your dispute verifies its accuracy. The written notice to you from the credit agency must include the name, address, and phone number for the creditor who provided of the information.
Timeline for Credit Agencies Reporting Negative Information
Accurate negative information can be reported for seven years, but there are exceptions to this timeline:
Reported for 10 years - Bankruptcy information.
No time limitation - Information reported because of an application for a job with a salary of more than $75,000.
No time limitation - Information reported because of an application for more than $150,000 worth of credit or life insurance.
Reported for seven (7) years or until the statute of limitations runs out, whichever is longer - Information concerning a lawsuit or a judgment against.
Reported for seven years after certain guarantor actions - Default information concerning U.S. Government insured or guaranteed student loans.
Getting outside help
First, on your own put together a budget - credit repayment schedule. Make every attempt to live by the new payment structure you set for yourself. However, if you can't resolve your credit problems alone or you need additional help, you may want to contact a credit counseling service. There are non-profit organizations in nearly every city in the US that are available to counsel consumers in debt. Credit counselors are trained to work with your income and to help you create a budget for arranging repayment plans that are acceptable to both you and your creditors. These counseling services are offered at little or no cost to consumers. You can find the office nearest you by checking the white pages of your telephone directory. Or, check with your local bank, credit union or consumer protection office to see if it has a list of reputable, low-cost financial counseling services to contact.
To get a copy of all three credit bureaus in one condensed report:
 
Or contact each credit reporting agency individually:
The Federal Trade Commission ( FTC) works for the consumer to prevent fraudulent, deceptive and unfair business practices and to provide information to the consumer to help spot, stop and avoid these marketplace practices.
Call: 1-877-FTC-HELP (382-4357) to report Internet, telemarketing, identity theft and other fraud-related complaints
Go to: www.ftc.gov to file a complaint or to obtain free information on many consumer issues.
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